Sunday, August 1

Gears in motion for private higher education players

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The industry is getting competitive. With more than 414 private colleges, 37 private universities, 20 university-colleges and seven foreign branch campuses in the country, some private institutions have fewer than 500 students. This leaves little room for sustainability. BizHive Weekly talks to several key private university players in Sarawak on the private higher education sector outlook and their efforts to remain competitive within the industry.

Rebranding the private higher education sector

KUCHING: Sustainability remains the buzzword within the private higher education sector industry today with many players in the scene in­creasing competition for more market share.

There is no doubt that the education sector in Malaysia is getting saturated. This is evidenced by statistics released by the Ministry of Higher Education (MOHE): 414 private colleges, 37 private universi­ties, 20 university-colleges and seven foreign branch campuses nationwide to date.

Oxford Business Group (OBG) in its recent report on Malaysia 2012 has always believed that education was one of the key backbone sectors in the country that would leave consequential impact towards other indus­tries.

“The Education National Key Economic Area (NKEA) has been targeted to more than double the total gross national income to RM60.7 billion by 2020 from the current RM27.1 million seen in 2012.

“Continuing on its decade-long trend of gross domestic product (GDP) growth (of 6.8 per cent per year on average from 2000 to 2009), the educa­tion sector of Malaysia has been the subject of a renewed focus for the government, as well as from private investors both in Malaysia and abroad,” it highlighted.

Driven by con­sistent spend­ing

The sector, OBG said, had been driven by generous and consist­ent government spending over the past 20 years – although this figure had grown sharply re­cently, with a 60 per cent increase in the last two years.

“According to the World Eco­nomic Forum’s ‘Global Competi­tiveness Report 2011/2012’, this investment in education has been bearing fruits: Malaysia’s overall higher education sector is ranked 14th (out of 142 countries), and its primary education is ranked 21st.”

Meanwhile, OBG noted that growth in the tertiary levels fol­lowed the same path as its coun­terparts, under the MOHE.

“Major challenges in skilled labour needs will require fur­ther efforts and investments: the MOHE expects the need for qualified hospitality personnel to reach 50,000 by 2020 – up from 20,000 in 2009,” it outlined.

“Skilled labour shortages are a bottleneck for economic growth and have been identified as the fifth most- cited “problematic factor for doing business” in Ma­laysia in the ‘Global Competitive­ness Report 2011 to 2012’.

“Building capacity for higher learning is thus a top priority for the Malaysian government, especially within the private sector.”

Meeting ETP targets

With over 500 institutions now established, the higher education sector is build­ing capacity to meet the targets of plans like the Economic Transformation Programme (ETP), which called for more university graduates to manage priority sectors, including tourism, health, biotechnology and education itself.

“This quantitative boom has yet to produce a global standard institution in Malaysia: the QS 200 World University Rankings 2011/2012 ranked the govern­ment-run University of Malaya 167th worldwide (39th in Asia), up 40 places from 2010,” OBG revealed.

“The Times Higher Educa­tion 400 Top World University Ranking 2011/2012, however, did not include a single Malaysian institution in its list, but rank two from Singapore and one from Thailand.

“Nonetheless, Malaysia has increased its attractive­ness as a tertiary education pro­vider in the global market­place. There are 70,509 in­ternational students in Malay­sian higher education institu­tions (25,263 in public institutions and 45,246 in private ones).”

Private sector stepping up

Following the government’s kick-start, education as an enter­prise is increasingly becoming the norm within the country.

Over the past 15 years, the private sector had been widely credited as increasing access and choice for education options in Malaysia. However, the picture was more complicated.

“Everything from government incentives to changes in the public sector, the opening of new niches, and the introduction of private players in the primary, secondary and tertiary level institutions, have all come into play in reforming Malaysian education,” OBG noted.

“Since the government liberal­ised the sector in 1996, Malaysia has seen 26 universities offering bachelor’s, master’s and doctor­ate degrees, as well as 23 ‘uni­versity colleges’ offering only bachelor’s degrees.

“Over 400 private colleges offer­ing a wide variety of certificates and diplomas have also started business. Foreign universities are opening branches in Malaysia to tap into this growing market – a tough competition for Malay­sia’s home-grown institutions, but one which may spur better quality education and benefit the pupils.”

OBG affirmed that the main challenge for the private uni­versities and colleges in Ma­laysia was that of the quality of education.

“The government is therefore increasing its oversight and has started cracking down and is­suing fines on institutions that were less than well managed.”

This has led to the govern­ment announcing a two year moratorium on new private tertiary institutions last month with the aim of raising the coun­try’s status as an educational hub. ‘Highly rated’ foreign campuses will be exempted from this freeze.

In revealing this, Higher Edu­cation Minister Datuk Seri Mo­hamed Khaled Nordin said there were enough institutions in the country to meet local as well as international demand. This was in line with the government’s efforts to spur the sector.

In light of this, BizHive Week­ly speaks to several key play­ers here in Sarawak, namely Swinburne Sarawak, Curtin Sarawak, Wawasan Open Uni­versity and UCSI University – on their thoughts about the industry, their efforts to remain competitive as well as future plans for growth in the state.

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