Export of expertise in education
In spring 2009 Finpro launched a project aiming at building the national cluster for education export named later on “Future Learning Finland”. In July 2009 Minister Henna Virkkunen appointed a working group to prepare an export strategy for Finnish education by the end of 2009. Work of the group was supposed to contribute towards creating a Finnish educational export cluster with Finpro’s Future Learning Finland project. Here politic social context there was the need for defining “education export” or find another term for export of services related to the Finnish know-how in education.
To find a term for phenomenon entitled “education export” in New Zealand, Australia, Great Britain and US was one goal of “Report on the export of Finnish education expertise – Thoughts for export promotion based on experiences of Future Learning Finland network (Juntunen 2010).” Besides, defining the chosen term in the Finnish context was part of the report’s goals.
It was suggested on report that “export of education expertise” (in Finnish: koulutusosaamisen vienti) is more accurate term than “education export” to describe nature of the Finnish education export business. The first argument of a short concept analysis was that the latter term refers to only educational services, but the Finnish offering includes also e.g. consulting services and technological solutions for facilitating learning processes. In fact, the Finnish offering differs radically from the offerings of countries where English are spoken as a native language. In those countries the import of foreign students constituted the most significant revenue source of education export business. For instance in New Zealand volume of foreign students’ import was 95% of the total revenues (the Economic Impact of export education 2009, 1).
Secondly, it was stated on report that the previous term refers to the fact that in case of Finland existence of business in sector called “education export” in many English-speaking countries must be based on internationally recognized expertise in education related issues. Expertise in education means that the Finnish system of education is high quality and self-renewing, the Finnish education providers have modern and future oriented concepts of learning and learning environments, and the Finnish education professionals are equipped with modern views of pedagogy. Without continuous invest on development of education and creation of learning-related innovate environments as well as branding the Finnish expertise in education and developing the Finnish offering to global education markets, the Finnish exporters face difficulties in convincing potential clients of the value of Finnish offering. Their main clients are not foreign students and degree programs in Finland cannot be the main products. (Juntunen 2010, 3)
On the report export of the Finnish education expertise was defined as export of the expertise in education based products, services and solutions for foreign clients (with two exceptions) and beneficiaries by tapping all potential modes of mobility of services across the borders. Private persons (like students and education staff), national, regional or local authorities, national or international third sector organizations (such as such as EuropeAid), and private companies and their customers were considered to constitute potential clients and consumers segment the Finnish education expertise export (Juntunen 2010, 3).
According to the General Agreement on Trade in Services (GATS 1994, 285-286) there are four modes for mobility of education services:
- Cross-border supply: Service delivered within the territory of the Member, from the territory of another Member Service supplier not present within the territory of the member.
- Consumption abroad: Service delivered outside the territory of the Member, in the territory of another Member, to a service consumer of the Member.
- Commercial presence: Service delivered within the territory of the Member, through the commercial presence of the supplier Service supplier present within the territory of the Member.
- Presence of a natural person: Service delivered within the territory of the Member, with supplier present as a natural person.
Reason of identifying client segments and modes of service mobility across the borders as a part of concept analysis was to provide framework for analytical discussion on the Finnish export of education expertise. The main argument regarding clients was that instead of individuals the main client segment are authorities. As to GATS modes of mobility the main message was that without commercial presence in the main markets and without virtual services education sector cannot constitute a significant new export sector by 2015, because Finland cannot be the destination of consuming training services abroad due to legislation denying tuition fees.
In 2009 the working group, which prepared the education export strategy for approval of the Council of State noted that the “export of education expertise” can be considered more accurate term than “education export” to describe phenomenon the group was trying to grasp. However, the group decided to use the term “education export”, because it has been used in English-speaking countries. The group, however, pointed out that the education export must be understood in the broad sense meaning all education related exports. (Education export strategy 2009, 7)
Since 2010 “education export” is used as an official term in administrative language (see e.g. International education markets and Finland 2013). However, there is still lack of precise definition of “education export” and systematic use of that definition among education exporters and the Future Learning Finland. In one hand matters not fitting into definition called “education export” are counted among education export. In other hand it is not explicated sufficiently enough what “education export” could mean as products, services and solution.
“Education export” implicates to commercial activities meaning that nature of “export of education expertise” is profit-oriented. Currently projects not being commercial ones are reported under “education export”. So, statistics on volume and structure of education export are not reliable. Secondly, imprecise term e.g. allows higher education institutions to report international academic activities under “education export” discouraging to commercialize education expertise, and to create business models for education export, which are preconditions of expanding and professionalization of the business (Juntunen 2010, 3)
Business areas and business models
Listings of business areas of the Finnish education export provide responses to question: What does “education export” means as products, services and solutions. “Thoughts on Education export” blog on 3rd of November 2013 provides a list of the most important business areas to Finland in terms of business potential. The top 10 areas on the list were following:
- Operating schools, colleges and universities abroad
- Strategic partnerships with foreign operators so that role of Finnish party consist of expert services, products and solutions improving quality, effectiveness or any added value valuable to operator or authorities
- Localization of relevant parts of Finnish system and practices to solutions for local needs so that Finnish education exports get a significant pilot
- Degree business by utilizing all possible modes of service mobility, and using earning logics which are not only based on the commissioned education model (in Finnish: tilauskoulutusmallille)
- Scalable further education for public sector by using multi-mode learning methods including virtual learning
- Learning games (e.g. Rovio’s products)
- Virtual learning environments, such us products of Tribelearning
- Products for learning (such as Sanako’s products for language learning and Teklab’s labs for engineering education)
- Education system reforms funded by donors of international development or authorities of developed countries
- Content for education and training including new types of learning materials
Classification of business areas would improve quality of the debate on education export. It is useful for all members of the national education export cluster Future Learning Finland from policy makers to business actors in process of finding focus for actions. In other words, classification supports all levels of Future Learning Finland cluster to find focus for the education export business, and to identify actions needed to be carried out for improving likeliness that by 2015 education export constitutes a significant new export sector in Finland.
How to increase volume of education export significantly in short term? This question is linked with the business area listing above and assessment of potential business volume of each area. Easing terms of conditions to charge tuition fees is one action needed to be done e.g. along with suggestions of Dr. Päivi Lipponen’s group. Without easing money making with degrees achieving goals of the Education Export Strategy is unrealistic. Besides, increasing number of contracts on operating schools or being strategic partner for schools operators abroad are needed. To avoid limitations of low number high-caliber specialist with sufficient language and communication skills, the Finnish education export also have to increase sale of technology product and solutions for learning as well as sale of educational content. Being competitive in consultancy service provision based education system development business is challenging. However, contracts on large-scale system development projects are still definitely needed in order to achieving the national goals. (see above mentioned blog)
Classification of business areas, what does “education export” means in our case, also constitutes a starting point for designing new business models for education export. Significance of business models as competition factors has been increased as result of development of information technologies, internationalization and changes in business network. “Companies operate more and more in partnership networks, offering joint value propositions, build multi-channel and jointly owned channel networks, and apply different earning logics. Competitions between companies take place with increasing significance between business models instead of single products and services”. (Pulkkinen et al., 2010, 8 – 9).
Business Model Canvas, originally presented by Osterwalder and Pigneur (2010) is these days a widely used tool for designing, developing and presenting a potential business concept. The Canvas model is applicable in the context of education export and it consists of the following nine blocks supporting business designing:
Being competitive in global education market presupposes competitive business model, and members of FLF, for sure, must pay more attention to business model development. Canvas provides one tested framework for doing it, and business areas classification support process of finding content for business model.
The business model Canvas also provides a framework for analyzing weaknesses of current situation. A list of some top weaknesses of the Finnish education export, state of affairs hindering the Finnish education exporters to be more competitive in global markets, is the following:
- Value proposition: Finns are not good at selling value and telling-stories
- Customer: authorities are the main customer segment of the most of education exporters, but understanding of value of services for a chosen customer segment is weak
- Customer relationships: customer management is relying too much on home-office-based efforts instead of managing relationships through locally employed agent, local partner or direct investment
- Channels: virtual mobility of services and provision of services via units abroad should be considerably enforced as modes of service delivery
- Revenues: earning logic is too much based on invoicing expert’s input
- Activities and resources: due to a short history of the Finnish education export professionalism level of education exporters is not high enough
- Costs: total expert costs are high, and means of reducing costs are not in use
- Partners: education exporter’s capacity to orchestrate their business network in the global market in customer cases so that they are reliable service provider with competitive price is weak.
It really matters, what does “education export” means in the public debate, in discussions between education exporters and in talks within exporters. The lack of definite and generally agreed concepts limits the opportunities to design and expand education export business and hinders the allocation of the public resources on the most promising business areas.
Timo Juntunen, Director of Global Education Services, JAMK University of Applied Sciences, firstname.lastname@example.org
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General Agreement on trade in services (1994). Available on the World Trade Organization Website http://www.wto.org/english/docs_e/legal_e/26-gats.pdf (Cited 22.9. 2014)
Education New Zealand & Ministry of Education (2008). The Economic Impact of Export Education.
Juntunen, T. (2010). Selvitys suomalaisen koulutusosaamisen viennistä – Ajatuksia viennin edistämisestä perustuen ”Future Learning Finland” – verkoston kokemuksiin. Selvitys on tehty Finprolle ja se on julkaistu OKM:n sivuilla. http://www.minedu.fi/export/sites/default/OPM/Tapahtumakalenteri/2009/11/koulutusvienti/Juntunen_Selvitys_koulutusviennista.pdf. (Cited 22.9.2014)
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Ministry of Education and Culture (2010). Finnish education export strategy: summary of the strategic lines and measures. Based on the Decision-in-Principle by the Government of Finland on April 24, 2010. http://www.minedu.fi/export/sites/default/OPM/Julkaisut/2010/liitteet/okm12.pdf?lang=en (Cited 22.9.2014)
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