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Declining populations point to a sombre future for HE

Many countries in East and Southeast Asia saw two decades of unprecedented expansion in higher education as participation increased, fuelled by rising prosperity and aspirations.

But dramatically declining birth rates in the past decade leading to a contraction in the university age cohort, which will continue into the next decade, will mean tighter constraints on universities and in some cases a restructuring of the sector.

Demographic trends will cause upheaval in higher education in these countries in the next 10 years as universities brace for a more competitive environment. To stave off closures, some options being pursued include the recruitment of foreign students to shore up declining numbers, and various forms of collaboration between universities to pool resources.

Japan, which led the way both in university expansion in the 1980s and in demographic decline since the early 1990s, has seen its population of school-leavers shrink by almost half from a peak of 2.05 million in 1992 to just under 1.2 million in 2014 before flatlining.

But its woes are not over. Japan’s National Institute of Population and Social Security Research in Tokyo predicts this cohort will begin to fall again from this year onwards to roughly 990,000 in 2031.

Taiwan will see a decline in its youth population of around 46% between 2015 and 2050. Thailand will experience a 38% drop in the same period, with South Korea a 31% decline and China 21%.

While the effects on higher education have been very visible in Japan, South Korea and Taiwan, Singapore’s universities are countering the pinch by enrolling more returning students and older students under the government’s lifelong learning programmes, including SkillsFuture, while the government is pushing at the same time for a rise in participation rates.

The previous South Korean government under Park Geun-hye who left office in May 2017 also provided funds for continuing education on major campuses to shore up numbers.

China – delayed impact

In some of these countries such as China, the rapid rise in the gross enrolment ratio to around 43% from 18% in a decade allowed the university sector to continue to expand even as the birth rate began to fall.

It postponed the inevitable crunch which will soon begin to impact on higher education in China after years of phenomenal growth, just as it has in South Korea, which has the world’s highest higher education participation rate – over 82%, compared to an OECD average of 42%, which meant there is little upside for universities competing for students.

China’s demographic decline could have even wider implications, regionally and globally, due to the large number of Chinese students who go abroad for university education – including to other Asian countries that are seeing a reduction in the youth cohort. Over 550,000 Chinese students were studying overseas last year – a quarter of the world’s total.

“China’s share of the world population and its relative share in this age bracket is rapidly declining – at the moment the student population in China is roughly 15% of the world total, but it will decline to 7.5% – so it will halve by 2100,” said Charles van Marrewijk, professor of international economics at Utrecht University, Netherlands, and head of research at the International Business School Suzhou at Xi’an Jiaotong-Liverpool University in China.

“The Chinese government doesn’t have a way to fix this,” he says.

Less pressure on students

Demographic decline has its upsides. There is a measure of relief for students in Japan, South Korea, Thailand, Vietnam and China, which have highly competitive centralised university entrance examination systems that until now mercilessly funnelled a large cohort into a small number of university places.

Though competition for the top universities is still fierce, pressure lower down is easing somewhat.

Once a one-size-fits-all rite of passage, the competition between universities has meant early admissions to steal a march on rivals and alternative systems, including interviews and essays and credits for sporting or artistic activities, have been introduced as part of wider reforms. Scholarships have been expanded to students in disadvantaged areas to improve participation rates in both Japan and South Korea.

Provincial universities take the brunt

As Japan has shown, and others are beginning to experience, private universities that expanded massively during the years of plenty and who depend on tuition fees for survival and universities in outlying provinces and rural areas are the first to feel the crunch.

Some multiple-campus universities in Japan are closing outlying branches. Many regional universities are trying to make themselves more attractive to keep young locals from leaving for the cities, such as partnering with the local community and bringing volunteering and social service activities into the curriculum.

In response to lobbying by regional universities, the Japanese government this year approved a 10-year research funding plan for regional universities to retain more professors and stem the exodus of students to the cities.

In South Korea, universities away from the capital Seoul, particularly in less populous regions like Gangwon Province, are particularly hard hit. Many universities receiving a low grade in the education ministry's restructuring performance evaluation in early April are in such areas.

Last year alone, three Korean universities, Seonam University, a private university in the city of Namwon in North Jeolla province, the private Hanzhong University in the city of Donghae in Gangwon province, and Daegu University of Foreign Studies in Gyeongsan, North Gyeongsan province, closed due to a lack of funds.

Seonam University, founded in the halcyon 1990s at a time of rapid expansion in higher education, but which was also affected by a corruption scandal, could only fill 27% of its student quota last year.

A similar scenario is playing out in Thailand and Taiwan. In Taiwan enrolment rates at several universities hit new lows for the 2017-18 academic year. Some 17 institutions filled just under 60% of their places, according to a report by Taiwan’s Ministry of Education released in December 2017. Two provincial universities were barely able to fill a third of their seats.

The Taiwan Ministry of Education’s approach in the past of allocating funds to institutions based on the number of students enrolled has not helped. The island has 150 universities and several of them failed to enrol a single new student in some of their programmes during the 2015-16 academic year, statistics released by the Ministry of Education in December 2017 showed.

In mainland China, student allocation is centrally planned by the government but tinkering with allocations between provinces is a sensitive issue. In 2016 demonstrations broke out in several cities including Nanjing and Wuhan when the government rejigged quotas to make more places available in richer provinces to students from poorer provinces.

Private universities also hit

South Korean universities will be hit dramatically by the declining cohort, particularly from 2024 onwards. Research by Cho Young-tae, a professor of health demographics at Seoul National University, said 73 of the country’s 189 universities will no longer be needed by that date.

In Thailand, education expert Arnond Sakworawich, a lecturer in actuarial science and risk management at the Graduate School of Applied Statistics at the National Institute of Development Administration, suggested three quarters of Thailand’s universities were “at risk of closure” in the next decade.

At its peak in 2010 Thailand had some 2.5 million students enrolled in tertiary education. This has dropped 25% to a little over 2 million last year. Private universities that led the expansion of Thailand’s higher education system in recent decades – rising to around 70 private institutions now – have been disproportionately affected.

"The number of new students enrolling in private universities has dropped almost 50% in the past few years," said President of the Council of University Presidents of Thailand, Suchatvee Suwansawat, in June last year. The number is expected to drop another 50% in the next three to five years.

Last year, two private universities in Thailand, Srisophon College in Nakhon Sri Thammarat and Asian University in Chonburi, shut down due to financial difficulties, Thailand’s Bangkok Post newspaper reported.

Mergers vs pooling resources

Taiwan’s education ministry estimates up to a dozen of the country’s 51 public universities and 20 to 40 of the 101 private universities will be merged or closed by 2023, and it is encouraging mergers.

Last year three universities in the port city of Kaohsiung – National Kaohsiung Marine University, National Kaohsiung University of Applied Sciences and National Kaohsiung First University of Science and Technology – merged to form the National Kaohsiung University of Science and Technology, amid criticism that some departments had lost out in the merger. Mergers have not been easy and universities have been looking at other forms of joint operation short of a merger.

In Japan, two national public universities, Nagoya University and Gifu University, are discussing merging their administrative operations to reduce their overheads. They will keep the names of the two universities which will remain in their current locations, and are looking at bringing other national universities in the Tokai region, such as Mie University, into their joint project.

In South Korea’s second-largest city of Busan, the presidents of four state universities gathered at Pusan National University in early April to discuss the establishment of a cooperative network.

Previously Dongseo University and Kyungsung University in Busan agreed in September 2016 to pool professors and campus facilities. Students had access to the sports and arts facilities at Dongseo University and the library at Kyungsung University. To maintain standards, the two universities share professors for a number of courses, with the professors travelling between the two universities.

“With the drop in number of students and resulting drop in university income, it is natural for the quality of education to drop as well,” Nam Ho-soo, head of the research and planning department of Dongseo University, was quoted as saying. “When universities start to cooperate and share resources, it can lessen the financial burden for all.”

Yonsei University in Seoul and Pohang University of Science and Technology in Pohang, in Korea’s North Gyeongsang province, announced in March that they would pool professors and research facilities in an agreement that was all the more striking because they are located in cities almost 300km apart.

Citing the declining student cohort and reduced investment, they will offer programmes jointly run by the two universities and students will receive a joint degree on graduation.

Bring in more foreign students

In Korea, Thailand, Taiwan and some other countries, one way to counter the drop in student numbers is by attempting to recruit more foreign students. But these are not traditional receiving countries and incentives, including offering scholarships to foreign students, are required.

Earlier this year, Korea’s ministry of education lowered the enrolment test scores for foreign students. Universities in Korea such as Korea University in Seoul and Dankook University with campuses in Yongin and Cheonan offer scholarships and coverage of accommodation expenses to foreign students.

China is stepping up the number of scholarships it offers to bring in more international students, “but it is from a very, very low base”, says Van Marrewijk, whose chapter on “Demography and Inequality” in China will appear in a forthcoming book later this year on China in the local and global economy. “Relative to the total number of students in China, this is not going to have any dramatic effect.”

But foreign students are not a panacea. Taiwan’s ministry of education announced in late 2016 that it aims to double international student enrolment to about 58,000 by 2019, but Taiwan is actually seeing an outflow of its own students to mainland China.

Singapore froze foreign student numbers after rising immigration sparked local tensions. Elsewhere regional geopolitical tensions caused a drop in Chinese students enrolling in South Korea after universities had to endure criticism that over-recruitment was threatening quality, and drop-out rates were rising.