US Higher Education as an Export: It is about the money, but also much more

By John Douglass, Richard Edelstein and Cecile Hoareau. In a new CSHE research paper, “US Higher Education as an Export,” John Aubrey Douglass, Richard Edelstein, and Cecile Hoaraeu discuss the role of higher education in the US’s portfolio of service sector exports.
The following brief is part of a larger study by the authors on the economic impact of international students and is drawn from a pending proposal to create a California Global Higher Education Hub in the San Francisco/Bay Area. Here, the authors state, “Higher education is the best export, not only because it is profitable and meets labor market and growth needs. Higher education also fulfills a diplomatic and cultural mission like no other form of trade. It diffuses the best of the US’s values across the world, strengthens the US’s image and international position and creates personal relationships which are ever so important in stabilizing the world’s global order.”
The authors argue that, “The US could, and should strategize, to double its enrollment of international students by 2020.” Currently, the US enrolls some 691,000 international students; these students pay tuition and fees estimated to a total of $13 billion dollars during the 2009-10 academic year. Discounting financial aid, and adding the cost of living expenses for students and their families, they estimate that the direct total economic impact of international students is nearly $19 billion a year.”
In his first year of office, and facing the challenge of an economy in severe decline, President Obama identified a key element for future economic growth for the US: we need to “export more of our goods.” The US trade deficit remains a source for other economic maladies, including huge personal and government borrowing to help buy goods and services from abroad that, in turn, has helped to sustain the quality of living for many Americans – or at least until the onset of the Great Recession. The Obama administration set a goal to double the exports of goods and services by 2015 – less than five years.
Is this an achievable goal? The fact is that the nation’s ability to significantly grow the export of non-high tech manufactured goods, or even natural resources, is fairly limited, even if the dollar declines in its value as many predict if US borrowing continues unabated. America’s most significant growth potential is probably in the service sector. This includes financial services, patent royalties and licensing fees, management and consulting, entertainment, telecommunications, and education.
Among the top service sectors in which the US had a trade surplus in 2008, education ranks sixth - more important than entertainment (Film, TV, Sports and the Arts), advertising and even communications.). Most of the “import” costs relate to US students going abroad for education programs.
“Higher education is the best export, not only because of it is profitable and meets labor market and growth needs,” they state. “Higher education also fulfills a diplomatic and cultural mission like no other form of trade. It diffuses the best of the US’s values across the world, strengthens the US’s image and international position and creates personal relationships which are ever so important in stabilizing the world’s global order.”
Download US Higher Education as an Export: It is about the money, but also much more.