America and Japan reporting big gains in Vietnamese enrolment
Vietnam currently boasts one of Asia’s strongest economies, with an estimated 6.7% GDP growth in 2015 and an impressive average annual growth rate of 5.5% since 1990. The World Bank, with the Vietnamese government, recently released a report that says Vietnam could become an upper-middle-income country by 2035 - but even now, in 2016, many Vietnamese families are finding themselves with enough spending power to send their children abroad to study. The number of Vietnamese students abroad is soaring, with Japan and the US in particular claiming a large share of total outbound numbers. This surge, which picked up again most recently in 2013, traces back to around 2006 when the number of Vietnamese students really began to take off.
Japan is hugely popular right now
Japan is now the leading destination for Vietnamese students: the 2015 tally of 38,882 Vietnamese students in Japan represents an astounding 47.7% increase - a near-doubling in numbers - from 2014, according to JASSO (Japan Student Services Organization). Not coincidentally, Japan is setting its recruitment sights on the ASEAN region, and Japanese institutions owe much of their recent enrolment growth to students from Southeast Asian markets. The US claims the next-highest number of Vietnamese students. The December 2015 SEVIS by the Numbers update, which counts the numbers of international students in all levels of US education, registered an 18.9% increase in Vietnamese students during the period July-November 2015. Only India (20.7%) and China (19.4%) recorded a higher rate of growth, and not by much. All told, 28,883 Vietnamese students are studying in US schools today, making them the sixth-largest international student population in the US. The vast majority (24,247) are either preparing to study in higher education or already in degree programmes. Significant numbers of Vietnamese students are also in American high schools and boarding schools: 3,329, up from the 2,289 the IIE first measured in 2014. The US’s popularity is tied into its brand power as a study abroad destination. It has for years, along with the UK, been seen as the most prestigious place to study for international students, and Vietnamese have been found to be among the most brand-conscious consumers on the planet, along with Chinese and Indian students. How able the US will be to retain brand equity in the face of emerging Asian regional hubs will be interesting to watch over the near term; as we can see, Japan is already stepping up its efforts in competing effectively for Vietnamese students. Australia, too, is attracting impressive numbers of Vietnamese students, with 28,524 Vietnamese students studying in the Australian education system in late-2015; however, this is down slightly from 2014. China is another leading destination and it hosted about 13,000 Vietnamese students in 2013. It is not clear how that enrolment base in China has grown in the years since. But the broad trend appears to be that a lot of the recent-year growth is driving to Japan and the US - both have increased by nearly 50% between 2013 and 2015 - whereas other lead destinations for Vietnamese students have been relatively stable over the last two to three years.
What is driving outbound numbers?
As much as the Vietnamese economy is growing, it is not yet doing so on the strength of its university graduates. While in developed countries, 25-30% of the labor force is composed of university graduates, they make up only 7% of the labour force in Vietnam. Moreover, among working-age Vietnamese, students with bachelor or vocational degrees were the most likely to be unemployed in 2015 - while those with no training and no specific skills somehow were the least likely to be unemployed, according to the Institute of Labour Science and Social Affairs. Many believe the problem lies within a university sector that has massively expanded in recent years, producing more graduates – without necessary improvements to the quality of education provided to students. Persistent problems include large class sizes, underqualified faculty, and uneven quality standards for programmes across a complex system. However, a new Minister of Education and Training, Phung Xuan Nha, has just been appointed. Minister Nha quickly noted that his first priority was to "shift the current education system centered on raw content" to make it more focused on producing graduates with employable skills.
Bright prospects ahead
The American Chamber of Commerce in Vietnam says that in only four years’ time (that is, by 2020), the average Vietnamese person will command an annual income of US$3,400, up from US$1,400 now, and that the middle and upper class in Vietnam will double in size over that same period. The robust economy is inspiring confidence among Vietnamese consumers, and many families are keen for their children to gain experience in studying and working abroad. A recent survey from the Boston Consulting Group (BCG) Center for Consumer and Customer Insight (CCCI) of more than 3,000 urban consumers in Vietnam and Myanmar found that "Vietnamese consumers were among the most optimistic in the world, even more than their counterparts in China, India, Indonesia, and other fast-growing emerging markets." Other notable points about the Vietnamese population include:
- The median age is very young: 28.5 years of age;
- Nearly half (45%) are 25 years old or younger;
- Vietnam has the world’s fastest growing percentage of ultra-high-net-worth individuals – those having a net worth of at least US$30 million;
- Roughly one-third of Vietnamese are expected to join the "middle class" by 2020;
- 90% of outbound students are self-funded;
- Along with Jakarta, Mumbai, and Delhi, Vietnam’s Ho Chi Minh City is predicted to be among the Asian cities that will experience the most rapid growth in wealth up to the year 2024.
Commenting recently on Vietnam, World Bank president Jim Yong Kim said,
"In the last 30 years, Vietnam has become one of the world’s great development success stories, rising from the ranks of the poorest countries. On the strength of a nearly 7% average growth rate and targeted government policies, tens of millions of people have lifted themselves out of extreme poverty."
As with several other ASEAN countries, continued growth will depend on a more sustainable approach, and this will necessitate some realignment in Vietnam’s economic priorities. The environment is under increasing pressure as the economy has revved up; the World Bank notes that greenhouse gas emissions and pollution "are beginning to pose serious health hazards, especially near Hanoi and Ho Chi Minh City." But Vietnam boasts decades-long experience in changing economic course: in 1986 the country launched "Doi Moi" reforms that liberalised the economy and eventually transformed Vietnam from being foreign-aid dependent to a rising Asian power - now complete with thousands of eager students willing, and able, to study abroad.