For gaining awareness in the regional market, the following activities were carried out:
- Facilitating exchange programs with visiting lecturers to tap on foreign areas of expertise to identify common issues faced by students in Australia and the regional arena.
- Involvement in student exchange programs with other universities in the region.
- Allowing private universities in the region to provide courses and programs that are offered by Dorkson University.
3. Environmental Analysis
3.1 Government pushes toward higher percentage of graduates
The proportion of graduates in the labour force has risen steadily - from 7.1 per cent in 1991 to 16.9 percent last year. The government had said previously that it aims to increase this to 25 per cent by 2010. Measures to improve the country's tertiary education system feature prominently in the Economic Review Committee's recommendations on how to empower the individual. Besides calling for a greater proportion of university graduates in the labour force, it was recommended that postgraduate intake be expanded to facilitate knowledge creation at the local universities (Eugene Low, 2002).
The subcommittee also suggested that one or two niche private universities be set up to provide more competition to the existing universities and differentiation within the university sector. It further recommended that the government extend tuition subsidies to private and public universities, and said the government should consider extending financial support for overseas education (Eugene Low, 2002).
3.2 Government policy of life long learning
In today's fast-changing knowledge-based economy, only continuous learning will equip Singaporean for tomorrow competition. For Singapore to remain relevant and prosperous in this highly competitive global market, Singaporeans need to be knowledgeable, skilled and adaptable. While continuing education is not a guarantee against unemployment, it does enhance greater employability.
The momentum to build a more skilful workforce has not dampened even though Singapore economy is progressing very slowly currently. In fact, skills development and life-long learning are becoming more important now than ever before. Workers have to look beyond the uncertain economic outlook and continue to upgrade their skills constantly.
Furthermore, there is also a need for employees with higher education and skills nowadays. Job positions like executives, professionals and technical personnel are what most employers seek. As for jobs which require lower skills (such as cleaners and productions staff), most companies are recruiting less than before and usually these unskilled workers will be the first to be laid off when companies are downsizing or are moving its low value-added operations to other countries.
3.3 Structural unemployment due to recession
Singapore is facing a long-term potential strain of structural unemployment, which will be a permanent feature of the city state's economy. Unemployment rate in the city state is on a rise currently with lower skilled being the hardest hit and none being spared in the current situation.
The Singapore labor market was adversely affected in 2001 by a global economic slowdown and was exacerbated by the September 11 terrorist attacks. Employment growth was bad for the whole year as many companies reduced or froze recruitment. Moreover with a fresh round of retrenchments taking place (Example, Port of Singapore Authority, PSA, and Housing Development Board, HDB), more unemployed will be competing for the reduced job vacancies that are available in the market.
Assistance must, therefore, be extended to displaced workers to help them find jobs in areas such as the services sector. But for this to work, workers must go for skills upgrading and retraining. This is why Singapore government is putting in so much resource for skills upgrading and retraining programmes for workers and those who are unemployed.
3.4 Competition from local universities (NTU, NUS, SMU) and other private institutions
Currently, another 5,000 university places will be available each year as the Government moves towards providing tertiary education to one in four Singaporeans. This is 50 per cent more than the total intake of 10,000 to the three universities Singapore now has - the National University of Singapore (NUS), the Nanyang Technological University (NTU) and Singapore Management University (SMU). NUS and NTU will take in about 8,000 undergraduates yearly and SMU, when it is fully expanded, will take in 1,500 students (Sandra Davie, 2001).
Though there are three local universities already, there is still room for private universities in Singapore as they can take in foreign students who would otherwise have gone to countries such as Australia, Britain and the United States for their higher education. Thus, setting up private universities would help contribute to a vibrant tertiary-education sector for Singapore.
Deputy Prime Minister Tony Tan appeared to back the National University of Singapore's plans to go multi-campus - and is going to propose that private universities be encouraged to set up in Singapore. Foreign universities could also be encouraged to open 'branch campuses' in the Republic to stimulate further competition crucial to creating the kind of innovative work force Singapore needs to flourish in the 21st century (Louis Branson, 2002).
3.5 High demand for tertiary education in Singapore
The Committee to Review Upgrading Opportunities at Degree level stated that Singapore needs a fourth university and it should not just be for poly graduates to upgrade themselves. In its progress report, the committee said the need for more university places would come from increased aspirations for upgrading and the demand for degree expertise in certain sectors of industry. Furthermore, a fourth university would cater to those who cannot afford to pursue a degree overseas. Moreover, through part-time courses, working adults would have more opportunities to acquire a degree. And, late bloomers would get their chance to upgrade (Rachel Ong, 2001).
3.6 Paradigm Shift on Education
3.6.1 Organisation becoming learning organization
Seemingly, many organizations are taking up the initiative to become learning organizations. They have recognized the importance and the benefits of undertaking such actions. Some examples are Leica Instruments, McDonald’s and SingTel. Even government bodies like the Ministry of Manpower (MOM), Singapore Police Force, and Singapore Development Board (SDB) are adopting this strategy.
3.6.2 Constant Upgrading
Singaporeans are urged to actively pursue skills upgrading and to cast off laid-back attitudes. Singaporeans are to show their hunger for learning by taking up training courses on their own, instead of waiting for someone else to push them into doing so.
As Singapore transforms its economy into one centered on higher value-added services, such as those in the life sciences, chemical industries and finance, individual workers must respond by ensuring they have the right set of skills (Natalie Soh, 2001)
3.6.3 Changes and Flexibility in the education system
Format of questions in the recent ‘A’ level paper has changed. Students are encouraged to offer personal views and bring higher-order skills of analysis, synthesis and knowledge application to their reading and writing. The exam questions also require them to be discussive and express their points of view (Sandra Davie, 2002).
In another case, kindergarten teachers are trying to teach young children to be more creative by adopting a more interesting learning approach. This is different from the past when memorizing is a preferred mean of teaching.
4. Policy Issue – SAFTA
4.1 Overview
On 17 February 2003, the Minister for Trade, Mark Vaile, and the Minister for Trade and Industry of Singapore, George Yeo, signed the Singapore-Australia Free Trade Agreement (SAFTA) in Singapore. ()
The SAFTA will help both counties build on their strong economic partnership and will also contribute to greater growth, prosperity and security in the region. Both countries have made commitments in SAFTA that go beyond their existing liberalization obligations in the WTO, and they see it as a stepping stone towards further progress at the multilateral level. ()
This SAFTA agreement had provide mutual benefits to both countries as they sought to build closer economic relations through the following stipulations such as:
- Elimination of all tariffs from entry into force, including on Australia beer and stout.
- Comprehensive and transparent 'negative listing' of services commitments.
- National treatment and market access commitments for Australia education providers
- Singapore government overseas scholarship will be tenable at Australian universities.
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A summary of key outcomes for Australia, which includes the relevant product and service industry stipulations and regulations were shown in Appendix 1. The main industries involved included education, financial services, telecommunication etc.
Signing of the SAFTA can also help to take the agenda forward through its commitments on tariff elimination, market access for service suppliers, transparent customs procedures, promotion of fair competition, access to government procurement markets, increased integration of capital markets, easier entry for business visitors, mutual recognition agreements and co-operation in the education sector.
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5. Policy Analysis
5.1 Aim of the Policy
“Services are a key component of the bilateral trade relationship, particularly education.” ()
The policy, SAFTA, aims to facilitate greater interchanges between Australian and Singaporean academics and institutions and generate higher levels of Australian education services exports, while at the same time offering improved market access and stronger and more transparent regulatory frameworks for Australian education providers.
5.2 Impact on the target group
The target group consists of all consumers with an exigency for tertiary education services, which includes those that can commit on a full-time or part-time basis.
With the implementation of the SAFTA, consumers will be able to choose from a wider range of educational institutes, from studying overseas at the chosen establishment to having the foreign universities being set up in their home country and hence having the benefit of studying and living near their home, while still being able to graduate with a certificate from an overseas institute.
In view of universities setting up a foreign subsidiary, such as Australian universities setting up campus in Singapore, or Singapore universities setting up university grounds in Australia, consumers are likely to gain in the form of more competitive tuition fees as universities compete with each other for buyers of education services.
5.3 Stakeholders – Competitors
5.3.1 Opportunities for foreign players in the private and public sector
With the Free Trade Agreement between Singapore and Australia, there arises unbounded opportunities for almost all of the industries which are involved in some degree of importing and exporting. This is true even for the education industry, whether in Singapore or Australia market, as they export education services to foreign students studying in their own country.
With the agreement in place, Australia universities have the opportunity to diversify into Singapore market and provide private courses and programs for students in Singapore. It may prove to be a viable move as the Singapore government has endeavored to make Singapore an education hub, which means that entry of foreign universities are welcomed in Singapore. Therefore, the universities already in place here will be faced with intense competition as foreign universities fight with them for the local market.
Conversely, Singapore universities could set up their campuses in Australia and vie with them for their market. This might prove to be a threat to the Australian universities because of the recognition of the quality of degrees offered by Singapore universities.
5.3.2 Competition from domestic private and public players
The education system is an important component in the Singapore government’s economic and nation building strategy. Given Singapore’s lack of natural resources, the country’s population has become its most important resource. Therefore, the government believes the provision of quality education is imperative and it encourages its citizens to constantly upgrade and educate themselves. Hence, this gives rise to a relatively large number of publicly and privately owned universities.
Government-owned universities in Singapore are the National University of Singapore (NUS), the Nanyang Technological University (NTU) and the newly founded Singapore Management University (SMU), and private universities and management schools comprises of Singapore Institute of Management (SIM), Marketing Institute of Singapore (MIS) and Thames Business School, et cetera. The intense competition for all providers comes from having to align or out-beat their opponents in terms of the packages provided and the quality of the degrees offered.
In Australia, there are presently 37 public universities around the state vying to meet the growing demands in the education sector. Likewise, the strong competition in the country prevails, even more so with a growing population.
5.4 Stakeholder – Singapore Institute of Management (SIM)
Singapore Institute of Management (SIM) is an independent professional membership organization that aims to provide educational services for part-time as well as full-time students. Due to the fact that SIM collaborates with more than ten foreign higher institutions to provide certificate, degree, diploma and post-graduate programmes and in view of the SAFTA, some of the these Australian institutes may decide to set up subsidiaries in Singapore rather than collaborating with SIM to provide external degrees.
When the Australian institutes decide to set up subsidiary in Singapore, not only will SIM lose its student base as well as opportunities to earn more revenues. SIM might have to look for opportunities to collaborate with other overseas institutes to make up for the lost of revenues.
5.5 Stakeholders – Manpower (Lecturers)
With the opening of the new campus for Dorkson University in Singapore, there will be an increased demand for experienced lecturers, especially those that has been with Dorkson for many years and are well aware of the way the system operates. As a result, there will be manpower shortage when the institute transfers overseas lecturers over to teach the students in Singapore.
There are a lot of issues to bear in mind with respect to the transfer of expatriates. For instance, the benefits package, the impact on their spouses and more importantly, their adaptability to a new environment. However, the problem of maintaining expatriates abroad may be amplified by the higher cost that is attached to retaining their lecturers in view of a labor shortage.
6. Impact Analysis
6.1 Strengths
6.1.1 Set up subsidiary in Singapore without government restriction
The SAFTA will provide Dorkson University with certain advantageous opportunities. The most direct being the ability to set up its own campus in Singapore. Initially, it is quite difficult for foreign education providers to set up campuses in Singapore with total control over the organisation, as the Singapore government imposes certain barriers and restrictions to protect its own universities. Due to this, the only possible way for foreign universities to break into the Singaporean education market is through joint ventures. As such, Dorkson has been going into joint venture with one of the institute in Singpore for the past years, in a bid to adhere to the rules and regulations that the Singapore government imposes while still catering to the Singapore market. However, with the advent of the SAFTA, the government can no longer have practices to restrict their access.
6.1.2 SAFTA will allow direct access to Singapore market
With it own campus in Singapore, Dorkson will be able to reach out directly to the Singapore market and gain substantial benefits. Before the introduction of SAFTA, Dorkson will have to go into partnership so that they will be able to offer courses in Singapore. Now, because of the total control they have over the organization, they are able to provide a much wider range of courses and programs according to the demand in the Singapore market. They will have greater autonomy and say in deciding on the areas to improvise and a shorter time is required for them to make any changes since there will be a management team in Singapore analyzing the changes faces and react quickly.
6.1.3 Build a world-wide recognition status
Having campuses in other countries will increase awareness of Dorkson University and elevate its status when it is widely recognized. This is especially so when the campus is based in a country that is well known such as Singapore. Additionally, Singapore aims to transform itself into a global education hub, which will serve to attract the attention of even more foreign students seeking education; therefore, the name of Dorkson will be even better established with the nurturing of the Singapore education system.
6.1.4 Knowledge sharing with Singapore education industry and exchange of information
With the advent of the SAFTA, it enables the foreign institute to share knowledge with local educational institutes by bringing in unique ways of how the institute will be run. At the same time, the foreign institute will be able to gain knowledge of how the local organizations actually run their business operations and improvise on it. In addition, both local as well as foreign institutes will be able to foster personal ties, cultural understanding and tolerance for other another.
6.1.5 Singaporean’s view of Dorkson University and the degrees it offers
As Dorkson’s partnership with one of the local institute has been ongoing for many years, this means that there would already have been extensive advertising for the courses provided by Dorkson through the efforts of the partner. Therefore, we can safely conclude that the Singapore education market has been well exposed to Dorkson’s name and the courses it offers. As such, in the event of a conclusion to build a campus in Singapore, it will not be difficult for Dorkson University to break into the Singapore market easily and swiftly and as a result, capture significant market share.
6.1.6 Possibility of foreign students taking foreign degrees in Singapore
In the event of the educational institute setting up subsidiary in Singapore, it can expect students not only from the local but also from other countries who wish to undertake courses provided in Singapore. For example, students from China may opt to take the external degree in Singapore due to the difficulties in adapting to the Australian culture and dominant language used. This is also due to the fact that there are a higher percentage of Chinese in Singapore. The foreign students from China may find it easier to adapt to the Singapore culture as compared to Australia whereby they can communicate in Mandarin.
6.2 Weaknesses
6.2.1 Cost ineffectiveness
By transferring lecturers from our home country (Australia) to the new campus in Singapore, there are several factors that we have to take into considerations. Transferring our lecturers to Singapore will inevitably increase in our overhead costs which includes compensation packages designed around the four common elements: base salary, benefits, allowances and taxes. The lecturers may also be unwilling to accept the oversea assignment due to the consideration of spouses and dependents. They might not be accustomed to the living standards in Singapore. However, different ways of management between the Australian and local employees may lead to ineffectiveness or conflict.
6.2.2 Preferences of students to study in Australia
By setting up a campus that provides an Australia law degree will benefit students who would want to pursue a foreign degree. However, due to the culture difference and different exposure, students in Singapore may choose to study in Australia even though there is a campus there. Moreover, Singapore students may want to experience the university life in Australia. However, students may choose to study in local university or other UK or US institute over Australia institutes. This will affect the intake of students for Dorkson University.
7. Option Chosen
In view of the current situation and with the environmental analysis conducted, Dorkson decides to set up a wholly owned subsidiary in Singapore to reach out to a broader customer base.
7.1 Reasons
There are three reasons for wanting to set up a subsidiary in Singapore. The first reason being there is substantial advantage to be gained by being the first to set up an educational institution in Singapore instead of collaborating with other institutions. An example of a firm that has reaped substantial advantage is SingTel which is the first mover of a new era of data services- IDEAS and there is definitely substantial profits to be gain from the launch.
Government’s push for knowledge sharing justifies the second reason why we choose to set up a wholly owned subsidiary. By entering into the Singapore educaton market, Dorkson will be able to exchange their current knowledge of the Australian education system with the Singapore institutes. In this way, both countries will stand to gain. The willingness to share knowledge with others has been viewed as an asset as it is an excellent way of growing new opportunities.
The third reason is the preference of Australia as a location amongst Singapore students to further their studies. Last calendar year; Singapore was the largest single source of overseas students at Australian educational institutions, providing more than 20,900 students at campuses both on-and off-shore ().
By setting up the subsidiary in Singapore will have a positive impact on the subsidiary, as there is substantial profits to be gained from the student intakes due to the preference by Singapore students to take Australian degrees
8. Action Plan
8.1 Objective of opening a new campus in Singapore
The objective for opening a new campus in Singapore is to take advantage of the growing market for higher education in Asia. As said by the Trade Minister George Yeo " The demand for higher education among the growing middle classes in Asia will increase faster than the gross domestic product (GDP) growth rate, much of which will have to be provided by the private sector because the state sector cannot grow fast enough." ()
The Action Plan objective:
An action plan is formulated from the objectives to address the concerns that may affect the education industry and organization overall progress in the future.
Our institute is providing an external degree courses to the local students in Singapore. Thus, we will send lecturer from our home country (Australia) to tutor the students in Singapore. The pre-requisites for lecturers appointed to teach the course would be ample experience and familiarity with the related course(s) for many years. Due to the years of knowledge and understanding of the systems in Australia, they will be able to deliver the course and share the knowledge more effectively to the students in Singapore.
Reflecting that there is a large number of Singaporeans who have studied in Australia, shows that there is a broad understanding of the range, quality and competitiveness of Australia education institutions. However, Australia institutions need to work hard in building their reputation, bearing in mind that Singapore students still look to British or American universities for furthering their education.
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Thus in order to expand our market in Singapore, our reputation can be built extensively through various forms of media such as the TV, newspaper, broadcasting as well as pamphlets. Our institute will also participate actively in the career fairs and educational fairs in Singapore to create awareness.
We can recruit students through the various educational fairs or media in Singapore. Alternatively we will also cooperate with organization by providing seminars or short course that are suitable for the employees in the organizations. We will also encourage employees from various organization to sign up for relevant courses that will be beneficial to them in their work. After the completion of our new campus, we will organize "open house" to attract students.
Our institute could work closely with the government to ensure that the types of education standards and examination systems are in line with government’s regulations. We will also use other institutes as benchmark and make sure that our educational standards are on par with them. To gain a competitive advantage against other institutes, we will also provide a range of comprehensive courses. Assignment or research project that allow students to have a feel of how theory are related to real organization practices will be incorporated in the curriculum.
9. Conclusion
With the signing of the Free Trade Agreement, both Singapore and Australia stand to benefit mutually in many aspects. Business should bear in mind that environmental changes occur constantly, therefore making the business environment unpredictable and unstable, thus increasing the risks for international business. Therefore, business must make it a point to constantly monitor the changes in environment so that business would be able to react and make appropriate changes in the business strategies.
References
Newspaper Article
Eugene Low, 2002, “Panel Targets Work Force of 30% Graduates”, The Business Times Singapore, 12th November 2002
Louise Branson, 2002, “DPM Tan Backs NUS’ Multiple Campus Ideas”, The Straits Times (Singapore), 1st May 2002
Natalie Soh, 2001, “Worker Urged to Upgrade Skills”, The Straits Times (Singapore), 16th April 2001
Rachel Ong, 2001, “Singapore Needs 4th University”, The Business Times Singapore, 28th July 2001
Sandra Davie, 2001, “Universities Aim to Take 5000 More Each Year”, The Straits Times (Singapore), 23rd April 2001
Internet Article
Asia1.com, 17th January 2003, Singapore eyes big bucks from Asia’s higher education market, downloaded on 23rd March 2003
Asn.au, December 2002, Australia-Singapore Free Trade Agreement, downloaded on 16th March 2003
http://www.acci.asn.au/text_files/issues_papers/Trade/TDE35.pdf
Dfat.gov.au, September 2001, The Costs and Benefits of a Free Trade Agreement with Singapore, downloaded on 23rd March 2003
Dfat.gov.au, (1996-2003), Singapore-Australia Free Trade Agreement (SAFTA), downloaded on 18th March 2003
Trademinister.gov.au, 17th February 2003, Joint Media Release-Signing of the Singapore-Australia Free Trade Agreement, downloaded on 18th March 2003
Trademinister.gov.au, 1st November 2002, Singapore-Australia Free Trade Agreement to Create broad Opportunities for Business, downloaded on 18th March 2003
Washingtontimes.com, 17th February 2003, Singapore, Australia ink free-trade pact, downloaded on 5th March 2003
http://www.washingtontimes.com/upi-breaking/20030217-034212-3683r.htm
SINGAPORE-AUSTRALIA FREE TRADE AGREEMENT
Summary of Key Outcomes for Australia
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Elimination of all tariffs from entry into force, including on Australian beer and stout
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Comprehensive and transparent 'negative listing' of services commitments
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Restrictions on the number of wholesale banking licenses to be eased over time
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Banks to be allowed to transfer information, including electronic data, to Australia
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Conditions eased on establishment of joint ventures in involving Australian law firms
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Number of Australian law degrees recognised in Singapore doubled from 4 to8
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Removal/easing of residency requirements for Australian professionals
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Mutual recognition agreements (MRAs) between architects and engineers under way
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National treatment and market access commitments for Australian education providers
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Singapore government overseas scholarships will be tenable at Australian universities
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The environmental services sector will be largely open to Australian businesses
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Open market access and national treatment for a range of other service sectors
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Transparency of investment restrictions in Singapore's government-linked companies
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Investors protected against expropriation; compensation for expropriation or other loss
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Telecoms regulators must operate in transparent manner and properly explain decisions
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Telcos have right of appeal to an independent authority
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Telecom interconnection provided on non-discriminatory, timely, cost-oriented terms
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Telecoms regulators to adopt or maintain effective sanctions to enforce decisions
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Agreement to facilitate consultation with telecoms industry participants
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Australia firms get national treatment in procurement by 47 Singapore agencies
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Protection of intellectual property supplied in government tender processes.
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Short term entry for Australian business people extended from 1 month to 3 months;
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Long-term business residents in Singapore granted total stay up to at least 14 years.
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Spouses of business people can work as managers, specialists, office administrators
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Commitment to address anti-competitive business practices
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Consultation upon request on anti-competitive practices of particular concern.
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Competitive neutrality disciplines to apply to government-owned businesses
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Cooperation on eliminating trade in goods infringing intellectual property rights
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Measures to prevent the export of goods infringing copyright or trade marks
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No customs duties on bilateral electronic transmissions
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Agreement to facilitate paperless trading in order to reduce business transaction costs
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Promotion of confidence in bilateral e-commerce, e.g in electronic signatures
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Annexes under negotiation on food standards and horticultural products.
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Cooperation on investigation and prevention of infringements of customs law
