Which sector of the economy do you think is being hardest hit by the novel coronavirus (COVID-19), construction, retail, transport or catering?
Well, you are all wrong, and need to do some more homework. The answer is – education.
Many people probably don’t even think of education as part of the economy. The groves of academe are surely above such sordid considerations as money and finance?
Not a bit of it. Money is the lifeblood of education – endowments from wealthy alumni, catering and accommodation fees, conference facilities, and the biggest of the lot – attracting lots of fee-paying students every year.
The trouble for the education sector is that it is uniquely vulnerable to the coronavirus (COVID-19) pandemic.
For hundreds of years its business model has been to bring thousands of people together from across the country, and around the world, to sit together in rooms for three years and talk to each other.
As a result, nearly all its income streams are under attack at the same time.
Current students have been sent home, and many courses have moved online. If lockdowns around the world continue, new students are going to be hard to find in the autumn, and even harder to get on campus.
Plus, conferences are not happening, and all those wealthy alumni are nowhere near as wealthy as they thought they were.
This hits Western English-speaking universities particularly hard. They tend to charge even domestic students large tuition fees, and make money out of on-site catering and accommodation on top of that.
They also tend to charge foreign students a lot more, making them a huge source of income for many universities. In the UK, for example, undergraduate students from outside the UK and the EU can be charged annual tuition fees as high as £58 600 instead of the standard £9 000.
So, while globalisation for many means importing cheaper manufactured goods from around the world, for developed economies one of their greatest recent economic successes has been attracting students from overseas.
The rise of the middle classes around the world has been a godsend for Western universities, says Simon Marginson, professor of higher education at the University of Oxford.
“The global middle classes have grown by leaps and bounds in recent decades, and anyone in that group can send their children abroad for education,” he says.
They have been doing just that, not least because many developing countries don’t have the same quality of tertiary education as developed ones. This means that students who study abroad emerge with a prestigious degree, a second language, and lots of contacts and friends. It has proved a price worth paying for millions.
The big winners in this regard have been the US, the UK and Australia. All with excellent education systems that teach in English, they can attract fee paying students from around the world.
In the US, 360 000 Chinese students started the last academic year. The influx of foreign students is estimated to be worth as much as $45bn (£37bn) a year to the American economy. (BBC)
