International students aren’t the only ones benefiting from studying abroad. The countries welcoming these foreign learners are also gaining a lot, especially in their local economy. In this article, we take a closer look at how international students help the local economy of their host countries.
The international student market
International education is a billion-dollar industry and the market continues to grow. By 2030, the sector is expected to reach more than eight million enrolments. With a 7.4% compound annual growth rate (CAGR), it’s set to reach US $433 billion in the same period.
Top study-abroad destinations are already feeling the impacts of these numbers, underscoring why international students are good for their economy. In the 2021–2022 academic year, international students boosted the UK economy by £41.9 billion. Meanwhile, 2022, international education added AU $29 billion to the Australian economy. After that academic year, over one million international students contributed US $40 billion to the US economy.
Benefits of international students
The benefits of international students affect various aspects of a country’s economic status and prospects. Here’s a quick breakdown of the ways international students help the local economy.
Economic revenue
A cohort of international students can bring a lot of revenue into the country they’re studying in. According to the International Migration Outlook 2022, direct export revenues in nominal terms from international students in OECD (Organization for Economic Cooperation and Development) countries reached more than €115 billion in 2019. Their contributions amount from spending on tuition, food accommodation, local transport and other services.
The report also highlighted the importance of education-related services as export items, particularly in English-speaking countries. For instance, in Australia and New Zealand, these exports accounted for 8% and 5% of total exports respectively.
Professional talent
A large cohort of international students take up higher education programs. As such, they graduate with degrees and specialisations that prove valuable in their host country’s job markets. This expands the pool of talent, paving the way for better professional industries.
Many international students who go on to remain in their host country start their own businesses. These entrepreneurial projects often boom, attracting more revenue to the economy. According to the National Foundation for American Policy, over 25% of 583 US companies valued at a billion dollars or more in 2022 were founded by an international student. Meanwhile, in the UK, 57% of British university startups are founded by international graduates and half of the UK’s fastest-growing businesses have a foreign-born founder.
Job creation
Along with their fiscal contributions, the businesses that international students build often create tons of jobs that become available to local professionals. Data from 2021–2022 revealed that the total number of jobs supported (335,423) in the US by the financial contributions of international students is up 9.5% compared to the prior academic year. Moreover, for every three international students in the US in the same period, one US job was created.
The importance of international students in the local economy
International students offer several advantages to their host country. Destinations that are prepared to welcome them and nurture their skills can maximise these benefits and further improve their local economies.
For more about international education, keep an eye out on our blog for interesting insights. To learn how you can help international students achieve success in their host countries, get in touch with our business development experts.
