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Observations from a Trade Commissioner - Mexico

19 Sep 2017

Chris Rodwell, Trade Commissioner, Austrade Mexico provides his observations and insights of education opportunities, challenges, competitor activity and Austrade education initiatives in market.

  1. What are the key opportunities for Australian education organisations in your market? Please include reference to any relevant trade and investment drivers as well.
  2. Mexico offers two distinct opportunities for Australian education providers.

    First, given it has 35 million students it represents a significant market for international student recruitment. While many Mexican students have traditionally looked to the US, the current environment gives Australian providers the opportunity to build market share. Australia is underrepresented in the market compared to our key competitors and should seek to address the imbalance.

    The second opportunity is perhaps the more significant one – borderless education. There is a substantial productivity challenge in Mexico in sectors where Australia offers extraordinary expertise and where Australian companies have made sizeable investments (Australian investment in Mexico is more than $5 billion), such as energy, financial services, agriculture, advanced manufacturing, mining, tourism and the digital economy. Australian education and training providers should look to leverage that position. A co-ordinated response from some of our institutions could feasibly define Mexico’s productivity as it looks to leverage an economic reform program that has been rated by the OECD as the most comprehensive of any member.

  3. What are the main challenges for Australian education organisations when operating in your market?
  4. Local cost and pricing structures are very different – Australian education and training providers need to adapt to the market. Further, there are distinct cultural differences in how business is conducted.

    Australian providers need to spend significant time in the market developing relationships and to identify potential partners. This requires a level of patience and persistence that is sometimes not well understood. To this end, my observation is that, other than a handful of institutions, most Australian institutions wanting to develop a larger footprint in the market need to spend more time in Mexico.

    The argument is straightforward. Mexico is an upper-middle income economy, with 128 million people and will enter the top 10 global economies by 2030. If it was situated in Asia most major Australian education providers would have a significant presence in the country. Of course, distance and the lack of a direct flight is a consideration in respect of student recruitment, but this is not insurmountable.

  5. What are Australia’s competitors doing differently in your market?
  6. In short, Australia’s competitors are simply more active in the market. That isn’t simply a function of the regional ties that exist with countries such as the US and Canada. This extends to Europe where the UK, France, the Netherlands, Spain, Germany and others have all committed to very active campaigns to recruit students and to collaborate on joint research and in the delivery of education – at university and VET level – locally. These efforts are executed across the full range of sectors in collaboration with global companies such as VW, Kia, GE, Bombardier, Boeing, BP and so on. They are also allocating the funds in support of such initiatives to develop relationships over the long term.

    That’s not to say some Australian institutions haven’t made big steps forward in their commitment to the market. An Australian private education and training peak body, for instance, has recently worked very closely with Austrade in examining the market, especially in relation to opportunities in the energy sector. However, the overall level of engagement lags our competitors, despite Australia’s research and productivity agenda so clearly aligning with Mexico’s.

  7. What are the key education initiatives in your market plan?
  8. While student recruitment remains a key plank of our approach to the market, our focus on borderless education activities has recently been enhanced. This particularly relates to a project to examine workforce development requirements of the energy sector, following the historic partnership between BHP and the state-owned Mexican petroleum company, Pemex. We know there is a very large skills gap (estimated at around 130,000 people) that needs to be remedied over the coming years if the sector is to achieve optimum productivity.

    In addition, we are also examining opportunities in the mining sector. Mexico is a very diverse economy. It has a thriving advanced manufacturing sector (responsible for 70% of all exports in that sector for Latin America), a vibrant financial services and technology community, a globally significant agriculture sector, and a large and complex health sector. Further, its tourism sector is forecast to employ 4.8 million people by 2025.

    While Austrade is limited in its focus in order to lock-in benefits related to a broader trade and investment agenda, the truth is there is a smorgasbord of opportunities available in this major emerging economy.