Education one of Australia’s great growth opportunities but age is a barrier

The old, the young and the foreign. It sounds like a pretty broad market and, vitally, those demographics represent the key sectors in an industry poised to be one of Australia’s growth champions.

The industry is education and it is one of Deloitte’s “Growth 25", sectoral hotspots we have identified as having the biggest potential to lift Australia’s growth trajectory over the next 20 years.

Demographic shifts will help uncover new growth pockets in education. Whether it is privately educating our growing number of secondary school students or reskilling an ageing workforce looking to extend and improve their earning potential, the education sector is well placed in the DG25.

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The Australian education sector will benefit significantly from both a boost in the number of school age children and the increased demand from older Australians looking to develop or refresh their skills to remain active participants in the workforce. 

Private schooling

Births have risen to around 310,000 per year, up from 250,000 a decade ago. This is pointing to around a 25 per cent rise in the number of Australian secondary school students in the 2020s. Thirty years ago one in every four students were educated in non-government schools, this ratio is now more than one in three.

Education is already Australia’s number one service export worth around $17 billion annually. The good news is this is set to continue but the education sector will be further boosted by a growing demand for kindergarten to year 12 schooling. Given the underlying trend towards private (non-government) schooling in Australia, this is particularly positive for the private sector.

Asian demand

The growth isn’t just a product of increased domestic demand: Asian middle class parents have always placed a high value on western education for their children but more of them now have the wealth necessary to access this. The private school sector provides a clear pathway to further education in Australia’s universities. If the private school sector can leverage this successfully, it could be poised to be one of the key growth engines for the Australian economy.

Reskilling an ageing workforce

With growing numbers of older Australians extending their careers by choosing a different role or a new industry, opportunities will arise for education and training providers to assist with developing the new skills required to make the best use of this pool of experienced and productive workers.

Some office workers already work well into their 60s and 70s but that is less true of more manual workers such as tradespeople and soldiers. Federal Government policy aims to substantially lift the share of the population with tertiary qualifications. That will directly add to opportunities for the education sector and also boost demand from older workers for training in new skills.

At the same time, workers will need to stay abreast of increasingly rapid technological change as digital technologies change not only the way we live but also the way we work.

The Challenge

There is however one glaring obstacle in the way of education realising its potential as one Australia’s major growth sectors: we need to address the entrenched idea that education is primarily for people aged under 25 and tweak policies to ensure the support such as student loans are available to older people.

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The full release of Positioning for Prosperity? Catching the next wave, the third in Deloitte’s Building the Lucky Country series, analyses growth prospects across all major parts of Australia’s economy.  Collectively, these sectors, the ‘Deloitte Growth 25’ (DG25), represent a group of compelling growth opportunities for Australia.

Monish Paul - Deloitte Education leader.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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