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Mark Lucas, iae Global, Australia

Mark Lucas is Group Director of Business Development and Administration at education agency chain, iae Global. He talks to The PIE about plans for growth following new investment into the company.

The PIE: What’s it like having new owners and what was the motivation for seeking a new injection of funds?

"We see some markets as having a golden period coming up, places like Vietnam, Myanmar, Cambodia"

ML: The motivation was there’s been consolidation in the institutional side of this industry for the last 20 years but very little in the agency side and we just saw a gap there, and to consolidate properly you need to spend money on systems and you need to really have a centralised business model rather than just a collection of offices around the world so we thought it was a good time to do that.

The PIE: How large was the iae network prior to the merger with New Horizon Capital?

ML: We were at that position where we hit a size of around 20,000 students a year and we wanted to expand to some other markets and we, like every business, wanted capital to do that properly, because you can take three, five years and do it yourself or you can shortcut it and get an investor and grow the market more quickly because we see some markets as having a golden period coming up, places like Vietnam, Myanmar, Cambodia.

“We changed our model in India from a franchise partnership to a fully owned company”

The PIE: And have you put that in process, have you got any acquisitions under your belt?

ML: We’ve set Japan up and running, we changed our model in India from a franchise partnership to a fully owned company, so we invested in India and we set up our own office, which is 100% owned by us and we are now looking at the best model for Vietnam, whether that’s an acquisition, a JV partnership or a greenfields, we are just doing some research on that market.

The PIE: How do you see the business space changing for agencies, do you feel like you have to be doing things differently or do more to stay close to the student client base?

ML: I think students are far more demanding because information was power in the past for agents before the internet, we had the contracts, we knew about the institutions, we had the brochures, students didn’t have access to that information so there was a power imbalance where agents controlled the information.

That’s not the case now, everything’s online, in multi-languages, so the issue now is service and support. Also now, the choice is just massive. How many institutions are there around the world that are so similar, which is the best fit? What’s the student outcome? Where do they want to go? What’s their purpose? The role of the agent is to help define this.

The PIE: So are you evolving your portfolio around that mission?

ML: Definitely, we’ve moved in the last 10 years from working with predominantly language and some pathway providers in most of the markets we’re in, especially in Australia, to working with universities and pathway. English is the enabling course now rather than the primary course for a lot of our countries.

The PIE: And I imagine you have stated ambitions, I don’t know if they are publicaly stated.. about the student market you’d like to be able to service.

ML: We’d like to double.

The PIE: And what do you think about Australia’s ambition to provide more clarity around aagent quality, I imagine it’s something you might welcome.

ML: I think its welcome but I personally don’t think it is something that can be legislated or mandated by government. I think it has to be industry-led and I think it has to be led by institutions and agencies in partnership, very similar to AIRC in the US where you have a certification process. I think in the end it has already happened. Quality institutions tend to work with quality agencies and vice versa.

“What’s the student outcome? Where do they want to go? What’s their purpose? The role of the agent is to help define this”

I think there has always been a natural pairing off in partnerships, the bottom end has always worked with bottom end. Unfortunately the bottom end manages to damage it for everyone else. I think there needs to be some standards around behaviour, it’s very hard to do it in certain countries just because of the nature of how those countries operate their legal system etc. but you can do with the institutions in the country. I hope it happens, I’ve actually been a strong supporter of an industry based certification process for Agents.

The PIE: So given the global overview you have, how do you see the ups and downs of student demand for various countries, who’s winning and who’s losing at the moment?

ML: At the moment outside the EU, the UK is losing, Australia is coming back and that’s being driven by a slight easing in the visa regime but mainly by currency. US is still a strong market but it will be interesting at what tipping point the currency becomes an issue. Canada seems to be stable after a bit of a downturn for a few years and then the other markets are really very very small. I actually think one of the growth markets will be Europe, I think The Netherlands and Sweden and Germany to some extent are going to take a bigger percentage of some markets.

“I think The Netherlands and Sweden and Germany to some extent are going to take a bigger percentage of some markets”

The PIE: Interesting. Is the majority of your student volume still in Korea at the moment?

ML: No, realistically if you look at where most of our students are being recruited, it’s our five Australian offices that are the biggest actual recruiters overall, second to that would be Korea and then China.

The PIE: Do you think that being onshore gives you a service and welfare edge?

ML: We call it after-care service, so it is something that any IAE student from any of our offices can walk into one of our offices and get. We look after those students, we try and maintain a relationship wherever possible.

The PEI: Do you feel like you do a better job of that than the universities?

ML: It’s a different job, I think we probably deal with more human issues, because at universities, if you’ve got 50,000 students, it’s kind of hard to have that personal relationship. Our success is based on servicing the needs of students and that can be anything from ‘I lost my passport, what do I do’ and we have helplines and 24 hour numbers for them to call and things like that.

The PIE: Finally, Australia is defining a big strategy to grow numbers, what do you think about that?

ML: I think numbers for numbers sake is a dangerous thing, I think Australia needs to start focusing on quality, student outcomes and student employability, here and back in their own country. Our fees are incredibly expensive now for university and kids are spending $120,000 plus for a degree and at some stage they are going to say, well if I go back to my own country or stay here, is there a return on this? I know I would be, so I think you have to have the quality.

“Australia needs to start focusing on quality, student outcomes and student employability, here and back in their own country”

QS rankings are showing a lot of Australian universities moving up quite high into the rankings; if you’re going to have quality then you have to not worry about the quantity so much. Sure you want to grow the business but we’re running at something like 7-8 times the average percentage of international students to the US per institution, at what point do we go 50/50, do we end up 60/40 International? When does this start to alienate the domestic market? And when do domestic markets start going, it’s cheaper for me to study in Europe, I’ll go.

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