Back when I was studying economic development theory, the idea that "many are called, few are chosen" was part of the debate on whether South Korea would break through the middle income trap. That debate has ended: Korea is a shining example of success--and higher income--in no small measure from the educational drive and prowess of its people.
Fast forward to Indochina. In a recent article featured in Barron's, what is called "The New China" was profiled as an emerging geographic cluster including Vietnam, Cambodia, Laos, Myanmar and Thailand. This region, with a collective economic output of $640 billion in 2014, 20% annual export growth over the past four years, increasing FDI from Japan and Korea, competitive low wages and a workforce ten years younger than the 30-35 age group found in China, is no doubt on the move. But a quick analysis of comparative education trends favors one country in particular, and that is Vietnam.
Consider a few education statistics that are reminiscent of Korea a generation ago:
- For its first measure in the global brain race, Vietnamese 15 and 16 year olds scored 17th in the world on PISA aptitude tests and ahead of both the US and UK in math.
- The country achieved universal primary education before the year 2000 and well beyond countries at similar levels of economic growth, achieving a 94% literacy rate.
- A large "shadow education" or non-formal education and tutoring industry has emerged with a singular focus on attaining a higher education degree.
- Increased household affordability has spurred large numbers of Vietnamese to study internationally, particularly in the US and Australia.
- A vibrant array of private and venture-backed education companies such as DeltaViet, HocMoi, Vinabook, Kinderworld and start-up Rockit Online are providing education solutions and meeting student demand from pre-K to workforce training.
Compared with its neighbors, Vietnam's educational achievements are even more striking.
First, Vietnam has been far ahead of its neighbors in primary school completion, dating back to 2000 when over 97.8 per cent of children completed at level. As Figure 1 indicates, other countries in the immediate region (such as Cambodia) have made dramatic gains through 2012 but are at least a decade behind Vietnam in terms of attainment.
It is no surprise that Vietnamese students have rapidly moved toward higher levels of academic achievement after primary school. The result has put immense pressure on expectations for world-class educational quality and, when that is not available, the willingness of households to invest in their children's future outside of formal schooling, such as in cram schools, English lessons and study abroad.
Figure 1: Primary School Completion as % Total Relevant School Population by Country
Second, the correlation between standardized test scores and falling birth rates in East Asia among powerhouses such as Korea is also relevant to Vietnam. Vietnamese birth rates have dropped from 3.6 per household in 1990 to 1.8 per household by 2012, a decline of 50 per cent over a relatively short time. Thailand has reduced 2012 birth rates to an even lower 1.4 per household by 2012 but from an already low 2.1 in 1990. What is the impact? Fewer children to educate equates to more potential support per child--financial, pedagogic or otherwise--and increased spending per child overall. This is what educational companies and schools are reaching toward today.
Figure 2: Number of Births Per Household by Country
Third, Vietnam has consistently registered among the highest growth in labor productivity in Asia over the past two decades, averaging 5.0% per year between 1990 and 2000 and 4.8 per cent from 2000 to 2011, according to APO data (which measures productivity using annual GDP growth at constant basic prices per hour, see Figure 3).
This level of sustained labor productivity is directly related to educational levels. Only China/Korea (1990-2000) and China/India (2000-2011) exceed average Vietnamese growth levels over this time period.
Figure 3: Labor Productivity Growth: GDP at constant prices per hour, 2005 PPP data
Fourth, Vietnam's higher education or tertiary enrollments have risen from less than 700,000 in 2001 to over 2.2 million in 2013, with a significant amount of runway ahead. This enrollment level is now on par with Thailand (Figure 4), whose tertiary enrollments peaked in 2007 despite being almost 3 times as wealthy on a PPP per capita basis than Vietnam (US$14,393 v US$5,294, respectively, World Bank 2013).
Enrollments in Myanmar and particularly Laos and Cambodia have grown incrementally from a small base but remain a fraction of Vietnam's participation at the college level. To cite one example, for all the noise around the opening of Myanmar, the country's students numbered approximately 666,000 in 2013 and any future "take off" phase is difficult to predict and probably many years away.
Figure 4: Tertiary Enrollments by Country, 2001-2013
Figure 5: Offshore International Student Enrollments by Country, 1999-2012
Fifth, the movement of Vietnamese students abroad at the university degree level reached 53,802 in 2012, an increase of 47 per cent from 2008. This trend is a natural consequence of high academic achievement amidst limited university capacity, the result being a flight to international quality. A further catalyst is higher affordability and increased savings for education.
Figure 5 charts Vietnam's dramatic rise in study abroad from 9,851 students in 2001 and, beginning in 2007, far surpassing Thailand and its other neighbors. By 2013 Vietnamese students in the US had reached 16,579, the eighth largest contributing source for international students, and over 11,500 students were enrolled in Australia.
Finally, TNE or transnational education programs have increased significantly since 2007, in large part due to a more permissive government approval environment (Figure 6). Based on the latest available data, there are 193 officially approved foreign higher education programs in Vietnam, of which 64 per cent are at undergraduate level.
Half of all TNE programs were approved between 2010 and 2012, another sign that Vietnam's advances in education will only deepen in the coming years.
Figure 6: Approval of Foreign Education Programs in Vietnam (By Number), 1998-2012