I was invited by Professor Lin Hsiou-Wei, Distinguished Professor and Dean of Management College, Tunghai University, Taiwan to visit his university in late July 2016. Professor Lin also invited me to give a public lecture entitled, “Malaysian higher education: past, present and  likely future.” This is the first of three articles that I had written and first published in Han Chiang News in 2016 based on the research I had done to prepare for that public lecture in Taiwan which I delivered in Mandarin. It was the first time I was given the opportunity to give a talk  delivered in Mandarin where I was more comfortable doing so in English! My former colleague, Ms. Kristina Khoo thought that I could make my points better by presenting the key arguments in videos and being the CEO and Principal of the College, I had to put my money where my mouth was and agreed to perform in front of the camera and well directed by Ms Khoo.

By Dr Chow Yong Neng

In April 2015, a bombshell was released by the Ministry of Education in Taiwan. Up to 52 of its existing 167 tertiary institutions will have to either close or merge with others within 10 years.

Taiwan and Malaysia have very similar population of 23.4 million and 30.5 million respectively. However Taiwan has more than twice of Malaysia’s per capita GDP at US$22,979 compared to Malaysia’s US$9,766 and its 167 tertiary institutions are considered as 52 too many.

Malaysia currently has 20 public universities, 37 polytechnics, 94 community colleges, 43 other state-funded training centres, 99 private universities and university colleges and 402 private colleges. These add up to a total of 695 tertiary institutions in Malaysia*.

What about Malaysia which has a total of 695 tertiary institutions? Can our economic and demographic factors support this more than 4-fold in the number of colleges and universities in Malaysia compared to Taiwan’s figure? In other words, if Taiwan needs to reduce her universities by more than 30 per cent over a ten-year period would Malaysia, with a lower per capita GDP need to follow suit?

Taiwan has a tertiary education enrollment rate (i.e. how many percent of its youth receive tertiary education) of close to 99 per cent compared to Malaysia’s 37 per cent. Does that mean Malaysia still has plenty of scope for its tertiary education sector to secure the enrollment of students and fill its collective capacities?

Let us look at the best example available as a “base model”, that is the United States of America with a population of around 321 million, per capita GDP of US$55,837 and 4,726 accredited tertiary institutions** (please refer to Table 1). We can compare both Taiwan’s and Malaysia’s tertiary education sector using the data of the USA to estimate the “maximum sustainable number of tertiary institutions” by asking just three questions.

Table 1: Comparison of 3 nations’ tertiary education: population, per capita GDP & number of tertiary institutions
Country USA Taiwan Malaysia
Population (millions) 321 23.38 30.75
Per capita GDP (US$) $55,837 $21,979 $9,766
No. of accredited tertiary institutions 4,726 167 695
Tertiary student population (millions) 21 1.34 1.42
Average population per institution 67,922 140,000 44,245
Average number of students per institution 4,444 8,024 2,043

Question 1:

Based solely on USA’s population and the number of US tertiary institutions, what will be the maximum number of institutions that Taiwan and Malaysia can support?

We can easily answer this question by dividing the population figure of Taiwan or Malaysia by that of the US  then multiply the results by 4,726 (the number of accredited tertiary institutions in the USA). Essentially a proportional comparison which is presented in Table 2.

Table 2: Comparison of Taiwan’s & Malaysia’s sustainable number of tertiary institutions based on the USA’s model using population data
Country USA Taiwan Malaysia
Population (millions) 321 23.38 30.75
Maximum sustainable number of institutions 4,726 344 453

It is clear that, based on population alone, Taiwan can easily have twice her present number of tertiary institutions. However the same cannot be said about Malaysia. At 695 Malaysia is already having an excess of 242 tertiary institutions.

Question 2:

Based solely on USA’s per capita GDP and the number of US tertiary institutions, what will be the maximum number of institutions that Taiwan and Malaysia can support?

As in Question 1, we can use the same logic to do a proportional comparison of the data for both Taiwan and Malaysia using the USA’s as the “base figures” as presented in Table 3.

Table 3: Comparison of Taiwan’s & Malaysia’s sustainable number of tertiary institutions based on the USA’s model using per capital GDP data
Country USA Taiwan Malaysia
Per capita GDP (US$) $55,837 $21,979 $9,766
Maximum sustainable number of institutions 4,726 1,860 827

If we consider per capita GDP in isolation, the economy of Taiwan could easily sustain over 11-folds the number of tertiary institutions that she presently has whereas Malaysia will still be able to “top up” the present 695 institutions by another 132.

Question 3:

What will be the maximum sustainable number of tertiary institutions for Taiwan & Malaysia if we factor in the combined effect of per capita GDP and population as compared to the USA model?

We really need to combine both the economic and demographic figures in our proportional comparison to determine the maximum sustainable number of tertiary institutions for each country. To come out with the comparison, we divide each figure (be it population or per capita GDP) with the corresponding USA’s figure, multiply the result of both economic and demographic comparison together with the USA’s current number of tertiary institutions. The result of this comparison is presented in Table 4.

Table 4: Comparison of Taiwan’s & Malaysia’s sustainable number of tertiary institutions based on the USA’s model using both population & per capita GDP data.
Country USA Taiwan Malaysia
Population (millions) 321 23.38 30.75
per capita GDP (US$) $55,837 $21,979 $9,766
Maximum sustainable number of institutions 4,726 135 79

The combination of both economic and demographic figures of the respective countries reveal something very staggering. Both Taiwan and Malaysia are already having too many tertiary institutions and the Taiwanese government has rightly put up a policy in April 2015 to reduce the number of tertiary institutions in the country in view of dwindling college-going population and the country’s already close to 99% tertiary enrollment rate.

When one looks at the maximum sustainable number of tertiary institutions for Malaysia of 79, one will not be blamed for suspecting some mistakes were committed in its calculation. But this figure has been estimated based on available data. With 616 “excess” number of tertiary institutions, what can Malaysia do to address the problem? Is it possible at all to reduce the number of tertiary institutions in Malaysia by close to 90 per cent?

Will increase in tertiary enrollment rate from the current 37 per cent to 94 per cent (USA’s current rate) be sufficient to solve the problem? Let us just do another proportional comparison:

[94% / 37%] * 79 institutions = 201 institutions

Thus even if we have 94 per cent tertiary enrollment rate, we will still need to close / merge around 500 tertiary institutions in Malaysia.

In fact, even if we miraculously increase Malaysia’s per capita GDP by 50 per cent to say US$15,000 and we have 94 per cent tertiary enrollment rate, Malaysia can only sustain:

[94%/37%] * [US$15,000 / US$9,766] * 79 institutions = 308 institutions

We will still be needing to merge or close down 387 tertiary institutions in Malaysia!

Solutions

With not much scope to raise the population of 18 year-old by a significant figure annually for the foreseeable future, Malaysia will have to follow in Taiwan’s footsteps. The key difference between Malaysia and Taiwan is that the bulk of the struggling institutions are privately owned and funded, there is no such thing as the withdrawal of grants and subsidies to entice these owners to consider merging or closing.

The fact remains that this issue has been overshadowing the entire private tertiary education industry since its reaching a peak of around 730 private tertiary institutions around 2002. The past 14 years did see some form of consolidation in the private tertiary education industry where the number of private institutions have dwindled down by close to 230 to the present 501 institutions (data as provided by the Ministry of Higher Education for May 2016).

The billion Ringgit question is whether this figure could be further reduced by another 380 to 400 to provide the industry with sustainability.

One thing is perfectly clear, “Consolidation is certain, resistance is futile!”

One may ask, “When shall we expect a bombshell be released by the power that be in Malaysia?” To this I shall answer, “Your guess is as good as mine!”


Footnotes:
*More accurate estimations were available along with more up-to-date data being acquired by the author since the publication of this article in August 2015 and the revised analysis though did not affect the conclusion but nevertheless the author feels that it should be presented to the readers.

The number of higher education institutions in Malaysia should be computed to include only those institutions which offer diploma and higher academic qualifications and hence shall exclude community colleges. Based on this principle, the number of tertiary institutions is revised as follows: Public universities (20), Polytechnics (37), State-funded vocational institutions with capability to offer diploma and advanced diploma (20), private universities & university colleges (96), private colleges (401), making a total of 574 (and not 695) higher education institutions. 

In addition to the 94 state funded public community colleges, there are 813 private accredited training institutions, 80 public vocational colleges and 320 other training institutions funded by various ministries making a total of 1307 institutions in Malaysia offering vocational skill training programmes (below diploma level), catering mainly to school leavers.

**Based on data compiled from US’s National Center of Education Statistics, the total number of accredited colleges and universities in the USA (2013 -2014 survey) was 4,599 and not 4726 as reported earlier. The population of the USA has also been revised upward to 324 million to reflect the latest (2016) figure. Likewise the GDP of Taiwan has been revised based on the latest figure obtained.

Hence the following tables with the revised data are being presented to our readers.

Table 1: Comparison of 3 nations’ tertiary education: population, per capita GDP & number of tertiary institutions (revised)
Country USA Taiwan Malaysia
Population (millions) 324 23.38 30.75
Per capita GDP (US$) $55,837 $22,294 $9,766
No. of accredited tertiary institutions 4,599 167 574
Tertiary student population (millions) 21 1.34 1.42
Average population per institution 70,450 140,000 53,5711
No. of student per institution 4,566 8,024 2,474
Table 2: Comparison of Taiwan’s & Malaysia’s sustainable number of tertiary institutions based on the USA’s model using population data (revised)
Country USA Taiwan Malaysia
Population (millions) 324 23.38 30.75
Maximum sustainable number of institutions 4,599 332 436
Table 3: Comparison of Taiwan’s & Malaysia’s sustainable number of tertiary institutions based on the USA’s model using per capita GDP data (revised)
Country USA Taiwan Malaysia
Per capita GDP (US$) $55,837 $22,294 $9,766
Maximum sustainable number of institutions 4,599 1836 804
Table 4: Comparison of Taiwan’s & Malaysia’s sustainable number of tertiary institutions based on the USA’s model using both population & per capita GDP data. (revised)
Country USA Taiwan Malaysia
Population (millions) 324 23.38 30.75
per capita GDP (US$) $55,837 $22,294 $9,766
Maximum sustainable number of institutions 4,599 133 76
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