Sherwin Pomerantz
Sherwin Pomerantz

Foreign students — America’s hidden export

A recent study by the NAFSA: Association of International Educators indicated that in the current academic year (2014-5), 41,446 international students are enrolled in colleges and universities in Pennsylvania alone.  The report posits that those students and their families spend $1.39 billion annually in the state, or an average of approximately $33,542 per student.

As for the sources of those students in Pennsylvania, 35.8% are from China and 13.3% are from India, with other nations contributing the other 50.9%.

Extrapolating that to the United States as a whole, where according to “Yahoo Finance” there are 886,000 foreign students enrolled this year, foreign students and their families spend $29.72 billion annually.

In truth, this constitutes the export of services from the US where the importer (i.e. the student) comes to the loading dock (i.e. the university) and picks up his/her merchandise (i.e. education) in exchange for payment (i.e. his/her living expenses and tuition), saving delivery costs and international payment problems.

To get a sense of the true economic significance of these services, consider the following:

There are only 16 US states whose export totals in 2013 exceeded $29 billion, while 34 states were below this mark.  According to the International Trade Administration of the US Department of Commerce, every $1 billion in exports is responsible for about 5,500 jobs.

That means the approximately $29 billion worth of “university education exports” annually supports up to 159,500 US jobs.

The question is: do governments fully understand and internalize the fact that this can be seen as an export?  Likewise, are export promotion agencies doing enough to encourage foreign students to enroll at their local universities?

Governments may also undervalue the significant long term economic ramifications of foreign student programs.  Besides the immediate financial gains (i.e. tuition payments, living expenses, etc.) and the personal connection forged between the foreign students and their respective host countries, these programs have the potential to create future foreign direct investment leads as well.

Foreign students are more likely to pursue their business interests in those states and countries where they studied.  For example, a student from Singapore learning in an American university today may very well be a successful CEO 25 years from now considering where to open his company’s US facility.  If he/she had a positive experience at a particular university in the US, chances are that he/she will consider favorably returning to that state with the US branch of the company.

This concept requires vision to internalize, of course, but the growth potential definitely exists.

In Israel, for example, there are relatively few foreign students enrolled in undergraduate academic programs and even fewer in graduate degree programs.  Israel would do well to consider making it more attractive to foreign students to study in the country so as to take advantage of the economic benefits.

Benjamin Franklin said: “To succeed, jump as quickly at opportunities as you do at conclusions.”  In this case the conclusions are already there waiting for people to seize the opportunities.

About the Author
Sherwin Pomerantz is a native New Yorker, who lived and worked in Chicago for 20 years before coming to Israel in 1984. An industrial engineer with advanced degrees in mechanical engineering and business, he is President of Atid EDI Ltd., a 29 year old Jerusalem-based economic development consulting firm which, among other things, represents the regional trade and investment interests of a number of US states, regional entities and Invest Hong Kong. A past national president of the Association of Americans & Canadians in Israel, he is also Immediate Past Chairperson of the Israel Board of the Pardes Institute of Jewish Studies and a Board Member of the Israel-America Chamber of Commerce. His articles have appeared in various publications in Israel and the US.