The economic impact of language programs on communities

When cities and communities talk about the industries that contribute to their economy, rarely is education mentioned. That’s because traditionally, education and business have been seen as two distinct sectors. But we know that like it or not, the model is changing. Private language schools, business colleges and technical training institutes – just to name a few types of educational institutions — receive little to no money from government. They must operate like a business in order to keep their doors open. At the same time, they are always under the microscope when it comes to the quality of their programs, as often they are harshly scrutinized by their peers in more traditional programs that are funded, at least in part, by the government.

Nowadays those traditional programs are prodded to recover costs, or even to generate revenue. The traditional schools can learn a lot from the private schools when it comes to operating, budgeting and forecasting.

What both types of schools have in common, I believe, is that generally they are disregarded, however unintentionally, by business and even political or governing bodies when it comes to being seen as a force that contributes significant money to the community of which they are a part. In some cases, language programs housed at large post-secondary institutions are sometimes shunned by the same senior administrators or administrative committees that challenge them to be financially self-sufficient, while the business and science faculties never worry about such matters. I believe that part of the reason is that we ourselves do not view what we do as business, and as a result, we don’t always recognize the value that we contribute to our own communities.

I would suggest that language schools and programs today are in a unique position. The reality is that we are being asked to recruit more students, generate revenue and be self-sustaining. At the same time, they must maintain the highest of academic standards. Those who run them are both educators and business people. And sometimes it seems the rest of the world simply has not caught up when it comes to respecting the work that we do and the reality of our business. Before we can ask others to do this, we must do it for ourselves.

In August, 2003 I was interviewed on the local TV news about the effect that the war in Iraq, SARS, mad cow disease and West Nile Virus had on language school enrollments in Calgary, the city where I live. Before the interview, I did some basic research about language schools in my community and I was surprised by the results. I found out that the decrease in student enrollment due to these events could have a significant economic impact.

Let me say now that these estimates were my own calculations, based on my knowledge of the local market and experience working in the industry in this city at the time. Here are what my estimates showed:

Information and research about language schools in Calgary, Alberta, Canada (2003)

* There are about 50 language schools and programs in and around Calgary. This includes private schools, programs at post-secondary institutions and other programs. It does not include private tutors or home-based language classes

*  Most foreign students who came here to study English are from Japan, Korea, Mexico and Taiwan. Many came in groups and are recruited by agents.

* In summer, about 1500 foreign students were in Calgary each month to study English. Schools are not required to release enrollment data and I based this number on my knowledge of the language study industry in Calgary. But if you take 50 language schools and divide it by 1500 students, you can easily see that this is a conservative estimate of 30 students per school, per month. Most schools may have had many more than that number and others would have  had just a few.

* In the remaining months, that drops to about 750 students per month. This is also a very conservative average of 15 students per school, per month.

I used conservative numbers on purpose, so as not to artificially inflate the numbers generated in the next portion of the research – the economic impact of language students studying in our city:

* Each student will spend approximately $2500 per month during their stay, calculated as follows:

$1000 tuition and books for a full-time program of 25 hours per week (includes examinations and other supplies.)

$750 homestay / accommodation and food

$750 travel, entertainment and shopping (about $187.50 per week, including transit fares, excursions to local attractions, dinners out, visits to local bars, movies, museums, activities, summer festivals, souvenirs, day trips out of town, etc.)

Using these numbers, I estimated that foreign students added $3,750,000 to Calgary’s economy each month during the summer (July and August) and another $1,875,000 during each of the other ten months of the year. That’s an estimated grand total of $26,250,000 that foreign students add to Calgary’s economy each year when they come here to study full time in a language school.

To add some perspective to those numbers, you’ll want to remember that at the time that informal study was conducted Calgary’s population was expected to reach 1 million people. It has since surpassed that number. Ours is a fairly wealthy whose economy is driven by oil and gas and ranching, as well as tourism and sports, among other industries.

There are larger cities in Canada like Vancouver and Toronto. I wonder how much money that language schools generate for their economies? What does your language school or program contribute to your city’s economy? What do all the language schools in your city or province contribute to its economy? I have long wanted to conduct a study on the economic impact of ESL programs across Canada. My hypothesis is that it education professionals, government representatives and business people alike would be astounded at the results.

By educating ourselves on how much we contribute to our local economy, we become aware that we are inter-connected with the greater community and it benefits from our “business”. In a city like Calgary where the main industry is oil and gas, $26 million may not be much, but I can assure you that if I asked 100 people in our city how much they thought foreign language students contribute to our economy, they wouldn’t even come close to guessing that much.

Who is financially affected when language school enrollment drops?

* language schools  (ESL programs, in particular)

* language teachers (Most work on contract and when there are no students, there are no jobs)

* local families who act as host families and get paid to billet students

* restaurants, bars, movie theatres

* the tourist industry

* the transit systems (bus, subway, etc.)

The next time you need to make a pitch to senior administration for more space; the next time you try to negotiate a special deal on bus passes for students at your school or the next time you have trouble arranging a group rate for your students to go to a museum, have your own estimates in hand. If you don’t have those estimates, hire someone to help you calculate them.

Share your research with others in your community. Make a presentation at your local Chamber of Commerce, community meeting or faculty council. This will benefit you in three ways. First, you will gain publicity for your own school. Second, you will help to educate others in the community about exactly how much the language school “business” contributes to your local economy. Finally, you may start a dialogue between different stakeholders of your community about this very topic, which is even more important than simply giving them facts.

If we are going to be asked to operate and think like businesses, then we deserve the respect that is due to an industry that can contribute significant amounts of money to our local economy. Not only do we educate students, we contribute positively to the economy of our own community in the process. In fact, I would say that it is our responsibility as language school administrators and marketers to be aware of the impact we have beyond the doors of our own schools and into the greater community.

What is your language school worth? I challenge you to figure it out. I think you’ll be surprised.

(This article was adapted from a previously published article that appeared in “Language School Marketing and Recruitment e-newsletter, March 15/04”, Vol. 2, Issue 6. © 2004. This research was later presented at a forum at the University of Calgary in 2006. Download a copy of the research paper from ERIC.)

Related posts:

Research: ESL programs boost Calgary’s economy by $26M+ per year 

New Report: The Economic ROI of Adult Education Programs


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Sarah Elaine Eaton is a faculty member in the Werklund School of Education, University of Calgary, Canada.

One Response to The economic impact of language programs on communities

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