Shaun Twaddle looks at the drivers behind why Private Training Establishments want to change their name

By Shaun Twaddle*

Can a simple name change result in increased economic growth?

What’s in a name? Does it define a business? Can a change in name lead to increased growth for a business or even New Zealand as a whole?

I started thinking about this very issue when I attended the annual Independent Tertiary Education New Zealand (ITENZ) conference last month.  At this conference two of the larger peak bodies in the private training establishment (PTE) sector confirmed that they want to change their name from Private Training Establishments to Independent Tertiary Institutions.  For this to occur, they need the Government to agree to legislate for a change in legal name.

What are PTEs?

PTEs offer specific vocational courses at certificate and diploma level on the New Zealand Qualification Framework.  There are over 500 PTEs in New Zealand, who range in size and programmes on offer.

PTEs have been around a while, having come out of the education reforms that were kicked off by David Lange in the late 1980s.  Why then, you may ask, would they want to change a name and brand that has over the past 25 years become recognised by the 420,000 people who enrol with a PTE each year?

Why are they considering a name change?

After a bit of digging, the argument seems to be threefold – perception, past performance and potential economic gain. Some arguments are more compelling than others.

Perception

Many perceive PTEs to be privately run businesses that focus on profit over quality. Furthermore, the assumption is that PTEs only offer lower level qualifications. But this is far from the case. Although PTEs aim to make a profit (after all they are also a business), they must still adhere to strict education requirements imposed by NZQA. What’s more, PTEs are increasingly offering qualifications up to level 6 on the New Zealand Qualifications Framework.

Past performance

It’s probably fair to say that there have been pockets of poor performance in many parts of the tertiary education system in the past.  PTEs haven’t been immune to this with isolated instances of fraud, PTEs going into liquidation and students being left high and dry.  However, in recent years, these occurrences have become a lot less common, helped in part by a consolidation of the sector and larger PTEs becoming more prominent.

Potential economic gain

As my colleague Benje Patterson outlined a few months back, international students spent $2.75bn in the New Zealand economy during 2014.  International students at PTEs make up a large chunk of both overall international student numbers in New Zealand (49% in 2014) and the economic contribution of international students.

International students at PTEs have also been a strong contributor to overall international student growth in recent years.  This is despite anecdotal information from the sector that, when marketing the sector internationally, the word ‘Private’ in the name puts off some potential students.

What’s the impact for NZ as a whole?

The perception and past performance arguments are compelling from a PTE point of view, but not necessarily from a NZ Inc. point of view.  A change in name may help PTEs break away from the stigma of the past.  This has worked for a number of companies, Z energy for example. 

But even if the above name change is successful, it is unlikely to result in more domestic students entering into tertiary education, especially with the Ministry of Education expecting a drop in domestic tertiary education enrolments over the next few years due to demographic factors.

The ability to increase our potential economic gain through increased international student numbers is however, a much more compelling argument from a NZ Inc. as well as a PTE point of view.  The number of international students studying at PTEs has been a key driver of overall international student numbers and the corresponding growth in the economic contribution of international education in recent years.  If the claims that further growth is being held back as a result of negative perceptions internationally about the name PTEs, it would make sense from an NZ Inc. point of view to agree to a name change.

Given declining domestic student numbers over the coming years, additional economic growth in the tertiary education system is unlikely to come from local students.  The focus, as it currently is, should be on international education.  If a name change would aid in this, I would implore the Government to take the proposition of the PTE sector seriously.


Shaun Twaddle is a senior economist at Infometrics.  This article originally appeared in Infometrics’ newsletter and has been republished here with permission. You can contact him here »