Analysis of Chinese Training Market and Development Report of Continuing Education in Universities
By Ma Yongbin, Wu Zhiyong,
The Research Center of School of Continuing Education, Tsinghua University
July, 2005
The Chinese training industry has seen a fast development in recent years. Organizations and individuals have swarmed into this seemingly greatly lucrative industry driven by the hunger for economic benefits. However, this market has become to yield little profit as the competitors proliferate. So how to adjust themselves to the market change, make appropriate development strategies, restructure service scope and seek new business opportunities has become an unavoidable concern of all training providers. This report describes the industrial status quo, analyzes the factors influencing the training market, and further draws a preliminary prediction about the Chinese training market development tendency, as well as an early proposal for the development strategy of universities’ continuing education and trainings.
1. Status Quo of Chinese Training Industry
This chapter analyzes the training industry with respect to industry volume and training providers (competitors) in order to get a clear picture of the entire training business, especially that of the opponents, which will help understand our place and orientation in this business.
1.1 Scale
Statistics show that the Chinese training market is growing at the rate of 30% yearly. The revenue in 2002 hit 200 billion yuan. Another statistic report shows the domestic training revenue totaled 50 billion in 2003, according to different calculation methodologies. The major training providers have their slices in this market, as specified below:
1.1.1 Management Training
According to the latest data by the National Bureau of Statistics of China and State Administration for Industry & Commerce, there are 7.96 million registered enterprises, including over 400,000 foreign companies, and 200,000 enterprises receive special funds from government. The management training sees a bright future when it is widely accepted across China. At present, the management training shares as much as 5 billion yuan out of the training market. Experts from China-Europe International Business School (CEIBS) believe that the market value of Chinese top managerial training is worth 250 million USD, and this number keeps climbing. By 2006, such market volume will surmount 4 billion USD. Therefore we predict that the training of top managerial level will contribute most to the revenue of business schools. Experts in the training circles hold the same opinion, that as much as the business schools are concerned, the service that brings the most revenue is top managerial trainings that issue no degrees, not MBA courses. A latest investigation shows that the market volume of global top managerial training is worth 350 billion USD. In the United States, this value accounts for 60-70% of the total business school revenues. While in China such training is just a nascent business, for instance, this proportion is no more than one third of the total CEIBS revenue.
1.1.2 IT Training
With people’s well acceptance of the “information technology-driven industrialization” strategy, a great deal of work is involved with, or dependent on computers, which stirs the demand for IT skill trainings in varied workplaces. According to statistics, there are 200-plus certifications in the IT industry. The examinees signed up for IT certification exams sponsored by Education and Labor & Personnel ministries per se exceed 5 million on a yearly basis, excluding all kinds of IT certifications issued by non-governmental organizations. To embrace such great demand, China’s IT certification-oriented training market is developing in a dramatic speed. The CCID Consulting data shows that the domestic IT certification market is growing at 30% yearly, dwarfing the average global speed of 12%. The Chinese government authorities predict that by 2005, the proportion of information industry will grow from the current 5% to 11% of GDP, and the gross value will amount 1.8 trillion RMB yuan by then. The momentum of IT training is greatly encouraged by this future. The data published by the Information Industry Ministry indicate that the annual IT talent demand for this area is at least 400,000. Deducted by the supply barely 70,000 new computer science graduates from universities, the talent gap is still nearly 400,000. So how to make up this gap? Undoubtedly, the IT training organizations will provide the rest 400,000.
Although not fully recovering from the dotcom crush, the IT education and training market has kept growing since 2000, which attracted attention of many IT professionals. In 2002, the total market of China’s IT education and training has reached 2.53 billion yuan, grown at 18.8% yearly, which was faster than the entire IT industry, and far outpaced the value of the previous two years, and sustainable. In 2003, China’s total market revenue of IT education and training was 2.88 billion yuan, and Beida Jade Bird (APTECH) per se made 250 million, accounting for 8.7% of the total market, ranking No. 1 in this industry with the growth rate of 19.1%; it has consolidated its status as the industry leader and first brand of China’s IT secondary education. Hence it was entitled the “Successful Enterprise in China’s IT Education & Training Service Industry of Year 2003” by CCID. It is estimated that the growth rate of this market will hit 15.8% in 2004, with the market volume of nearly 2.2 billion yuan.