Trends, insights and research to inform growth and innovation strategies in international higher education.

March 17, 2010

Foreign Universities in India: A Reality Check

With the recent approval of the foreign universities bill by the cabinet, many people interested in Indian higher education are riding a wave of optimism and expecting that there will be a number of highly reputed institutions like Harvard and Yale which would be establishing their campuses in India. On the other hand, there are few people who believe that this will open floodgates for poor quality institutions which would enter India to take unfair advantage of students.

Both these views are at the extremes and require a dose of reality. In these times of budget cuts and decreasing endowments for universities, there are very few reputed foreign universities which would be willing and capable of establishing campus in India. Public universities in UK and US are facing severe financial turmoil and private non-profit universities which rely on tuition and endowments are facing worst fall in their endowments since recession.

Apart from increasing constraints on financial resources, building a world-class institution takes significant amount of time and resources. The trend of off-shore international campuses at other destinations like Gulf, gained traction because of the substantial financial incentives provided by the host countries.

Having a global brand name and financial support may be necessary but it is not sufficient. Some of the off-shore campuses of foreign universities in the Gulf are finding it difficult to fill classes. In addition there are other big names who had to shut down their operations in an embarrassing manner. For example, the University of New South Wales, Australia had to close down its Singapore campus and was labeled as "one of the Australian higher education sector's worst business failures" for the reasons of enrollment shortfall.

Thus, reputed universities are now even more cautious about their brands and at the same time look for substantial financial support and autonomy to be present as a off-shore campus. In the Indian context, government is not in a position to provide any financial incentives nor it could ensure complete autonomy from sociopolitical influences. Overall, this makes the case for reputed institutions entering in India quite weak.

Only segment in higher education which had been prospering even in these troubled times is the "for-profit" higher education, which includes University of Phoenix. A recent cover story in the Chronicle of Higher Education states that "At a time when American public higher education is cutting budgets, laying off people, and turning away students, the rise of for-profit universities has been meteoric." This is clearly evident in the financial growth of universities like DeVry whose revenue grew by 34% from 1.09 billion to 1.46 billion in the year ending June 30, 2009. However, government is not interested in inviting this sector to India.

This means that for-profit universities are not allowed by the government and reputed not-for-profit universities are not finding it feasible to start their own campuses. Does that mean that there will be no impact on the interest of foreign universities in India with this bill? No. There is an interest and there will be increasing interest by foreign universities, however, the form and nature of their presence needs to be rationalized. As Alan Ruby rightly pointed out that "The push and pull factors will coalesce in distinct ways for each university as it considers the emerging opportunities in India."

There are three segments of universities interested in coming to India with different needs and objectives:
1) Prestige-enhancing (top-50 research universities): This is the segment of universities which are not interested in India as a source of revenue. They are primarily interested in adding to their existing prestige and relevance by offering access to their faculty and students to the emerging and increasingly important market of India. These universities would not establish their own full-fledged campus in India in next five years. However, they would be very keen to establish partnerships with universities in the form of student exchanges, faculty exchanges and collaborative research projects. For example, Yale has just clarified that they do not see starting a campus in India, instead they are interested in expanding partnerships. They may also establish their own research centers and executive education centers. For example, Harvard Business School established its India Research Center for this purpose.  
 
2) Prestige-seeking (next-tier of 100 universities): These institutions seek internationalization to build their prestige and at the same time seek opportunities of revenue enhancement. They may be open to establish campuses by themselves or in partnership. In addition to activities undertaken by prestige-enhancing universities, this set of universities are open to engage in more extensive arrangement including joint-degrees and twinning programs. For example, National Management School has partnered with Georgia State University to offer joint-MBA program. This also includes universities from UK forming partnerships to offer degrees in India. For example, Lancaster University partnered with GD Goenka to establish GD Goenka World Institute.

Indian universities and potential partners need to understand that even though this segment does not include Harvard or Oxford, it still has very high quality institutions as compared to what is available in India. Bob McKinlay, deputy vice-chancellor of Lancaster  University said that "… finding a partner in such markets [India] is not so easy. Lancaster made three trips to India and spoke to more than 50 institutions before it alighted on Goenka - and that only happened because Goenka approached Lancaster."  Indian corporate houses or high-achieving alumni could help in contributing towards the investment requirements and address financial concerns. For example, India's richest man, Mukesh Ambani announced his intentions to start a world-class university. Likewise, there are several other corporate houses which have expressed interest in higher education and could be courted for potential partnerships.

3) Revenue/profit maximizing: These institutions are primarily looking for additional sources of revenue/profit by scaling enrollments. In this category, lesser known public universities engage in twinning programs but they do not have resources to start their own off-shore campuses. While the private for-profit institutions are very interested and financially capable to enter India and have a full-fledged presence, they are not welcomed in India under the current policy framework. Kapil Sibal has further clarified that education will remain a not-for-profit sector. Thus, despite having the potential and interest to enter India with full campuses, private for-profit sector may also have to content themselves with partnerships. For example, Educomp-Raffles partnership in the area of design. It is also important to note that this is also the segment which is most susceptible for fly-by-night operations and requires closer monitoring.

Interestingly, despite different needs and objectives, all the above segments of foreign universities are facing challenges in entering in India. These challenges not only exist in the form of unrealistic policy direction but also in terms of institutional expectations mismatch. Government is interested in attracting highly reputed universities and likewise, every Indian institution aspires to collaborate with top brand names only. This overlooks the whole spectrum of quality and diversity available in the global higher education system.

Policymakers should not forget that the financial investment needed for expanding access (~US$25 billion projected by the end of 2012) cannot be met by government alone or even partnerships with a handful of prestigious institutions. Some of this has to come from the profit/revenue maximizing institutions which have the efficiency and incentives to scale the offerings.

The real test of quality assurance system is to differentiate wheat from the chaff. Thus, government should focus on creating effective and robust regulatory mechanism for ensuring that malpractices do not take place in the name of foreign institutions. There is a spectrum of institutional quality and types and they serve different needs of student segments. India needs both the high quality teaching and research provided by the research institutions but also the massification which could be catalyzed by next tier of institutions. Undoubtedly, foreign universities bill is a positive development as it will improve quality and practice of higher education. However, it has to be enacted in the context of the needs of India and deeper understanding of the landscape of global higher education.

-Dr. Rahul Choudaha
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March 13, 2010

Guru Mantra: Shai Reshef, Founder, University of the People

Shai Reshef
Founder & President

Shai Reshef is the Founder & President of the University of the People, the world’s first tuition-free, online academic institution, which he established following 20 years in the international education market. From 1989 to 2005, Reshef served as Chairman of the Kidum Group, the largest for-profit educational services company based in Israel which was sold to Kaplan, Inc. in 2005. Between 2001 and 2004, while continuing as the chairman of Kidum, Reshef lived in the Netherlands where he chaired KIT eLearning, a subsidiary of Kidum, the eLearning partner of the University of Liverpool and the first online university outside of the United States. The company was sold to Laureate in 2004. In 2009, Reshef was named one of Fast Company’s “100 Most Creative People in Business,” joined the United Nations’ Global Alliance for Information and Communication Technologies and Development as a High-level Adviser, and spoke internationally at conferences including DLD: Digital, Life, Design in Munich and the World Economic Forum on the Middle East in Jordan. Reshef holds a B.A., magna cum laude, from Tel Aviv University and an M.A. from the University of Michigan in Chinese Politics.

Rahul- What were the drivers of establishing the University of the People? Please share the concept and how do you plan to sustain the university with no tuition fee?
Shai- My idea for University of the People stemmed from over 20 years in for-profit education, as well as extensive international travel. As the founder of KIT, I realized that the tools for providing accessible higher education were out there, but the price was too high. Then I began working at Cramster.com and discovered the strength of online study communities. Witnessing first-hand the power of technology to advance education, I knew there was the potential to adapt these principles to create a high-quality, low-cost and global pedagogical model—so I did with University of the People.

Quality of education is not synonymous with its cost. Applied to a tuition-free model, long distance learning has the enormous potential to make education an equalizer by providing the opportunity to those otherwise excluded. By incorporating multiple educational strategies that are virtually free—such as peer-to-peer learning, open courseware and volunteer instructors—UoPeople effectively functions on a limited budget.

Currently, students may attend UoPeople entirely free of charge. As the University expands, the sustainability model requires that nominal admission and examination processing fees ($15-$50 and $10-$100 respectively) will be levied to cover operating expenses. These fees will be adjusted on a sliding scale based on the economic situation in the student’s country of residency. Students will never be charged for applying, taking classes or accessing study materials.

Rahul- What are some of the strategic priorities for the institution and how do you see the university evolving in next 3-5 years?
Shai- In the next 3-5 years, we hope to see our first students graduate from UoPeople, equipped with the skills and knowledge necessary to create a better life, community and world. We also hope to expand our reach to serve an even greater number of students. By giving students with diverse backgrounds the opportunity to teach and learn from one another, we hope to bring the world a step closer to peace.

Rahul- You have substantial entrepreneurial experiences in for-profit corporate world. How is institution building and leadership in education domain different or similar with the for-profit world?
Shai- After 20 years in for-profit education, I decided that it’s time to give back by establishing a non-profit, tuition-free university. Nonprofits with the greatest impact are run like businesses—and that is how I’ve built UoPeople. While operating expenses are minimal and the cost to our students is nominal, UoPeople is nonetheless results oriented: we have a clear goal to democratize higher education.
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March 07, 2010

Published in IIE book, EDU magazine

I have recently published in a book by IIE and EDU magazine.

Institute of International Education (IIE) book is entitled "International India: A Turning Point in Educational Exchange with the U.S." focusing on U.S.-India higher education exchanges. I have co-authored a chapter on background and trends in the U.S.-India academic collaborations. The book is edited by Dr. Rajika Bhandari of IIE and includes chapters from Mr. Sam Pitroda and Dr. Philip Altbach. 
EDU is a new magazine which focuses on higher education sector in India. The editor of the magazine is Dr. Pramath Raj Sinha who was founding dean of the ISB. I have authored a chapter entitled "Leading without Leadership?" where I argue that leading higher educational institutions is a complex and challenging role which requires unique competencies. There is a need for developing a profession of educational leadership through systematic education, research and professional development.
 I would welcome any thoughts/questions you might have. 

- Dr. Rahul Choudaha
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March 01, 2010

Dean Yash Gupta, Johns Hopkins Carey Business School

Dr. Yash Gupta
Dean & Professor
The Johns Hopkins Carey Business School

Yash Gupta is dean and professor at the Johns Hopkins Carey Business School in Baltimore, Md. He previously served as dean of the business schools of the University of Southern California, the University of Washington, and the University of Colorado at Denver. Dean Gupta’s academic and administrative appointments have also included the Frazier Family Professor in the School of Business at the University of Louisville (1988-1992), professor at the University of Manitoba, and assistant professor at Memorial University of Newfoundland. In 1991, he was awarded the University of Louisville President’s Award for Outstanding Scholarship, Research and Creative Activity, and in 1994 and 1996 he was ranked as the most prolific scholar in the area of operations management in the United States. He currently serves on the governing board of the Association to Advance Collegiate Schools of Business (AACSB). Dean Gupta earned a Ph.D. in management sciences from the University of Bradford, England, in 1976. He also holds a M.Tech, production management, from Brunel University of West London, England; a B.Sc.Eng, production engineering, from Panjab University, India; and a P.Eng. from the Association of Professional Engineers of the Province of Manitoba, Canada. In addition, he completed the College Management Program in the Heinz School of Public Affairs at Carnegie Mellon University.

Rahul- The Johns Hopkins Carey Business School is the newest business school at one of the finest research universities in the world. At a time when the approach of business schools is being questioned, how does the Carey Business School plan to differentiate itself and offer value?
Dean Gupta- Traditionally, business schools have preached that the maximization of shareholder value is the primary goal of an organization. Is the stock price up or down? This is a myopic view of success. What’s more, B-schools have taught people on a paradigm that existed a half-century ago, when global understanding was not that important. The United States called the shots. We shipped our products around the world, and people bought them because they had no other alternatives. It was a veritable monopoly, so there was no need for us to take a global outlook, to try to learn much about the ways other people lived.

Now the business dynamic has changed drastically, in part because of the rise of China, India, Brazil, Russia, and other nations. To compete with them, today’s business leaders need a whole new set of tools – tools that reflect what I call “the art of business.” That means we must teach our business students, as we do here at Johns Hopkins, to internalize the ideas of flexibility, adaptability, empathy. Because the marketplace today is spread around the globe, you have to understand people’s cultures, their history, and their geography if you want to do business with them.

This comes fairly naturally here at Johns Hopkins, because we have built a presence in more than 100 countries. Also, we’re the oldest research university in the United States; therefore, fresh and adaptable thinking is second nature to us, as is innovation – the university produces about 350 new discoveries every year. Our business school was created in that same spirit of international engagement, international understanding, and, most important, service to the international community. That’s why we say the Johns Hopkins Carey Business School is the school “where business is taught with humanity in mind.”

Rahul- Your Web site mentions that the Johns Hopkins Global MBA program emphasizes "the application of innovative business concepts to actual business problems." Please share more about the curricular innovations in the program and how they fit your vision for the incoming "charter class" of 80 students.
Dean Gupta- For starters, we take a different approach to the B-school essentials of finance, management, operation, and marketing. Unlike many business schools, we don’t just approach each of these topics as an isolated area of study. We examine them within the dynamics of a modern business. Our students move through a series of integrated modules that reflect the nature and structure of real-world business problems in the areas of financial resources, people and markets, business processes, and managerial decision behavior, particularly as they apply to health- and science-related challenges.

We have the Discovery to Market Project, which uses the vast pool of discoveries made in the health sciences and related fields at Johns Hopkins so that we provide our students with insight into translating a scientific discovery into a product or technology with potential for commercialization.

There’s the Service to Humanity Project, which requires our students to take part in an international experience so that they develop an understanding of how to build sustainable businesses amid the complex challenges of developing markets. They learn how to be successful in places with weak infrastructures, fragmented banking systems, and political instability. Such places are where we’ll find the markets and the workers of the future; and as I often point out, leaders are the ones who get to the future first, so our goal in preparing the business leaders of the future is to give them an understanding of what the future of business will look like.

We have the weekly Thought and Discourse Seminars, conducted by prominent business leaders and policy makers. The idea behind the format is to stimulate analytical thinking, persuasive communication, and creative expression. This is intellectual inquiry and debate about how business people make their decisions and how they communicate their ideas.

Also, in regard to global understanding, we have the great advantage of being here in Baltimore, just 40 miles from all the foreign embassies in Washington, D.C. These are great reservoirs of knowledge about various nations and their cultures, their economics, their politics. We intend to take full advantage of the proximity of all this invaluable knowledge.

Rahul- Before coming to the Carey Business School, you had high-impact leadership experiences at the University of Washington and the University of Southern California. You also write a blog on leadership for the Washington Post. How is leading a research university different or similar to leading a for-profit corporate entity?
Dean Gupta- The two are very different. A for-profit organization’s motivation is just as the title implies – profit. The objective of a university like ours is to disseminate as much knowledge and information as we can. The idea isn’t so much to make a profit as to profit the world and its people.

The late A. Bartlett Giamatti, who was the president of Yale, put it so well when he wrote that “a college or university is an institution where financial incentives to excellence are absent; where the product line is not a unit or an object but rather a value-laden and lifelong process; where the goal of the enterprise is not growth or market share but intellectual excellence; not profit or proprietary rights, but the free good of knowledge; not efficiency of operation but equity of treatment; not increased productivity in economic terms, but increased intensity of thinking about who we are and how we live and about the world around us.”
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