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

January 23, 2011

Foreign Universities in India: Who’s Coming and Why?

My article was published in Financial Express on the primary motives of foreign universities interested in India and their influence on key Indian higher education trends. Given below is the article which is also available here.

While the Foreign Educational Institutions Bill is still awaiting discussions in Parliament, there is continued interest and curiosity about which foreign universities will come to India and how will the Bill influence Indian higher education?

Over the last decade, Indian higher education has witnessed three primary trends—growth of private institutions, increasing demand for professional education and widening regional disparity. These three trends will become stronger with the introduction of the Bill and more foreign universities with profit/revenue motives are expected to establish campuses in India.

Motives of foreign universities

Global higher education systems are diverse and within each system there are a wide range of institutions with varying missions and quality. However, there are two primary motives for institutions seeking to enter India—prestige or profit/revenue. Between these two extremes, there are many foreign institutions with a different mix of prestige and profit motives.

Building universities of excellence is a time-taking and incremental process. Once an institution has achieved a certain level of reputation, maintaining it at that level is quite a challenge. Thus, even the best universities are in constant quest to access indicators of prestige like knowledge, research and talent. This access directly translates into competitiveness for rankings, which strongly emphasise on internationalisation and research output. For example, Harvard and Yale are in the prestige-enhancing group and have categorically said that they will not offer degree programmes in India and hence their approach is to engage with knowledge creation and dissemination through non-degree partnerships and programmes.

At the other extreme, there are universities that seek profit/revenue and see India as a market with huge growth potential. Especially for public universities, this opportunity comes at a time when they are facing severe budget cuts from government and are hard-pressed to seek additional sources of revenue. Technically, not-for-profit public universities are not seeking profit, instead they are becoming “self-sufficient” by adding new sources of revenue. Likewise, many for-profit institutions, especially from the US, are keen to enter India; however, Indian regulatory requirements prohibit them to profit from education and hence they have to work-around the requirements. For example, Singapore’s Raffles Education Corporation partnered with Educomp to establish a for-profit entity and offer education programmes for the masses, which are not recognised by local authorities.

The primary purpose of the Bill is “to regulate entry and operation of foreign educational institutions imparting or intending to impart higher education” leading to award of educational qualifications. Given the context and motives of foreign universities, more degree-offering programmes are expected to come from institutions seeking to enter India with the motive of profit/revenue as compared to prestige. The prestige-seeking universities will limit themselves to non-degree relationships and offerings only. The Bill will also add to the growth of private institutions, professional education and widening regional disparity.

Growth of private institutions

Public university system in many countries, including the US, is in crisis and faces serious budget cuts. Hence, they are not ready to invest money in partnerships. Indian public universities also lack resources and entrepreneurial zeal, and are stymied by bureaucracy to engage with foreign partners. Thus, private institutions in India or corporate partners are more likely to engage in partnerships with the foreign public universities. For example, Indiana University and Georgia State University are US public universities that have partnered with private Indian institutions, OP Jindal University and National Management School, Chennai, respectively.

Rise in professional education

Indian engineering and management institutions have doubled to about 2,000 and 3,000 institutions from 2005-06 to 2009-10. This rapid growth represents the demand for professional, job-oriented degrees. As these programmes have a relatively higher employability, institutions also have a better pricing power in this segment as compared to arts, science and commerce courses. This means that foreign institutions are likely to offer more programmes in engineering and management as compared to liberal arts and sciences. For example, recent partnership between Strathclyde University and SKIL Education, Carnegie Mellon University and Shiv Nadar Foundation, and Virginia Tech and MARG are all for professional programmes in engineering or management.

Widening regional disparity

Foreign universities would concentrate on metro cities and states that have high demand, pricing power, accessibility and employment opportunities for students. This means that they are not going to start campus in regions that actually require quality institutions. However, foreign universities will be most appealing to students from tier-2 cities like Nagpur or Indore where students, especially females, aspire to go abroad but may not match up to the financial, social or academic requirements. However, foreign universities in India would not attract academically brilliant or financially well-off who would continue to go abroad in search of best international education, experience and exposure.

Foreign universities are eager to engage with Indian higher education despite the challenges. In the immediate term, foreign universities will be cautious and partner with private institutions, offer popular professional programmes and situate themselves in major cities. This means that it will take a long time before its impact is felt by the masses and the larger landscape of Indian higher education. However, foreign universities will certainly create new expectations of quality and professionalism, which will bode well for the sector and students.

Dr. Rahul Choudaha
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January 15, 2011

China beats India in the race for quality in management education

China has beaten India in terms of meeting benchmarks of quality and international reputation in management education. There are 10 AACSB accredited institutions in China as compared to none in India. AACSB accreditation is a rigorous and time-intensive process which takes several years and less than five percent on the institutions in the world have managed to achieve it. Chinese B-schools have shown better foresight and commitment to quality than Indian institutions. Here is a special report by BusinessWeek on B-schools in China.

This becomes even more depressing for India if one considers the total number of management institutions. There are more than 2,000 B-schools in India as compared to around 230 in China. Thus, while India is way ahead of China in terms of quantity, it has lagged behind in quality.

Chinese B-schools have also been more successful in forging international collaborations and offering joint-programs in China. For example, Washington Olin-Fudan, Shanghai Jiaotong-UBC and Fudan-MIT. Several Indian B-schools have student exchange programs, however, no big names offering joint-MBA programs.

The boom in business degree for China and India is driven by a combination of factors including increasing demand for MBAs by industry and higher salary premium commanded by MBA graduates. However, Indian B-schools also lost because of the lack of a strong quality assurance process and salary mania created by annual placement figures and rankings which propelled supply without enough emphasis on quality.

Indian B-schools need to come together and existing associations of management education like AIMS, AIMA have to take up a more proactive role in creating standards of self-regulation and quality. While people may question the quality of "Made in China" products, they have clearly surpassed India is terms of quality of management education.

Dr. Rahul Choudaha
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January 08, 2011

AICTE should recognize one-year MBA and ensure quality

AICTE recently issued a notification related to Post Graduate Diploma in Management - PGDM (MBA) which requires the standard length of PGDM programs to be two years. (Here is a related article on the impact of notification on entrance tests.)

This is contrary to the increasing demand for one-year MBA programs, both in India and abroad. It also gives confusing message to students and institutions about what are the differences between recognized and unrecognized, one-year and two-year MBA programs. For example, Great Lakes Institute of Management (GLIM) received AICTE approval for its one year PGPM as "certificate" program in August 2010 and not diploma program.

At times when cost of MBA programs is increasing, one-year MBA offer a unique value proposition and a viable opportunity for individuals with significant work-experience. European institutions have been early adopters of one-year MBA and European Quality Link (EQUAL)--an association in the field of European management education--provides the guidelines for an MBA degree and accepts minimum length of MBA program as one year full-time. Even in the US market, which primarily follows a 2-year MBA model is becoming open to new one-year MBA programs. For example, Rutgers Business School and Daniels College of Business, University of Denver recently launched one-year MBA programs.

While demand for one-year MBA programs is increasing in India, quality has lagged behind. Success of ISB model has encouraged launch of many new programs and institutions where institutions are hiding behind the excuse of inefficiency of AICTE and "industry-recognition." Some of these programs are very expensive and still offer inferior quality for a credential which is not technically equivalent to an MBA. Overall, this has resulted in the dilution of the quality of one-year MBA programs. AICTE is reacting to valid concerns about the quality of management education in India and also to the continued criticism it had been facing related to corruption and inefficiencies.

While AICTE's intent is correct, execution is dismal. It is again taking a approach which inhibits innovation and flexibility. It ignores that institutional quality is a spectrum and dumping good and bad institutions in the same bucket does not help either set of institutions. Instead, it should have accepted the market/student need for one-year MBA programs and created high quality standards for the recognition of one-year MBA programs.

Any thoughts/comments?

Dr. Rahul Choudaha
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January 01, 2011

Indian Higher Education Trends 2011

While 2010 was a year of "announcements", 2011 is expected to be a year of "implementation". Indian higher education will gain more attention from stakeholders and the future is paved with enthusiasm at one level and anxieties at another level. Given below are the top seven trends to watch for 2011. Detailed version of this article was published in EDU magazine.

#1: Internationalization will become a dominant theme
Internationalization as a strategy for building reputation will gain prominence. Foreign universities bill is expected to clear in 2011, however, it will have a limited impact in the immediate term. Most universities would still attempt to craft collaborations by working around the stipulations of the bill and engage in low-risk, non-degree partnerships.

#2: Global accreditation will become the gold standard
Pursuit of global accreditations will gain momentum among private universities seeking world-class partnerships and status. Some of the early adopters of global accreditation include, SP Jain and MDI whose management programs are accredited by AMBA and VIT University with engineering programs accredited by ABET.

#3: New-age universities will change the expectations of quality
New-age private universities like the NIIT University, Shiv Nadar Unviersity and Azim Premji University supported by philanthropy and professional management will create new standards of quality. Likewise, among the public universities, the concept of 14 innovation universities proposed by the Indian government will start taking some shape.

#4: Realization about the characteristics of higher education
More universities will realize that higher education has some very unique characteristics. This includes inherent high experience qualities which make is very difficult to judge the worth of education until purchased. Also, given the sociopolitical connection of higher education, it will become evident that principles and practices of institution building in higher education are highly contextual.

#5: Demand of higher education professionals will increase
As the competition intensifies and aspirations to build “world-class” institutions grow, there will be a demand for professional talent who can understand the characteristics of higher education and deliver results. More institutions, which are aiming for high quality offerings, would adopt and recognize that building world-class institutions requires world-class talent.

#6: Quality gap between universities will widen
Most private institutions will continue to compromise quality and try to find short-cuts instead of investing for long-term and public universities will face decreasing resources to compete effectively. In contrast, a handful of private universities with abundant resources will leap ahead in quality and most other institutions will struggle to keep pace with the competition.

#7: Policy landscape will become tougher
Increasingly, government is realizing that expanding system without proper quality mechanisms will result in huge wastage of resources. There are several proposals expected in the direction of transparency and stricter norms. However, given the highly political angle of higher education reforms, implementation of several proposed policies will lag behind the fast-changing needs of the sector.

2011 will be an exciting year for Indian higher education not only for some bold ideas, radical reforms and disruptive innovations but more so for enabling their implementation. Higher education institutions which can sense, prepare and act on these future trends will create a long-term competitive advantage for themselves.

What other trends in higher education you expect for 2011? Your views/comments are welcome.

Dr. Rahul Choudaha
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