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

March 24, 2012

Growth Statistics on Engineering and Management Institutions in India

Number of AICTE approved seats for student intake in engineering and management institutions in India grew by nearly 125% and 180% respectively in five years as compared to the growth of economy (Gross Domestic Product-GDP) by only about 50%.

Clearly, engineering and management institutions have grown at a pace much faster than the economy to absorb the talent. This in turn has created a situation of overcapacity, poor quality and unemployability of graduates.

Growth of engineering institutions even outstripped the pace of growth of IT-BPO industry. For example, IT-BPO industry grew by nearly 85% in five years as compared to 125% growth in engineering institutions. Given that many engineering and even management graduates go to high-growth, high-paying IT industry, this sign of overcapacity is troublesome and indicates that industry is headed for a major shake-up and consolidation.

Another troublesome part is that despite the growth of student intake of doctoral seats have not increased proportionately. For example, number of engineering seats in PhD increased by only 20% as compared to number of students to be taught increased by 125%.

Dr. Rahul Choudaha
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March 17, 2012

Indian MBA Bubble Bust?

Is the great Indian MBA bubble busting? 134 business management institutions in India had submitted applications to AICTE for closure (Indian regulator for management and engineering programs). One of the major reason is low enrollment number of students which in turn reflects poor quality of programs and employability potential for students. (Here is my earlier post on B-schools Bubble ).

There are also many institutions which are not approved by AICTE and facing challenges of financial sustainability and growth. For example, Mumbai Business School closed within three years despite having some big names associated with it. The official noted “We were not able to generate the operational cashflow and capacity utilisation was below the mark. So we decided to down the shutters.”

Many institutions started in last five years without AICTE approval, blaming its bureaucratic process and restrictive rules on academic and financial operations (Here is the list of institutions conducting technical programme without AICTE Approval). There were institutions which were inspired by the success of ISB to build a quality B-schools and then there were many who were inspired by IIPM to make big money from business of business education. Both, ISB and IIPM, despite being on two ends of the quality spectrum were not approved by AICTE (ISB is first and only B-school in India with AACSB accreditation but it does not has approval by AICTE). This is how AICTE started losing its relevance and teeth in assuring quality of MBA programs.

It is high time that Indian B-schools start realizing the importance of investing in quality to ensure their long-term sustainability. Likewise, AICTE had been trying to get its act together but still has a long way to go before it become effective and responsive for ensuring quality in management education.

Related posts:
Wake up IIMA: Lead the quality tranformation in Indian management education
Need of self-regulation in Indian B-Schools to improve quality

Dr. Rahul Choudaha

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March 11, 2012

Asians fueling demand for American MBA

Asian countries are the engines of global economic growth. Between 2000-2010, Indian and Chinese economy grew four-fold and five-fold respectively, in contrast to one-and-a-half times for the US.

The story is not very different in the world of management education. Asia is emerging as the engine of demand for global MBA programs. A recent GMAC report notes that number of GMAT test-takers in the US remained stagnant over five years, however, they grew by nearly 47% in Asia.

TY 2007TY 2011Change% Change
East & Southeast Asia34,54857,64923,10167%
Central & South Asia23,64227,9024,26018%
Total Asia58,19085,55127,36147%

The contrast between Asians and Americans for management programs becomes even more interesting when comparing the absolute numbers. The number of Americans taking GMAT decreased by 775 in five years however, the number increased by 27,361 among Asians. Thus, all the growth in demand for GMAT test-takers and American B-schools is emerging from outside the US. This clearly has implications for admissions and program management approaches of institutions.

Dr. Rahul Choudaha

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March 01, 2012

International Student Mobility Research Report

Competition for international students, cost of recruitment and complexity of higher education systems is posing serious challenge for higher education institutions to recruit in an efficient manner. A recent report published by World Education Services notes that "Overall, U.S. institutions will likely expect another year of international enrollment growth in 2012. However, the road ahead for most U.S. institutions of higher education will not be smooth as many institutions grapple with challenges in meeting recruitment goals with limited time and tight budgets. This is where a better understanding of enrollment trends would help institutions prioritize their resources." Given below is the excerpt from the report:
• While China and India are still too big to ignore, there are other emerging countries worth paying attention to, including Saudi Arabia, Vietnam, Mexico, and Brazil. Recruitment to these countries should also be cultivated not only for campus diversity purposes, but also as a de-risking strategy.

• Growth in international student enrollment is not restricted to large states like California and New York; non-traditional destinations, including Montana, Oregon and Colorado, are also witnessing significant growth due to more aggressive institutional outreach efforts and state policy reforms that allow for the enrollment of more international students in public institutions.

• Enrollment growth at the Bachelor’s level is set to outstrip growth at the Master’s and Doctoral levels. Since international students studying at the Bachelor’s level are typically funded by their families, as opposed to financial aid, and provide a longer stream of revenue (four years) versus Master’s programs (two years), some public institutions are viewing this trend as a solution to current fiscal challenges.

• English as a Second Language (ESL) programs are emerging as an important pathway for international students, most notably from Saudi Arabia. The availability and length of Optional Practical Training (OPT) will also continue to be an important factor for students heading for the U.S., most notably for Indian students.

• Given intense pressure on institutions to become more prompt and efficient in achieving their recruitment goals, the use of recruitment service providers, social media and state consortia marketing will gain momentum
I will also be co-presenting at a free interactive WES webinar on March 16, 2012 to discuss key findings.

Dr. Rahul Choudaha
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