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

July 27, 2013

Does Thunderbird-Laureate partnership indicate the future of higher education?

In March 2013, Thunderbird School of Global Management announced "strategic alliance" with Laureate Education Inc. The school had been under fiscal strains, as the number of applications to Thunderbird's two-year, full-time M.B.A. have declined by nearly 75% in the past 15 years and the school ended 2012 with $4 million loss, according to the Wall Street Journal. It adds "Thunderbird's woes reflect the existential crises that many business schools now face as demand softens for full-time, two-year M.B.A.s."

Despite the "existential crisis", the announcement of strategic alliance did not go well with the school's alumni. They interpreted it to be a sellout of the brand to the for-profit world with concerns of potential brand dilution. However, the perspectives seemed to be more emotional than rational.

Compelled by the barrage of questions from media and alumni, the Thunderbird leadership came forward to explain the nature of the partnership in a more transparent manner. Here is a video of alumni webcast explaining nature of the joint venture, financial and non-financial benefits and campus sale-leaseback.

At the core of the strategic alliance is a model of "joint service provider" which provides Laureate with access to the Thunderbird's brand in exchange for offering pipeline of international student enrollment to Thunderbird. Over ten years, jointly owned service provider will generate over $100 million in operating surplus for Thunderbird.

With Thunderbird as a "center of excellence", Laureate can launch new management programs and improve the quality of its existing programs. This will help in further enhancing the ability to attract students. At the same time, Laureate will offer pathways to their 4,800 students who have top credentials to join Thunderbird's program.

Thunderbird is an independent b-school (not a part of a university structure) and hence missed on some of the economies of scales that come with centralized, larger service structures. To fill gap, Thunderbird reached out to the network of Laureate.

In a contrasting move, UCLA’s Anderson School of Management liberated itself from the dependency on state funding for its full-time MBA program. Dean Judy Olian of Anderson, proposed the plan with the rationale that the cutting off the program’s state funding will offer more flexibility and ability to generate resources through tuition and gifts, reports BusinessWeek.

Overall, business schools are already feeling a pressure to justify the value of investing over $100,000  in two-year MBA degrees. While some see autonomy as a strategy (UCLA) to get more resources while other see synergies through partnerships (Thunderbird). The key is that pressure of cost and competition is becoming stronger and stronger, which is compelling b-schools to innovate and adapt. Don't be surprised if this trend cascades to rest of the higher education in search of operational efficiencies. As TIME magazine already sums up in an article "Cash-Strapped Universities Turn to Corporate-Style Consolidation."
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July 19, 2013

Chris Boehner of Vericant shares his entrepreneurial journey

Chris Boehner, Executive Director, Vericant
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After graduating from the College of Charleston with a degree in Corporate and Organizational Communications, Chris decided to follow in his grandfather’s footsteps and move to China. During his seven years in China, Chris’s background can best be described as eclectic.  He was a corporate trainer for Microsoft, then decided to cycle across Asia and Africa working as a translator (you wouldn’t believe how useful Mandarin is in Sudan). Afterward, he managed Omega’s transportation logistics during the Beijing Olympics then spent two years intensively studying Mandarin. His proudest achievement is being a founding member of Beijing’s first bluegrass band–The Redbucks. During Chris’s ever-dwindling free time, you can find him in Beijing’s historic hutongs, playing mandolin or practicing Mandarin.

Rahul- What are the key services your organization provides? How would you describe your target customer and the unmet needs you are serving?
Chris- Vericant helps schools make more informed decisions about Chinese applicants. We meet Chinese applicants in country to record a face-to-face interview, proctor a writing sample and conduct a Spoken English Evaluation (SEE) for each applicant.  The verified interview, writing sample and SEE score are served to our member schools via an Online Portal. Our clients range from boarding schools and undergraduate institutions to graduate programs in the US and Canada.
Our target customers are institutions enrolling Chinese applicants that prefer to have a more complete evaluation of the applicant's abilities.

Rahul- How did the business idea originate? What was the turning point that made you take the plunge? 
Chris- Several years ago, I tried to be an education consultant in Beijing.  As I met with families, many assumed my job was to write the entire application for the applicant, including teacher recommendations, personal statements and adjusting transcripts.  After refusing to polish (how parents refer to falsification) their applications, I visited the US and spoke to schools about this issue. 

Schools were aware of inconsistencies of application materials coming from China, but short of visiting each applicant in China, they didn't have a solution. With this information, I returned to Beijing and assembled a team to explore the situation in more detail.  We boiled down the problem to the fundamental differences between the US and Chinese education systems. Put quite simply, falsification was no fault of the applicants or the schools they are applying to. Teacher recommendations don't exist in China, Chinese standardized testing means class grades are not academic indicators and Chinese schools do not teach creative essay writing.

After testing different solutions, we determined there was no substitute for meeting each applicant. We created a face-to-face video interview experience plus a proctored writing sample to assess off-the-cuff ability.  Our member schools rely on our video interviews and our SEE score to see exactly how a student thinks and acts while interacting with a native English speaker.  By meeting in person, we can verify identification and through conversation and our interviewers are able to elicit an incredible amount of information about English proficiency and the applicant's soft skills.

Rahul- What were couple of key hurdles in building the organization? How did you overcome them?
Chris- 1) Getting our first client. 
This was a very new concept when we began pitching it to schools three years ago.  My task was to find admission officers willing to take a risk to solve a big problem. To do this, I visited over 50 schools over 35 days and racked up a good 3000 miles on my Prius rental. When I returned the car, Hertz looked at the odometer and said "Woah!".

2) Staying focused
When visiting schools, nearly every person had a idea, suggestion or another problem we could help with.  There were so many good ideas, it was tough to remain focused on our core service while we were figuring out if it would work. Thanks to excellent advisors and mentors, "Focus, focus, focus!" is still a mantra in our office.

3) Cross-Border Alignment 
Timezones are an underestimated foe in any international initiative. When your team of 12 is sometimes split across five timezones, it is a real challenge for productivity, alignment and efficiency.  At our Beijing HQ, we have daily alignment meetings for China and weekly RoW (rest of world) full team calls to update on progress and any speed bumps in partnerships, marketing, IT, operations etc. While our system is not perfect, it works and is constantly improving.  Another China specific problem is internet connectivity issues, but hey, that's another reason why schools prefer to use us for interviews intend of Skype.

Rahul- How do you see your organization evolving next three-five years in the context of customer and sector trends?
Chris- Our vision is to have interviews regain prominence in the admissions process. For many admission offices, interviews were likely cut because they were too resource intensive. Technology can solve this issue and allow admission officers to see beyond numbers and an application. For us this means continual innovation to make video interviewing efficient and an effective evaluation tool for both applicants and schools.

Rahul- Based on your experiences, what are two lessons you would give to aspiring entrepreneurs in the field of international education?
Chris- 1) Persistance
As an entrepreneur, the education sector is probably the most difficult sector you could choose. Institutions are slow to change, which makes the sales cycle very long. You must completely believe in your solution and keep at it. If you are looking for the glamorous Tech Crunch start-up life, good luck finding it in education. The education sector it is relationship intensive and not a quick flip.  We've been at it for 3 years and are still very much in our infancy.
2) Show up
There's a great Woody Allen quote one of our first partner schools shared with me: "Eighty percent of success is showing up".  We go to every conference we can, we visit our partner schools and our prospective partner schools.  If I have to make a choice between driving 3 hours to a remote school or having a phone call with them, I make the drive. Always.

Like our video interviews, nothing beats a face-to-face conversation. Not only is it a ton of fun (admission conferences are ALWAYS a blast), but you will make great contacts and lifelong friends.
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July 12, 2013

international education as a pathway for immigrant entrepreneurs

While the immigration reform in the US is overcast with uncertainty, I came across a very interesting blog in the New York Times by Catherine Rampell asking "is it true that immigrants are unusually entrepreneurial?" And the data suggests, yes. The highlights are:
  • Business ownership rate is higher for immigrants than the native-born. In 2010, 10.5 percent of the immigrant work force owned a business compared with 9.3 percent of the native-born work force.
  • Immigrants are also more likely to start a business in any given month. In 2010, 620 out of every 100,000 non-business-owning immigrants started a business each month as compared to 280 for nonimmigrants. 
  • "Immigrants’ entrepreneurship rates are especially high in the engineering and technology sector. About a quarter of engineering and technology companies founded between 2006 and 2012 had at least one founder who was born abroad, according to a 2012 Kauffman Foundation study. In Silicon Valley, the share was 43.9 percent."
  • "More than half of the foreign-born founders of U.S. technology and engineering businesses initially came to the United States to study."
Although the Kauffman Foundation report is a bit dated, it suggests a strong relationship between international students in STEM fields and prospects for entrepreneurship.

Due to the effect of recession, many American college students are heading towards "career-ready" majors like healthcare and business. As a result, share of STEM (science, technology, engineering and math) as a percentage of all bachelor’s degrees have been consistently declining over the years.  While there is demand for STEM majors by the employers, "not all college students have the interest or ability to major in a STEM field." Consequently, there is a short-supply of American students in STEM related graduate programs.

This supply gap in the American graduate programs in STEM fields meets the demand for these programs from international students. Nearly 2/3rd of all graduate students in electrical engineering and computer science in the US are international students, according to NFAP. For some countries like India, this skew towards STEM related graduate programs is very high. Nearly 2/3rd of all Indian students are enrolled in master's program in STEM related fields. No surprise, this is also the group most dominant in the immigrant found ventures related to engineering and technology, according to Kauffman report.

A recent report entitled "American Made 2.0: How Immigrant Entrepreneurs Continue to Contribute to the U.S. Economy " by the National Venture Capital Association highlights the pathways, contributions and challenges of immigrant entrepreneurs. It encourages reforms that can enable innovation in the economy by facilitating global talent retention.

I hope this not so obvious connection between entrepreneurial innovation, especially in STEM related fields and international students is considered in the immigration reform.

Dr. Rahul Choudaha
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July 01, 2013

Making community colleges work in India: Building a community of change to fuel aspirations

What would it take for workforce development programs and vocational education to grow in India? A recent white paper released by Institute of International Education (IIE) and sponsored by the U.S. Embassy in India highlights the potential of learning from and applying the U.S. community college model in India.

The paper includes pieces from several experts. Mary Beth Hartenstine of Community Colleges for International Development in her chapter suggests that "When looking at larger scale, transformative projects, such as those expected to take place in India, U.S. colleges should look to partner through a consortium to alleviate some of the possible burdens of these global development projects." B. S. Panwar of M.S. Panwar Community College asserts that "While the government has taken note of the need for a community college system in India, there is no clear implementation plan. An autonomous agency is needed to act as a link between the government and the community to propagate and implement the community college scheme."

Murli Nagasundaram and Duleep Deosthale of Manipal Global Education Services recommend that "The first step is to establish a task force, consisting of eminent academicians, industrialists, social scientists and advisers from select community colleges in the U.S. and some Indian educators who can look beyond the politics of education, in order to frame a policy and develop an initial plan."  Edward Valeau of The ELS Group, emphasized the role of standards, data-driven strategic planning, learnings from with other countries beyond the US and strengthened governance and leadership structures.

I contributed a chapter entitled "Making Community Colleges Work in India: Providing Access, Fueling Aspirations" where I argue that the reform initiatives need a much stronger structural change to reshape the sociocultural expectations of a vocational education. There is an aspirational barrier among students and families who do not consider vocational education as an economically rewarding or socially recognizable career path.

In addition to policy changes and enhanced public-private partnerships, there are additional areas that need reform. First, there must be more research to understand the students who are most likely to be attracted to the community college. Second, successful exemplars of community colleges need to be established and supported, especially through partnerships with American community colleges, to substantially improve the caliber, capacity and competitiveness of vocational education in India. Finally, an aggressive and transformational marketing campaign that clearly explains the differences and benefits of community colleges should be co-developed with industrial leaders.
As Malcolm Gladwell notes in The Tipping Point, “If you want to bring a fundamental change in people's belief and need to create a community around them, where those new beliefs can be practiced and expressed and nurtured.”  

Community colleges’ growth and success in India can reach a tipping point by establishing a community of change that brings stakeholders from industry, academia and policymakers, establishes models of success and makes students aspire to be part of this community.

Dr. Rahul Choudaha
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