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Home » EU - India relations, International

Developing Higher Education EU India Relations through University Partnerships and Market Entry Strategies

Submitted by on 28 Mar 2013 – 15:29

By Krista Knopper and Frits van Merode, Maastricht University, The Netherlands

With India having the second largest population in the world, 1.21 billion[1], it also is one of the new emerging Brazil, Russia, India, China, South Africa (BRICS) economies and as such an interesting target market for E.U. higher education international collaboration initiatives. It has the fastest growing free market democracy with a rising middle class providing purchasing power. Education is highly regarded, culturally embedded and seen as a ‘product’ that families will always invest in. Increasingly the higher education market in India is confronted with a great lack of quality, capacity[2] and at a political level India feels the urgency to restructure their higher education system[3] to avoid young talent continuously moving abroad for education[4] and jobs.

Although India at this point in time is not very open to foreign education providers, today’s latest national education policies such as the Foreign Education Provider’s Bill might allow foreign education providers to establish themselves in India under certain conditions in the future. At present India is interested to partnering in education and research and as such up to higher education contacts from abroad.

Between the E.U. and India multiple agreements exist to encourage and support international collaboration in higher education at political level yet only active ownership by university leaders and academic staff can make international entry strategies and partnerships work. Many higher education management boards today have international ambitions and additional arguments for pursuing international partnerships can be perceived in changes in the national and global environment. Demographic developments point at Europe’s ageing population leading to a lower influx of students. As non-European students pay relatively high tuition fees, recruitment becomes a survival mechanism to keep numbers of prospective students and project a sustainable financial business model.

At the same time the Netherlands, for example, is faced with insufficient numbers of highly trained knowledge workers to feed the Dutch knowledge economy. Companies are already looking for highly qualified technical talents from abroad. A shortage of talented PhD students and post-docs will have an effect on a university institutions’ motor of innovative thinking. Additionally, the increasing worldwide competition in higher education is making it difficult to keep and attract talent for the own university. Besides these challenges in the global higher education arena, another change affecting worldwide innovation is being observed.

A movement of R&D departments of major university industry partners in research such as Philips, DSM, SHELL, and Unilever are re-locating to emerging economies like China and India. Strategic global business and industrial alliances with India in the pharmaceutical, chemical and the automotive field are developing rapidly. And finally over the past years many Indian and Chinese global companies are setting up shop[5] in Europe and becoming a major competitor in mergers and acquisitions. For example, Mittal took control of the steel consortium Arcelor and Tata bought the Anglo-Dutch steel giant Corus in 2007, the latter resulting in the fifth largest steel company (Tata Steel) in the world.

As these new organisations are relying on global graduates with a broad knowledge, experience and understanding of various continents, cultures and fields of expertise that can function anywhere in the world, today’s European higher education system faces a great challenge.

India is rapidly changing from a student recruitment destination to becoming a comprehensive education partner and as such changing the rules of the game. A European university should be well prepared in partnership strategizing to now do ‘business’ with India. This might be new for both the European and Indian partners.

In the past 5 years, Maastricht University developed an India Strategy, inspired by three main business theories[6] and focusing on the concept of ‘brain circulation’ as well as building long term partnerships combining the best of Maastricht University and India. The strategy links education and research partners, business and industry as well as relevant health sector partners and creates opportunities for training and research as well as employability and innovation. With its strategic alliances the university connects to local markets and local knowledge. The ultimate aim of the partnerships’ work is to share and grow as equal partners and focus on value creation in win-win partnerships. Although both external environmental and internal organisational factors played an important role in the overall building of the strategy, the organisational commitment during the development and implementation stages of the strategy appears to be the deciding factor in the identification of success of the strategy.

Every business strategy needs internal commitment. Yet this business-like attitude in partnership building is new for most European and Indian universities and often not a familiar activity for their members, academics and administrative staff alike. European and Indian universities are for the biggest part financed by government money and as such bound by formal and political limitations to spend money on what might be considered foreign adventures. Universities will need strategies to deal with these internal and external forces.

At the internal commitment level focussing on the following three aspects will ultimately bring success; (1) integration of the strategy into the organisation’s strategic plan; (2) solid processes of strategy development and implementation; and (3) the intensity of allocation of resources such as people, money, time, knowledge and ‘products’.

When building a new partnership and market entry strategy a university will also have to address numerous market specific entry barriers[7] such as, the physical distance between markets, distance because of lack of local knowledge, political distance as not all parties are waiting for you to enter the market and would want to restrain you and finally institutional distance dealing with differences in formal and informal regulations.

Clearly building new E.U. India strategic alliances in higher education as well as starting overseas university offices requires long term time commitment, expert knowledge at home and on the ground in India but above all strong strategic management direction. Strong leadership and decision taking is key with regards to handling challenges and opportunities. Yet what are routine procedures in today’s global companies could become time consuming hurdles in a university organisation with no prime experience and priority objective for partnership and market entry strategy building. Success in strategic alliances can only be measured in a long term strategy as building trust and partnerships takes time. Yet at a time when new overseas markets attract and higher education has become part of the ‘co-operative’ game for human capital, resources, organisation, knowledge and learning, finding a niche area for growth and innovation, available (financial) resources and the right partners to connect to are key to building E.U. India relations and creating organisational commitment.

The biggest challenge in international higher education and thus E.U. India relations will be to change formal and informal institutions, to promote the need for going overseas and take risks as well as partner in a businesslike approach with locals. Thus to follow an ‘pro-active’ business strategy instead of a ‘defensive’ strategy posing restrictions to try to defend a position that can only be defended by staying at home and giving up a future position in a new international higher education market.

 

References

1.       Kickert, W.J.M., Beneath consensual corporatism: traditions of governance in the Netherlands. Public Administration, 2003. 81(1): p. 119-140.

2.       Doz, Y.L. and G. Hamel, Alliance Advantage. 1998, Boston: Harvard Business School Press.

3.       Enderwick, P., Understanding emerging markets: China and India. 2007, New York: Routledge. 249.

4.       Luo, Y.D., Capability exploitation and building in a foreign market: Implications for multinational enterprises. Organization Science, 2002. 13(1): p. 48-63.

 

 

 


[1] Government of India, Ministry of Home Affairs, Census India 2011, http://www.censusindia.gov.in/

[2] Recent figures show that in 2020 India will have the highest number of university age (18 to 22 years) population well ahead of the US, China and Brazil UN Population division, Oxford Economics for a Pearson HE policy blog; ‘the five trends shaping higher education’

[3] For example,  to illustrate in the last two five year plans, the 10th (2002 – 2007) and 11th (2007–2012) of the Planning Commission India committed to setting up 20 new IIIT’s on a PPP (Public Private Partnership) model

[4] Over 190,000 students from India go overseas for university education every year; most of these are graduate level students and ready to spend at least around Rs 10-12 lakh[4] (€ 15.290 – 18.360) per year.

[5] In 2011 in the Netherlands alone a total of 119 Indian companies with 149 establishments have settled in the greater Amsterdam region. Source; Netherlands India Business Meet (NIMB), 21 September 2011, presentation Ministry of Foreign Affairs of the Netherlands, Bob Hiensch Ambassador of the Netherlands to India.

[6] The Maastricht University India Strategy was primarily inspired by three business theories: ‘Alliance Advantage’ from Doz and Hamel (1998), ‘Understanding Emerging Markets’ on market entry theory from Enderwick (2007) and Capability exploitation and building in a foreign market: Implications for multinational enterprises, in Organization Science on resource availability from Luo (2002)

[7] Four market entry barriers for the area of higher education can be identified; physical distance, knowledge distance, political distance and institutional distance. Source: Knopper, K. and F.v. Merode, International entry strategies in higher education, in Proceedings of the 6th QS-APPLE Conference Singapore, 17th -19th November, 2010, N. Anderson, Editor. 2011, James Cook

University: Cairns. p. 39-52.