A Potentially Extractive Relationship: American Universities and India

Just like our big, (once) strong multinational companies, American universities and research institutions also look to emerging markets for growth. Whereas corporate interests seek new customers, economies of scale, more efficient inputs, and cheaper labor, U.S.-based research universities look for student talent, well-trained faculty, and in some cases, opportunities to uncover new discoveries, products, and ideas. However, while universities are supposed to be tax-exempt institutions designed to provide education resources to its customers, many of them have been heading overseas with more than social enterprise on its mind. In today’s financial climate, it’s the universities that have cash, even if their endowments are down, slightly, and while they try to ink big contracts with oil-rich countries insulated from the current downturn, or sign MoUs with Tsinghua University in Beijing, the majority of them have their eyes set on India. Here’s why…

India’s school system, though far from perfect, is based on the British model. The majority of students are able to read and write in English. There is a strong network of colleges and elite professional schools, many of them with historic ties to U.S.-based institutions. Both countries value education extremely highly within their societies. India and the U.S. are on strong diplomatic footing and will continue to be for a good time to come. Despite the fact that there are 10,000 miles separating them, American universities are instinctually drawn to their Indian counterparts in order to further some of the institutional opportunities that India as a country can provide through partnerships, such as:

  1. Access to new students: Elite institutions look to India to increase their undergraduate pool and also pluck the best graduate talent, for whom they provide full PhD scholarships.
  2. Establish groundwork for exchanges: Universities want to provide their students with an opportunity to study overseas at comparable institutions, and the same goes for faculty in most disciplines.
  3. Access to new faculty: Faculty relationships provide U.S. universities with access to better data, newer insights from India, and in some cases, access to cheaper teachers should they be qualified to teach in America.
  4. Access to new curricula: This is, in my opinion, the single-best reason partnerships between the U.S. and India exist. In America today, curricula in many disciplines is due for an overhaul, though simultaneously, experts are not entirely sure what to replace it with. In India, U.S. universities have access to an environment that’s changing so fast that the curriculum has no choice but to keep up.
  5. Deeper networks into government and industry: Most of the elite schools have some alumni and/or family connections to key government players and industry titans, but high profile school partnerships provide legitimate cover for institutions on both sides to deepen ties with state-level and local politicians, as well as to provide entryways into corporations for students.
  6. Ability to establish research centers: American universities, with the help of their Indian partners, can establish joint (or independent) research centers in India that act as enclaves and clearing houses for U.S.-based faculty and students who wish to conduct primary research in India. The Centers act not only as a repository for data, but also for formalizing connections with industry and the press, turning it into a satellite office, of sorts, for the school to use.
  7. Ability to design innovative research collaborations: There are countless research “synergies” that American faculty and students combined with their Indian counterparts could uncover. With all of the multidisciplinary problems facing the world today, it’s easy to envision collaborations in public health that investigate demographic trends or in engineering that create linkages between schools’ licensing and technology offices.

Currently in India, no foreign institution is permitted to grant a degree. This law governs the Indian education environment and forces U.S. institutions to seek India partners rather than carve their own niche. Given these dynamics, typically the American university will lead in India through an initiative that’s associated with its business school, at times done in collaboration with another professional school. In these situations, the U.S. university, usually behind a world class brand name, will eye a partnership with an institution in India that is of similar caliber. The overtures begin with faculty interchanges to build understanding and if all goes well, a “Memorandum of Understanding” is drafted. As soon as the MoU is signed, the PR machines of both schools seek press to promote the union, and plans for student exchanges, faculty immersions, and new research opportunities.

While all of the partnerships I’ve seen have been carried out with integrity, I have noticed that, from time to time, U.S-based universities attracted to India sometimes enter into partnership agreements that are either bidirectionally extractive in nature rather than built with a clear focus on collaboration. The analogy here would be a mining firm that is expert in recovering a certain rare metal that happens only to be in India. Typically, the firm will enter into an agreement with the hopes of mining as much of the resource (and profit) as possible. Or, in life sciences, drug firms will seek rare elements for “natural products” only available in India, but sometimes not account for the proper backchannels that these discoveries should benefit all parties involved.

Therefore, when involved in these strategic choices and negotiations, I always advise my clients to enter into equal and fair partnership arrangements that promote collaborative behavior and neutralize both sides’ instinct to extract. To be fair, in any university partnership, both sides are using each other, whether for brand cache, tuition dollars, or some other end. In those discussed here, the same is true, and that is OK. The key for U.S. universities, however, is to recognize this and build strategies that take these factors into account.

While most U.S.-based institutions are used to hawking their name, services, and network to countries that have tremendous financial resources, in India, the game is not to increase revenue or even generate profit. In fact, many partnerships and programs conducted in India by American institutions are revenue negative and conducted at a loss, economically speaking. Very few universities could expect to enter the Indian market with the hopes of realizing a profit. Yet at the same time, just the prospect of hitting pay dirt, striking gold lures professional schools from business, law, medicine, engineering, and government to take their chance. And, perhaps one day soon, this all could change, as the Indian Government has already signaled that they may permit foreign universities to grant degrees on its soil. If and when that day comes, you’ll a gold rush of activity in what is arguably education’s fastest growing market.