I mentioned before that it has been difficult to find out the real reasons for the UNSW Asia closure in Singapore in May this year. The University of New South Wales has not exactly followed a transparent strategy in this issue (for my interpretation of the events, look at this post).

A similar level of secrecy seems to be applied to the further handling of the case. This week the Singapore Straits Times reported that the University of New South Wales has agreed to repay some 25 million Australian dollars to Singapore.

The Singapore Economic Development Board said that UNSW has signed a ‘settlement agreement in respect of all outstanding loans and grants payable to the Singapore Government’. Both parties (EDB and UNSW) however declined to comment since they ‘are bound by the terms of agreement which are confidential’.

This makes the issue that I put forward earlier even more pressing. How do we deal with the private ventures of public institutions? Shouldn’t a public university be held publicly accountable for its risky private operations overseas? Clearly, transparency and public accountability are not high on the priority list in the aftermath of the UNSW Asia debacle…

Last month’s Far Eastern Economic Review included an article by Simon Montlake on Singapore’s Global School House strategy. The strategy has been formulated to contributes to Singapores development as a regional and global hub for research and development and – in Montlake’s words – to shed a reputation as a stodgy, scripted society, where creativity is dulled by overzealous government regulation.

The strategy targets a growth in foreign students from 80,000 now to 150,000 by 2015. This growth obviously cannot be solely absorbed by Singapore’s two major universities, NUS and NTU and therefore Singapore is creating linkages with foreign partners. Not just out of necessity, but – according to Montlake – also as a matter of prestige:

Singapore also wants to tap this growing market. While its homegrown universities have some appeal to other Asians, a far juicier prize is to partner with a prestigious Western school, essentially outsourcing world-class education to Singapore.

He states that, since 1998, around 16 universities have forged linkages with local institutions, typically in the form of joint graduate programs. In a recent article in the journal ‘World Development’, Kris Olds (University of Wisconsin and Global HigherEd) identifies 25 of such ventures (click picture to enlarge):

Most of these initiatives are modest in scope, and several have been successful. However the Singapore government has slowly been expanding its ambitions by luring whole foreign university campuses to the country. Montlake observes that this has presented slightly more difficulties for the Singaporean government:

Persuading Harvard to open up in Singapore—and dilute its premium brand—sounds like a pipe dream. But surely other, less haughty foreign universities could be induced to take the plunge, given the right incentives and a forward-looking strategy? Singapore has never made any secret of its large financial resources and its willingness to use them to promote industries in which its governing elite believe it has an edge over competitors, such as biotech and environmental services.

I’ve written several posts on the developments in the past years. The University of Warwick declined Singapore’s offer to establish a campus in Singapore (due to worries about academic freedom and financial risks) while the University of New South Wales did proceed with the venture, but ultimately had to close its doors after three months in operation. In my latest post on the issue I have tried to give some explanations for the UNSW Asia debacle but attributed the failure mainly to an internal conjuncture of events, mainly the combination of overambitious managers and frequent change of leadership. But these explanations leaves open the question why the global schoolhouse strategy is moving forward so difficultly.

Montlake seems to point to the specific characteristics of the Singaporean case and questions the viability of the Singaporean strategy:

For all the money it showers on arts and culture and promoting multicultural events, Singapore’s main pastime is still shopping. Perhaps it needs to take more seriously its campaign to make the city fun. Decades of single-party, paternalist government has bred political apathy. Singapore wants to attract foreign talent, but doesn’t let its own citizens speak out of turn.

Olds applies a broader perspective and questions the viability of institutional globalization in general:

…the failure of the Singaporean Economic Development Board to convince globally recognized research universities (e.g., MIT, Stanford, Imperial College), as well other research active universities (e.g., the University of Warwick, LSE), to establish overseas campuses in Singapore highlights a disconnect between Government of Singapore policy goals and the reality of institutional globalization in higher education at this point of history.

I myself have been skeptical about universities establishing branch campuses in countries where governments cannot guarantee academic freedom and other basic principles such as the equality been men and women (for instance as is the case in higher education in Saudi Arabia and KAUST). On the business side of the story, my skepticism is at least as big. Especially in the case of public institutions, steps to start operations across borders need to taken with caution. The losses of failed ventures abroad will eventually be passed on to the students.

On the other side, there are clear mutual benefits that can come out of these initiatives. Importing countries can expand their access to higher education and improve their quality. At the same time, exporting institutions can utilise their expertise to do this efficiently and use their legitimacy to do this according to their own principles and act as a driver of change.

(update below) Fred Hilmer, Vice-Chancellor of the University of New South Wales, looks back on the UNSW Asia debacle. One of the question that I asked in my post immediately after UNSW’s announcement was about the real reason for UNSW’s sudden departure. Much news has been reported since, but none of the explanations can fully explain it. Hilmer points to the low enrollment numbers as the reason and the fact that the Singapore Economic Development Board wasn’t willing to accept their rescue plan.Today it was also reported that high fees led to the fall of the Singapore Campus. This has been said by many others but it can’t be a sufficient reason. Other senior academics at UNSW Asia blamed a lack of marketing for its demise. Sure, this might be part of the explanation as well. Simon Marginson of the University of Melbourne University explained that the business plan was plain bad and based on too rosy a set of enrollment projections.

I think we have to conclude that there is not one single reason for UNSW’s pull-out. It is more a concurrence of circumstances that led to a major fiasco. But why hasn’t this been foreseen by a big professional organisation like UNSW? Hilmer basically inherited the whole situation and the only thing he could be blamed for, is for opening the campus at all at the start of this year. The establishment of the UNSW Asia campus of course goes further back in time. At least until 2003.

It is interesting to see that the whole development of the UNSW Asia idea has coincided with a period of rather unstable governance. For a period of ten years the university was under the energetic leadership of John Niland. Niland has a good relation with Singapore and extensive knowledge about the region. He is currently Member of the Board of Trustees of the Singapore Management University. However, keeping in mind that UNSW was only approached by EDB in 2003 to consider setting up a campus in Singapore, it is unlikely that Niland was involved as a VC.

This means that the whole process, from EDB invitation to the closure in May 2007, took place in no more than 4 years. In these 4 years however, the UNSW has had 3 Vice-Chancellors! The first contacts with EDB have been with Rory Hume, now Provost at the University of California. Hume became VC in 2002 and resigned in 2004, because of the way he handled a case of academic misconduct in the university. Hume’s successor was Mark Wainwright who held the VC Office from July 2004 until his retirement in June 2006. This must have been the period where the main negotiations with the EDB have taken place and where the plans for the campus were formed. It was under Wainwright that UNSW Asia was officially launched, that Greg Whittred was appointed president of UNSW Asia and two deputy presidents were announced.

So in 2006 Fred Hilmer left his position as CEO of John Fairfax Holdings and became VC of UNSW. When he came into office, UNSW Asia basically was a ‘fait accompli’. Hilmer has never been a true believer in the Singapore venture, but he did not really have the option to pull out since all agreements were made and everyone was set to go. The Singaporean Strait Times (26 May, 2007) reported that ‘the death knell for the Singapore campus was sounded the very week that Prof Hilmer took over on June 19, 2006′. He pulled out eventually because financial risks would steeply rise with the construction of a city campus in 2008.

A leading actor in the whole saga – and the one that actually signed the MOU with the EDB in April 2004 – is Former Deputy VC for International & Development, John Ingleson. He held this position since 2001 and was also CEO of the international education, training and consultancy arm of UNSW, New South Global. While he was an outspoken advocate of UNSW Asia – and of global academe in general – he seems to be the most silent factor in its aftermath.

Ingleson left UNSW after vice-chancellor Fred Hilmer restructured the university’s top level a year ago. He is now Deputy VC I & D at the University of Western Sydney and also member of the Board of Directors of IDP (a company offering student recruiting and testing services and is part-owned by the Australian universities). The same company also undertook a program-level marketing research for UNSW Asia and was the exclusive recruiter of international students for UNSW Asia.

My two cents? A bad business plan, pursued by an over-enthusiastic DVC who overestimated economic opportunities and underestimated risks in the global higher education market. While there were plenty of reasons to slow down the development of UNSW Asia and the individuals pushing it, this never happened because clear and stable leadership at the very top was lacking at that time. By the time Hilmer inherited the situation, it was a done deal. He tried to make a deal with the Singaporeans but they didn’t bite. Option 1: run the risk of even higher costs because of the construction of a campus; Option 2: get out, now costs are still bearable. May 23…Press conference…option 2…closed.

UPDATE 18 July: Rory Hume, in a letter to The Australian, argues that the decision to start the Singapore Campus was not made in haste. He explains the events until he left to the US. What happened afterwards?

I do not know what happened during the following three years as UNSW worked to finalise a business plan and arrangements in Singapore to enable the project to succeed.

If it’s true that Hume has indeed been very careful in making the decision, my interpretation would be that the crux has been in the negotiations with the EDB. Agreements made in these negotiations – by Ingleson, probably – have been re-evaluated by Hilmer when he came to UNSW.

To the commentators below: Anonymous, I still don’t think that the whole UNSW disaster can be attributed to Hilmer. Hume’s letter ssems to support that things went wrong in the negotiations between UNSW and EDB. Paul: I think that my update above strengthens your point even further. And Jon: I don’t know if it was bound to fail, but under the existing agreements it probably was. In general you can observe that it is very hard to make a viable business model for overseas branch campuses.

After three months in operation, the Singapore adventure of the University of New South Wales has come to an end. Another 22 million Singapore dollars down the drain. The decision to establish a branch campus in Singapore was taken in 2005 and already led to some commotion at that time (see this post). In 2005, UNSW from Australia and the University of Warwick from the UK were the only two foreign universities granted special status by the Singaporean Government (through its Economic Development Board, EDB) to set up a fully fledged independent teaching and research institution offering undergraduate degrees (the UNSW ASIA website has been taken down but click here for some info from the old website and here for some facts).

At that time, the senate of Warwick declined the offer of the Singapore government. The official reason for the Warwick senate to vote against the venture was the big financial risk. An additional reason however was the concern about the lack of academic freedom. UNSW had a different opinion, after all there was “no such thing as absolute freedom of speech in any country”.UNSW opened the doors of its Asia Campus at the beginning of the 2007 academic year, planning to reach a population of up to 15,000 students on the long term. But the campus will be closed down after only one semester:

Before making this decision, the University has explored an extensive range of options. However the enrollment numbers for 2007 did not meet our expectations, and this has caused us to revise our projections. The decision to close down is a difficult one but it is the prudent course of action to take.

UNSW Vice Chancellor, Professor Fred Hilmer inherited the situation when he became VC in 2006. In a press conference in the Straits Times video news he explains the UNSW decision to pull out (see the whole video here):

The economics of the campus, without significant support made it impossible to continue. While we had support for the initial concept from the EDB, as the enrollment played out and as the concept had to be changed, the risk of the venture increased.

The Economic Development Board stated that it regrets the decision of UNSW. Mr Ko Kheng Hwa, Managing Director, EDB said:

We regret that UNSW has decided to close the Singapore campus. EDB has been fully committed and has worked closely with UNSW from day one towards the establishment of its Singapore campus. EDB will push ahead with our efforts to realise Singapore’s Global Schoolhouse vision. We are fully committed to developing Singapore into a premier education hub comprising a rich diversity of high quality education institutions and programmes from all over the world.

UNSW Asia had only 140 students enrolled in its first semester, 100 of them being Singapore residents. The University had a target of 300 students for the first year. This all leaves me with two big questions:

1. What is the real reason? If the target was 300 and the enrollment was 140, would you stop an operation – that has been planned for two years and in which 17.5 million Australian dollars is invested – just after a few months? Of course not! This is just too abrupt. After investing this amount, you would at least try for a few years. Somehow I have the idea that there is more going on, but I can’t figure out what it is.

2. Public universities and their private ventures. I am sure that UNSW and UNSW Asia keep separate books. But somehow UNSW, an Australian public university, will be affected by the costs of the Singaporese adventure. This discussion has come up in relation to the South African branch campus of Monash university as well. It clearly shows the risk of letting public organizations operate privately overseas. Of course, UNSW will argue that their Australian activities will not suffer from the UNSW Asia debacle. But the money has to come from somewhere. The costs are even likely to rise because UNSW has been so decent to offer their UNSW Asia students a place at UNSW in Sydney and will make scholarships available.

Two pressing questions. Whether we will ever know the answer to the first one? I don’t know. But I hope the second one will be discussed because it addresses a fundamental issue.

UPDATE: look at this recent post for some explanations