Is the IIM Indore UAE campus going to shut down?
A little bit of background will help so I will start with that. We had started the PGP UAE program over 3 years back. The idea was to internationalise our programs from the point of view of having an overseas location as well as having an access to overseas students. We were looking for a place where the IIM brand would be known and communicate value, so the Gulf area was an obvious choice.
We had started 2 programs- one is our regular 2 year PGP and the other one is PGP MX which is a weekend program. These are the 2 programs that we have been running in UAE.
Originally, we were running these programs in Ras al-Khaimah. And subsequently, we had shifted the programs to Dubai where it was more convenient for the students. Our model in UAE was essentially an “asset-light” model. - We have a local partner for infrastructure and knowledge of the local market there and we provide the intellectual capital.
Over the years, we realized that in terms of the regulatory structure in UAE, the government preferred organisations which set up their own physical infrastructure like SP Jain, IMT and others, who have their own physical campus. But, we found that actually setting up physical campus in UAE did not make economic sense to us.
One more thing I should mention is that our weekend program attracted students who are residing in the UAE but the regular PGP program attracted students who primarily belonged to India. Therefore, one of our objectives of internationalising our student body was not happening as a result of this PGP Program since the students belonged to India only. The only internationalization mission being fulfilled was that we had an external location which was good because it gave us some exposure to the International market. But, at the same time the other objective of having an international student body was not met.
I would also like to add as to why are we facing hurdles in getting international students - IIMs don’t have degree granting status, so we are only able to offer our PGDM (post graduate diploma in management), which is of course very well regarded within India but is not well known abroad. But all the other institutions in the UAE are offering degrees. It appears that till the time we get degree granting authority, we will not be able to attract any international students to our programs there.
So based on these 3 reasons- the general regulatory climate in the UAE , difficulty in getting a genuinely international student body and the degree granting status of IIMs, we decided to discontinue our operations there after this batch is over.
Are both the programmes halted at the UAE Campus or the PGP course specifically?
Right now the immediate impact is on PGP because we did not make any admissions to PGP this year and the previous batch which started in 2013 will be completing in March 2015. So the PGP program will be coming to an end for now. there is nothing as such to stop us from continuing the weekend program. We have to decide whether we want to continue or not.
Is there a revival plan in the future?
I don’t think one can say that this decision has been taken for all time to come or something like that but certainly as of now we are closing the program. We don’t have any immediate plans of starting but things could change, for example - if we get degree granting status then we could reopen and then we could do more genuine internationalisation. Then, we also have to look closely at regulatory and other structures.
Unlike some of the other schools we are not a business entity We are not really trying to show that we can have more campuses and more students. We have some other objectives in mind and unless those objectives are met, it doesn’t make much sense to us to make our presence there.
Also, we have certain constraints as well–The first is if you want to make physical investment there, is the resources required are quite substantial and we are not sure about the viability of that. Second, we need lots of government approvals if we want to make any capital investments abroad and we are not sure what all would be required for that as no Indian institution to the best of our knowledge has done that before.
Does this development make it tough for IIMs to look at satellite campuses abroad in the near future?
It goes back to what I said earlier. First our status in India needs to be clear. Once we get authority to offer degree here, then our ability to offer full time programs abroad becomes much better. Because once you go to a foreign place they immediately want to know yourstatus in your home country - There are many questions asked on the authority, statutes, etc, so the degree granting status will definitely help us look at internationalisation in a positive way. Also, the government policies regarding overseas investment is not clear. It is not prohibited; on the other hand it is not clear what we need to do to get permissions.
Under the present “asset light” arrangement, we got permission from the government of India but that came through since there was no capital expenditure involved. It was an arrangement with the local party on revenue sharing and there were some expenses that were incurred by us. I could be wrong, but I am not aware of any Indian Institution that has made investment overseas unless it is supported by the government itself. Sometimes as a part of some treaty or co-operation agreement with other countries government undertakes, , activities in other countries as a sponsor. But in the absence of such an agreement there is no clear policy as to whether we are allowed to do such investment abroad or not. In any case, as the economiccase does not look very strong, we don’t feel very inclined to try it out.
Do you think it raises a question mark on the ability of IIM Indore to undertake such audacious goals in the future?
I don’t think so. I think we were perfectly able to run the program there. We were able to offer a high quality program and get good students. We were able to manage quite well. As I detailed to you, some other issues need to be ironed out if you want to run overseas campuses on a long term basis.
(as told to Shiwangi Sahu)
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