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NYU - the Global Network University

By Benjamin Steinsieck, Vikash Sharma, Erin Keefer, Matthew Miller, Tala Soubra, Clay McCarter

Tradition has it that the main gate at Brown University is opened only twice a year; once in the fall to allow new students to enter the campus, and again in the spring to allow graduating students to pass out into the wider world armed with an education from one of the world’s great universities. But is the notion of the leafy, cloistered university outdated?

On the face of it, many of the world’s most venerable academic institutions haven’t changed much in the last hundred years. But the world certainly has. Technological advances and shifting political climates mean that information and commerce know fewer borders. Today’s college students demand institutions that will prepare them to become residents in this new global community and businesses demand a workforce that is globally intelligent.

In response, many universities in the United States have embarked upon various projects designed to “internationalize” the educational experience. These typically include direct student and faculty exchanges with foreign universities, study abroad, international student recruiting, and research partnerships with foreign academic and research institutions.

The globalization of education is not purely a US experience. The Bologna Process seeks to establish uniform academic standards in higher education across Europe and greater convergence with North American standards – the ultimate goal being to help facilitate student exchange. The Erasmus Agreements in Europe allow students in Europe to cross-register at one of many participating institutions throughout the region. And Asia-Pacific nations are additionally beginning to look at ways to increase student mobility in the region.

More recently, some universities have tested the idea of liaison offices abroad. These multipurpose centers serve to facilitate international recruitment – an important source of tuition revenues, opportunities for study abroad, faculty research, foreign giving, business partnerships, and connections with an increasingly globalized and globally mobile alumni base. But these efforts can be costly and difficult to manage. And the global economic downturn has forced many universities to scale back some of these activities.
NYU – the Global Network University

In contrast, New York University has taken a very different approach. Under the leadership of university President John Sexton, NYU has embarked on an aggressive, controversial plan to become what Dr. Sexton calls a “global network university.” The way he sees it, the old gated campus model is inadequate at serving the global citizens of tomorrow where culture, talent, and ideas flow freely.

Over the past 10 years, data shows that the number of students who attend college outside of their native country increased by 57 percent, and is expected to triple by 2025 (chronicle.com).

Key target demographics will include catering to non-US students who are looking to attend these schools for graduate degrees in science and engineering (Proquest).  Will there be challenges for students attending college outside their native country? Of course.  John Sexton describes the concept of provincialism, “as people are forced out of their comfort zone, there is bound to be resistance.”

Rising incomes in developing nations have spurred increased demand for higher education from US colleges. But given hostile political rhetoric, anti-immigrant sentiment, and increased visa restrictions post 9/11, many of the world’s best and brightest faculty and students no longer feel comfortable coming to the States. And for many emerging economies, building world-class universities at home is critical to preventing brain drain by keeping promising students and researchers from taking their talents overseas. And so, Dr. Sexton argues, universities have to go abroad themselves or risk losing their competitive advantage.

In September 2010 NYU officially opened a new fully-fledged campus in Abu Dhabi, financed almost entirely by the emirate. And in January of this year, NYU announced it had come to an agreement with China’s Ministry of Education to open a third campus in Shanghai. Dr. Sexton is fond of saying that just as NYU students choose what courses to take, they’ll also be able to choose where in the world to take them – either through direct enrollment at one of its three full-fledged campuses, study abroad through one of ten centers worldwide, the School of Law and Tisch School of the Arts in Singapore, or online.

For NYU the potential benefits are astounding. Setting up overseas campuses provides access to a global market with myriad of opportunities for students and faculty to expand their knowledge base, foster innovation, make global connections, enrich the educational and cultural environment of NYU, and strengthen the value of the NYU brand. And there’s an upside for the host countries as well. International students are provided access to a top tier American university without having to go to America and drain their homeland of their competitive skill sets.  But there are significant challenges, and NYU’s plan is not without controversy.
Globalizing higher education is a complex initiative with complex challenges at the macro and micro level. Macro level challenges include economic and political factors while micro level aspects include home based reaction, degree of localization, and social factors.

The above mentioned challenges will be illustrated through NYU’s expansion to Abu Dhabi, which began operations in September 2010. NYU was given a $50 million grant by the government of Abu Dhabi to fund NYU Abu Dhabi. This gift caused significant backlash, with some arguing that dependence on oil money would limit the educational freedom of the university and that the lack of the Emirates diplomatic relations with Israel was cause for concern. The degree of success for any organization expanding globally can be directly attributed to the extent to which it localizes into its new environment. The challenge is finding the right degree of localization that is still in line with the university’s core image and long-term vision. Entering the Abu Dhabi market presented significant challenges, including cultural dissimilarities, brand imaging, and student satisfaction.

NYU’s primary campus, in Greenwich Village of New York City, was considered to be open and diverse, with students representing the far corners of the world.  The recent expansion to Abu Dhabi in 2009 and plans to open a Shanghai campus in 2013 represents the next steps in NYU’s global education strategy.  NYU already hosts study abroad programs in Accra, London, Madrid, Paris, Prague, Tel Aviv, Berlin, and Buenos Aires.  NYU is among a growing list of universities expanding abroad. Ohio State is in Shanghai and is planning for openings in India, Brazil, Turkey, sub-Saharan Africa, and Europe (chronicle.com).  INSEAD will be also adding Abu Dhabi to its two business school locations in France and Singapore.

The underlying logic for NYU’s global campus strategy is in response to demands by the customer. Students want the prestige of a globally recognized university, while having the opportunity to be completely immersed in a local culture, whether it is France, Shanghai, or Singapore.  These ventures will only be successful if they acclimate to the local culture, such as students and professors have done at NYUAD, where public displays of affection between separate genders are prohibited by law.  Learning and understanding the cultural and business nuances in these “glocations” will prove to be the most important requirement for NYU and any other university looking to globalize.

NYU’s initiative is incredibly ambitious but it is not the first of its kind nor is it the first in the UAE. Within the context of the UAE there have been two notable failed U.S. experiments. George Mason University and Michigan State University both experienced failures while trying to expand to the UAE. In both cases the ‘year zero’ challenges were cited as major stumbling blocks for their initiatives.  The ‘year zero’ failures occurred because these institutions did not have models that were designed to account for an entirely new initiative.  Higher education often relies on existing relationships with students, professors, and existing brand recognition to be the main driver of enrollment.  In ‘year zero’ these schools needed to set lower initial expectations and invest more in creating stable partnerships.  Both schools expected their initiative to be an instant success and the failure to achieve this resulted in an early withdrawal.

There are key differences between NYU's model and that of Michigan State and George Mason that position NYU for success. NYU intends to fully integrate its UAE and Shanghai campuses into NYU operations. These sites aren't merely outposts meant to serve local populations; they are fully-fledged NYU campuses meant to provide all NYU stakeholders with greater opportunity for international study and research. NYU states publicly that rather than jumping into foreign markets quickly, it is taking a more thoughtful approach, committed to making their international campuses successful.

NYU has achieved success in the UAE because it integrated the cross-cultural nuisances into their expansion strategy.  Rather than opening a liaison office overseas, NYU invested both human and financial capital into developing an autonomous campus that provided a competitive advantage to the global student, whether American, Emeriti, or any of the countless nationalities that demanded a world class, global education.  NYU’s vision is unique in that it seeks to create a truly global university with campuses around the world that are given the freedom to integrate with the local culture to create a truly global experience.

This report was a group project for the Global Strategy class of Thunderbird School of Global Management Professor Nathan Washburn, Ph.D.