The latest news from Michigan State University is scaling back its operations in Dubai only underlines something we know all too well: internationalization is difficult. Many, many universities are looking to set up overseas operations but the barriers to successful operations overseas are legion. Here are five.
First off, there is a problem of funding. Barring the lucky few, most universities are marginal financial operations, producing but a small surplus on turnover. Thus, the amount of spare cash that they have at their disposal at any time is often remarkably small. Of course, it is always possible to borrow but sometimes that simply compounds the problem, exposing the institution to even more risk. Even when host governments lay out capital for basic physical infrastructure, financial risk is often compounded by credit risk.
Second, host governments often want quick results and only rarely are willing to fund lavishly. When results aren’t forthcoming they can become impatient. So political risk is always a factor that has to be considered too.
Third, the market for students who wish to attend these institutions and are of the requisite quality is often uncertain too. All the demand analyses in the world cannot get over the fact that what is being attempted is as much to form a market as to respond to it and this is always risky since there is no reliable means of counting something in formation.
Fourth, finding staff who want to teach overseas can be challenging. Different universities have tried different tacks but the fact is that all strategies tend to be expensive.
Fifth, it is easy to produce managerial stretch with top managers spending so much time setting up overseas that they have no time left for home duties, so to speak.