July 23 (Bloomberg) -- Singapore’s efforts to become an Asian center for higher education was dealt a blow this month when the school with the top-ranked MBA program said it will relocate to Hong Kong.
The University of Chicago, whose executive MBA program was ranked No. 1 by Bloomberg Businessweek last year, said July 10 it’s relocating to be closer to China. That came after New York University’s Tisch School of Arts and the University of Nevada, Las Vegas, or UNLV, said there are plans to close their Singapore campuses in the next two years.
“There will be a negative impact in our quest to be an education hub to attract and keep world-class schools here for longer,” Inderjit Singh, a lawmaker who’s a member of the Government Parliamentary Committee for Education, said in a phone interview yesterday. “We’ll have to assess the reasons why they are leaving.”
The city has been increasing its reliance on higher education for more than a decade with the goal of boosting the number of international students to 150,000 by 2015 and raising the sector’s contribution to the economy to 5 percent. The government said the industry made up 3.2 percent of gross domestic product last year.
Singapore faced an initial setback in 2007 when Australia’s University of New South Wales shut its campus on the island after a semester. The government said it handed out S$32.5 million ($25.7 million) in loans and grants.
In November, Tisch said it will close its Singapore campus as early as next summer because the New York school’s subsidies to operate it were expected to exceed S$30 million by August.
Richard Linstrom, associate dean at UNLV’s Singapore campus, said in a phone interview today it’s “highly likely” the school will shut the location and move to another Asian city, adding that Macau is an ideal location.
“These campuses face the reality of making ends meet on their own after the reduction or withdrawal of these subsidies,” Peter Waring, Singapore principal at Murdoch University’s tie-up in the city, said by phone.
Property prices remained the “biggest problem,” for the foreign universities, Singh said. The strengthening Singapore dollar exacerbated the loss of cost competitiveness, he said.
Singapore was ranked the 19th-most expensive office market in a June report by brokerage CBRE Group Inc., ahead of Zurich and downtown Manhattan. The Singapore dollar was the fourth-best performer among 18 of the world’s major currencies tracked by Bloomberg over the past four years.
The city has lured Duke University, James Cook University, Digipen Institute of Technology and SP Jain School of Global Management. Insead, the French business school with the No. 2 international MBA program as ranked by Bloomberg Businessweek, set up its Asian campus in Singapore in 1999 and said this year it’s adding a Master in Finance degree course.
For Singapore, the goal of drawing leading universities has been achieved, said Alvin Tan, an assistant managing director at the Economic Development Board, the government’s investment agency. The new focus is the quality of education and relevance to the economy, he said in an e-mail.
“If a branded school is unable to persuade its students to pay their market fees, then it suggests that the brand may not be so attractive after all,” Lim Biow Chuan, chairman of the Government Parliamentary Committee for Education, said in an e-mailed response to queries.
Yale University, a member of the Ivy League of eight private U.S. colleges, is opening a liberal arts campus in Singapore next month, the first overseas location in its 300-year history.
The venture with the National University of Singapore drew criticism from Yale professors who raised concerns about civil rights in Singapore, where the government has restrictions on public assembly and speeches. Yale said it will ensure its Singapore campus won’t impose censorship.
“It’s probably time for Singapore to reinvigorate its approach to high-quality foreign universities,” said Jonathan Galaviz, interim dean of UNLV’s Singapore campus in 2011. “To create big ideas, it must have a locally vibrant university scene that treats non-profit foreign universities just as well as its own local universities.”
International student enrollment at private schools shrank 11 percent to 40,320 in 2012 over three years amid stricter regulations, a government statement showed.
“The reduced focus on international students means that schools need to make more of a living from the domestic market, and many of them have come to the conclusion that they can’t do that,” Waring said.
The University of Chicago will move its Asia executive MBA program to a former Hong Kong detention center for political prisoners. The city was named third-best for overall returns from an overseas education in the Economist Group’s Sea Turtle Index. Singapore was ranked 12th.
“There is no doubt that Hong Kong provides a more dynamic vibrancy in Asia than Singapore does, particularly in its relationship to mainland China,” said Galaviz, who heads his Las Vegas consulting company Galaviz & Co. “It certainly says a lot for one of the world’s leading business schools to make an affirmative decision to pack up and leave.”
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