Building a Wharton for Emerging Economies

Sumit Kumar's career was going well in the U.S. After earning a master's degree in biomedical engineering at University of California at Los Angeles and working for a life-sciences consultant in Philadelphia, the 26-year-old native of the eastern Indian state of Bihar decided it was time for business school. Instead of looking at top-ranked U.S. programs, he chose to apply to only one place, the Indian School of Business (ISB) in Hyderabad. "India is a hub for the kind of stuff I do," says Kumar, who arrived on campus to start the new school year in mid-April.

Dean Ajit Rangnekar is counting on students like Kumar to propel ISB into the big leagues of global business schools. Although it opened its doors only nine years ago, the privately funded ISB is No. 1 in India, and Rangnekar believes students and professors interested in business in developing countries will help it rival the world's elite schools. "Globalization 3.0 is going to be all about emerging economies," he says. "We should be known as the best" in such markets, he adds.

Located in a Hyderabad suburb that's also home to a Microsoft research center, ISB is a world away from the dirt and noise of most urban schools in India. The academic complex of pink Jaipur stone sits on a lush campus dotted with magenta bougainvillea and inhabited by peacocks and other birds. The school's 577 students must work two years before applying for the $40,000, 12-month course.

ISB gets seven applications for each slot, so it is building a second campus in Mohali in Punjab. The $50 million project is funded by donors including telecom tycoon Sunil Bharti Mittal. When it opens in 2012 the campus will specialize in infrastructure management, manufacturing, and other subjects relevant to emerging economies. On Apr. 3, Massachusetts Institute of Technology's Sloan School of Management signed an agreement to rotate in faculty for ISB, which also has teamed up with Wharton and the Kellogg Graduate School of Management.

ISB is forging a reputation for advising development projects. Reuben Abraham, a Columbia University PhD, runs its Centre for Emerging Markets Solutions, a think tank that works with a $17 million Indian venture fund backed by George Soros, eBay (EBAY) founder Pierre Omidyar, and Google's (GOOG) charitable arm. Abraham is helping developers come up with business models to provide low-cost housing to slum dwellers. ISB can take more chances than its established rivals, says Abraham, "for the simple reason we have no legacy."

The school attracts recruiters from multinationals such as IBM (IBM) and Procter & Gamble (PG) but finds it hard to lure permanent faculty from overseas. ISB has only 40 full-time professors. Many others want to teach short stints but don't want to relocate to India. Says Rangnekar: "Within the walls of the campus, I can give them a better environment. But outside, I struggle."

With Alison Damast in New York

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