One of the first top business schools gunning to set up an India campus following the expected passage of the Foreign Educational Institutions (Regulation of Entry and Operations) Bill in the Indian parliament is the Canada-based Schulich School of Business, York University, Toronto. Ranked number 10 globally in The Economist’s fulltime MBA rankings 2010, Schulich has already started work on a campus in Hyderabad in association with infrastructure company GMR Group (better known as the developer of the modernized Hyderabad and Delhi airports). The Schulich School of Business, Hyderabad plans to start offering a fulltime 2-year MBA starting 2012.

PaGaLGuY met Schulich’s Dean Dr Dezso J Horvath in Mumbai in order to understand the school’s motivations behind opening an India campus and how foreign b-schools entering India will differentiate themselves from existing Indian b-schools. Here are some excerpts from the interview.

How did the idea of starting Schulich School of Business at Hyderabad come about?

We entered India back in 1991 through exchange programs with the Indian Institutes of Management (IIM) at Ahmedabad and Bangalore. Both schools are part of the list of 80 plus exchange partners we have more than 50 countries.

At that time, India was a very quiet place. But that changed soon after. In the same year the Indian government deregulated the corporate environment and India opened up to global competition. Then in 1995, the Canadian government deregulated education, allowing me to increase my presence in other parts of the world. Between 2001 and 2005, we increased our presence in India by opening up an office in Mumbai for offering executive education as well as to recruit and place students for the MBA program back in Toronto. It was around 2006 that I started getting interested in India. I started visiting the Indian human resources ministry to ask why I couldn’t start a b-school in India. The minister then told me that the a bill allowing foreign investment in higher education would come within a year. But year upon year passed and the amendment did not take place. We were then told that in the meanwhile we could start a twinning program in India, wherein the first year of a 2-year-MBA would be spent in an Indian school and the second in Toronto. And that is how in January 2010 we launched a dual-campus program with SP Jain Institute of Management and Research, Mumbai. The second year students of that batch are now in Schulich, Toronto after completing their first year in SP Jain, Mumbai.

While we were doing this, the government started moving ahead on the FDI in Higher Education Bill. The bill was passed by the cabinet and is now pending to be cleared by the parliament. I am confident that it will be passed because a country such as India cannot afford not to have globally competitive educational institutions to aid its growth.

In anticipation of the bill, I started looking for an Indian partner who would help us set up a b-school in India. That’s when I was introduced to the GMR Group by the High Commission of Canada to India. After having dinner with the board members of GMR and the heads of its foundation. we made a presentation about Schulich in Hyderabad and 4 to 5 months later, we had a partnership.

We now plan to launch a 2-year MBA program in India at Hyderabad within a couple of years. By that time GMR would have built the campus facility in Hyderabad. And as soon as we can, earliest September 2012, latest September 2013 we will have a full-fledged business school in India delivering both years of the MBA with an intake of 120 students, probably an executive program and a Master in Finance if needed.

Why did you choose India for a second Schulich campus?

We think of ourselves as a global school with a global presence. We currently have offices in more than five cities outside Canada besides having more than 88 alumni chapters in 70 countries. So when we think of expanding outside Canada, India is a natural choice because the country continues to grow into one of the worlds great economic engines and is becoming increasingly attractive to business students from around the world.

As India grows, the number of people who will be needing business education is huge. Demographically, 50% of India’s population is under the age of 25. I can’t say the same about China, who by 2020 have a problem on their hands because their demographics are set the other way round. The young people there are going to be limited in number and they will have a huge ageing population because of their one-child policy. India on the other hand will face a revolt if it fails to offer quality educational infrastructure for its emerging young people. We think that India will need strong business schools on the way.

How will Schulich School of Business, Hyderabad be different from what is currently on offer in India?

We do not want to repeat what Indian b-schools are doing. In India while ISB Hyderabad is slightly different, other schools such as IIM Ahmedabad, IIM Bangalore and the rest pretty much follow a similar structure. All of them are taking in most of their students directly after they finish college. Which means their average age is 21 to 23. All the schools have Indian faculty who are delivering an Indian curriculum. ISB’s model has a small difference, but not a lot.

We feel that this will not be the need of the Indian business community in the future. What they will require is more experienced people who can work in the global environment. We plan to come in with our 2-year MBA, which will be for participants between 27 to 30 years of age on an average and 5 to 7 years of work experience. Schulichs MBA program will mirror our program in Toronto. It will have a globally focused curriculum with learning that prepares students to manage in a global environment. It will have faculty from all over the world — 70% of Schulichs faculty are from outside Canada. It will also be comprised of students from all of the world students who are not only diverse, but who typically are older and have more average years of experience than students in most Indian MBA programs.

Obviously we’ll ensure that no more than 40% of the students are international because India needs a strong program here and so Indians will be dominating the class in Hyderabad. I’ll also bring in our global network of company linkages developed in Canada which none of the Indian b-schools have ever had. Also, I’m going to place the students not just in India, but all over the world. These will be the differentiating factors.

Given the unstable political environment in India, what gives you the confidence that the FDI in Education amendment will be passed in time for you to start a 2-year program in Hyderabad by your schedule?

We remain hopeful that the Foreign Educational Institutions Bill will be passed but we also realize that we may have to adjust our plans. We have thoroughly prepared and planned for a number of scenarios.

In case the amendment continues to be stalled, what is your plan B? Are you looking at alternative locations in Asia?

Regardless of what happens, we remain committed to providing quality management education in India along the same lines as the Schulich MBA in India that is currently being offered in association the SP Jain Institute of Management & Research in Mumbai.

We are currently not looking at alternative locations for a Schulich campus elsewhere in Asia. Following years of careful analysis, we have identified India as the strategic location for the delivery of an MBA degree. We intend to stay in India.

How will you convince American or European students to come to the Hyderabad campus over the one in Toronto?

One of the key differentiating features of the planned Schulich MBA in Hyderabad is that it will be part of a truly transnational school and will operate as a seamless extension and mirror image of Schulich’s Toronto campus, ensuring the same high quality of programs, faculty and students. Any campus that we build in India will not be a separate, standalone school but an extension of the Schulich School of Business. Students will have the opportunity to spend part of the MBA program in Toronto and part of the program in India. In other words, students can enjoy the best of both worlds. While some of the students based in India will come to Toronto in Year 2 of the program, a number of the Toronto-based students will want to come to India, where we will develop some new specializations that wont be available in Toronto.

As for why students from North America, Europe, Latin America and elsewhere would want to study in Hyderabad, there a number of compelling reasons. First of all, Hyderabad is one of the worlds great new economic hubs, with concentrations of large multinationals in the IT, biotechnology and pharmaceutical industries. Secondly, as India continues to grow into one of the worlds great economic engines, it is becoming increasingly attractive to business students from around the world.

Let me share with you a story concerning our School. In 2004, we established our first Satellite Centre in Beijing in order to recruit students to the Schools programs in Toronto and assist Schulich students and alumni with career planning and career opportunities in China, among other functions and activities. Initially, it was only our Chinese graduates who were looking to be placed back in China, but within several years, we noticed that a growing number of Schulich MBA graduates from Canada, Europe and other parts of the world were also interested in pursuing a business career in China, especially with large, well-known multinationals. We believe that same level of interest among our MBA students will exist with respect to careers in India. Our Hyderabad campus will give students the added opportunity of being immersed in the business culture of that city and developing contacts with firms located there.

Very few global corporates run their International or Asian operations from Indian soil. Rather, they run it from Singapore, Hong Kong, China or Dubai. How will you enable global corporate linkages at your Hyderabad school to match with what you have made possible in Toronto?

As with Schulich’s Toronto campus, our placement of students from the Hyderabad campus will be both local and global — it won’t be confined to any one region. Our placements will be directed in three main areas. First, with a number of large Indian firms that are globally-oriented (Tata, ICICI, Wipro, etc). Second, with large foreign multinationals that have subsidiary operations in Canada, India and elsewhere around the world (IBM, Hewlett-Packard, Ernst & Young, Merrill Lynch, McKinsey & Co, etc). Third, with corporate firms that are not headquartered in either Toronto or India but which are interested in hiring MBA graduates with a global perspective (Nestle, LOreal, Samsung, etc). Finally, its important to note that we will market our graduates from Toronto and India in exactly the same way.

How much tuition fees will you charge at the Hyderabad campus?

It will be exactly the same as we charge in Toronto, which currently is 60,000 Canadian Dollars.

How will you justify charging the same fees for your Hyderabad campus as your Toronto campus, given that the operating costs in India are lower?

Our fee is based on the fact that we are offering a world-class MBA at both campuses, Toronto and Hyderabad. Most of the faculty expertise as well as the curriculum and program development will come from Toronto so in terms of academic infrastructure, our operating costs will not be cheaper. There is one area, however, where students will experience lower costs, and that is in the area of residence facilities and living costs here in India. But otherwise, it will be the same program with the same costs.

Having said that, in Toronto we have been good at developing scholarship centers. My faculty strongly believes that those who can afford it should pay the fees and those who can’t should get scholarships. Last year we gave away 8 million Canadian dollars in scholarships at Toronto. Recognizing that India still has a large number of students who require expensive financing of their education, I am going to reserve a certain amount of the tuition fees to build a large student support fund to be offered as scholarships.

Why did you choose Hyderabad over other Indian cities for a campus?

I have been around India for a long time and I love Mumbai. Mumbai has a great attraction of having so many corporate head offices. But Mumbai is overcrowded and the land is expensive. The Maharashtra government for a while tried to give me land but what was on offer was very small and far away from the actual city. Delhi was not very attractive and Bangalore could have been used because it is a technology center, it too is becoming overcrowded like Mumbai. When we met the GMR Group, they told us that they had an upcoming facility in Hyderabad which would be close to the airport. Hyderabad is an important upcoming economic hub with a strong presence of global technology companies, biotech firms, etc. Downtown Hyderabad is not messy and overpopulated yet. So we chose Hyderabad.

It is believed that foreign schools entering India will poach faculty from existing Indian business schools by offering better compensation. Do you agree?

I don’t think that for the planned Schulich MBA in India I can hire faculty from schools such as IIM Bangalore or IIM Ahmedabad, I think that’s a misconception. Not even ISB Hyderabad, as they hire a lot of young faculty who otherwise would not get positions in global business schools.

We see all our faculty positions in a global context. 70% of our faculty in Toronto comes from countries other than Canada. I know the IIMs well and there isn’t anybody in Ahmedabad or Bangalore who teaches this kind of a global curriculum. Besides, the faculty at IIMs are not heavily research oriented. This to a large extent is because of government regulation. I need to be careful in explaining this to you.

You see, I have been Dean of Schulich for 23 years. In the beginning when I joined, the Canadian education system was as highly regulated as that of India now. Back then I couldn’t hire whomever I wanted. so I had to rely on Canadian faculty. I couldn’t increase the faculty because the money wasn’t there. Fundraising was non-existent. In 1995 the Canadian government deregulated education. Thereafter, I could charge whatever I wanted to and also start fundraising. So that by end-1990s I had enough resources to hire great people, create chairs and build world class facilities.

In b-schools that do not have enough resources to pay their faculty much, the faculty have to do extra consulting or a second or third job to get additional income. I wouldn’t like my faculty to do that. I pay my faculty well and let them have more time for research which directly impacts teaching quality. In my belief you are not a legitimate business school if you don’t have strong research.