Feature of the Week

February 17, 2013 11:59 pm

Vietnam gets to grips with its business schools

Street vendors push their carts along a side street in Hanoi, Vietnam, on Friday, Sept. 14, 2012. Vietnam has no need for loans from the International Monetary Fund, China, Japan, South Korea or neighbors in the Association of Southeast Asian Nations as the country has taken steps to overhaul its economy and banks, Prime Minister Nguyen Tan Dung said.©Bloomberg

Hanoi: street vendors push their carts along a side street in the city which is home to RMIT's second campus in Vietnam

Nguyen Thuy Tinh Ca says that when you have spent three years at a Vietnamese university you will know what boredom is. “It was a struggle not to fall asleep in class,” says the young woman who is now fizzing with entrepreneurial energy.

“Traditional teaching is 90 per cent theory and badly done. How far can you go with that dead learning,” she adds.

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Ms Nguyen launched herself as a brand manager with L’Oréal, then Rémy Cointreau, and is now marketing manager for Porsche, after graduating from the Royal Melbourne Institute of Technology’s Ho Chi Minh City campus six years ago. The institution is the Asian hub of Melbourne-based RMIT, which is Australia’s biggest tertiary institution. It is also perhaps the nearest thing Vietnam has to an international-standard business school. Ms Nguyen is now studying for her second degree at RMIT having embarked on a masters in project management.

“Vietnam is catching up amazingly fast. Vietnamese people are obsessed with quality now. That is why so many think about studying abroad – they don’t trust the quality of education here,” Ms Nguyen says. She recalls entering with nervous delight what was billed as the first 100 per cent foreign-owned university in Asia.

“My first reaction was ‘Wow! A branded university inside Vietnam.’ The workload was a shock ... [but] it also taught me the vital management trick of being able to multitask.”

RMIT’s adventure, into a country where only a generation ago Australian ground troops fought alongside American “imperialists”, shows how a focused project can help transform the pedagogic playing field in a developing country, says Michael Mann, education consultant, former Australian ambassador to Vietnam and a former president of RMIT Vietnam.

A lucky beginning

Chuck Feeney, the Irish-American philanthropist, was reading a copy of the Vietnam News on a visit when he chanced upon mention of Royal Melbourne Institute of Technology’s attempts to set up a university in the country. Mr Feeney quickly learnt that although Melbourne was likely to get help from the International Finance Corporation and the Asian Development Bank, it urgently needed fresh working capital to be viable. Within weeks he walked through the door with a donation of $15m.

“Chuck Feeney likes to think big. Financial support is most effective when it ... complements the interests and capabilities of the recipient. For RMIT, the timing was right because Vietnam’s education system was at an inflection point,” says Christopher Oechsli, president of The Atlantic Philanthropies and former head of its Vietnam programmes.

Mr Feeney’s generosity aside, it was a bold move by RMIT, says Chris McCahan of the IFC. “One of the biggest unknowns was how much student demand there would be for such a university. There was very little solid data on income levels and real savings rates. It was hard to know if the new university would truly be affordable to a large enough segment of the population.”

Success may not have come with a sea of profit. “We never talk about profit, we talk about surplus. We cover our costs and we invest,” says Joyce Kirk, RMIT Vietnam president. She says the standalone set-up was “unusual” because other universities entering Asia tended to take the softer option of partnership with a local institution.

“We ... produced more graduates than all the aid programmes combined and we have done it for free. It has not cost the government a single dollar ... It is a model worth repeating,” he says of his time at RMIT.

“What surprises me is that many hundreds of our graduates opened up their own companies. That is very, very satisfying,” he adds. A substantial English language programme was swiftly set up to address language difficulties.

RMIT Vietnam grew out of very humble beginnings. In 1998 RMIT was invited to establish the country’s first international university campus. From its launch in 2001 with a handful of students and 15 staff it has grown to more than 6,000 students split into two campuses, making it arguably the biggest international branch campus (those offering degrees accredited by the original university) in the world.

The curriculum is being broadened to include not only MBAs, EMBAs and other business degrees, but also engineering subjects.

In 1973 the Australian Labour government’s disillusionment with American foreign policy led to it re-establishing an embassy in Hanoi and giving aid, two years before the north’s final defeat of the American-backed south. Later, when Canberra started handing out scholarships, many of the students – often the children of senior communist party officials – went to RMIT in Melbourne.

Hanoi remains keen to maintain its recent economic success. Yet productivity growth, which dazzled in the 1990s, has slumped in recent years. The rise of capital flight is another alarm signal.

Mediocrity beckons for Vietnam if it cannot raise its skill levels.

“You can lift a local university up to the highest international standards if you are prepared to pay $2bn and can wait 20 years,” says Mr Mann, adding that the RMIT model is much faster and costs nothing.

Universities are keen to capitalise on emerging economies’ need to access higher education. The number of similar international branch campuses globally had passed 200 by the end of 2011 and 37 more were scheduled to open within the next two years, according to the Observatory on Borderless Higher Education. Singapore alone has 18.

This is not necessarily as exciting as it sounds, says Ben Wilkinson, who oversees Harvard University’s economics teaching programme in Ho Chi Minh City, geared towards policy makers.

He notes that a swath of “rapaciously for-profit” private institutions in Vietnam, both local and international, have contributed to a glut of graduates with business qualifications to the point at which the education ministry is suspending new business programme licences. Fee-paying students are attracted to business courses because they want to get their money back swiftly but Mr Wilkinson says: “Right now Vietnam needs engineers and scientists more than it needs marketing specialists.”

RMIT, for now, enjoys very little competition, having filled a niche in providing a wholly overseas education.

But Mr Wilkinson sees a few potential hurdles ahead. One factor is the quality of its intake – like the majority of its regional branch-campus rivals it is not strongly selective over admissions, whereas winning a place in a leading Vietnamese state university is extremely difficult.

Also looming on the horizon is the likelihood of a big increase in offerings of online “international” education as the various platforms become more sophisticated and credible but still relatively cheap, warns Alex Katsomitros, an analyst with the OBHE.

“Once online education has been fully worked out, the international branch campus model may be out of date. There is a window of maybe five to 10 years to get these schools set up ... after that the scene may have changed,” he says.

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