Speech by Dr Ng Eng Hen, Minister for Education and Second Minister for Defence, at the Grand Opening of NUS Business School's Mochtar Riady Building at NUS Business School, on Friday, 24 September 2010 at 4.30 pm
Mr Wong Ngit Liong,
Chairman, NUS Board of Trustees
Mr S Dhanabalan,
Chairman, NUS Business School Management Advisory Board
Professor Tan Chorh Chuan,
Professor Bernard Yeung,
Dean, NUS Business School
Distinguished Guests, Ladies and Gentlemen
I am delighted to join you today at the official opening of the NUS Business School building and also the School’s 45th Anniversary Celebrations. This new building is named after Dr Mochtar Riady, the Founder and Chairman of Lippo Group to recognise his generous donation to the NUS Business School. I would like to thank Dr Riady for his generosity.
Challenges in the Higher Education Sector
On this occasion, it would be apt, among experts, to reflect on the business and funding of university education globally. As with all businesses, tertiary education – whether private or public – is not immune to the impact of costs, market demand and expected returns for its sustainability. For example, it was reported recently in the UK that some A-level graduates are choosing to work despite being able to enrol in university, because they do not want to be saddled with the debt of financing their education or because university places are oversubscribed1. Degrees from some universities it seems were not considered value-adding, compared to practical work experience. In the US, post-financial crisis budget cuts have been followed by fewer places and higher fees in State colleges2 leading to students deferring their college education. A recent article in The Economist3, entitled provocatively, “Will America’s Universities go the Way of its Car Companies?” quoted a US News & World Report saying that “if colleges were businesses, they would be ripe for hostile takeovers, complete with serious cost-cutting and painful reorganisations.”
It is clear that high quality education is costly – the same Economist article cited that attending a private Ivy League college will set you back US$38,000 a year, excluding bed and board. In the ensuing decade with fiscal pressures on most Governments, we must expect greater scrutiny on the costs and quality of tertiary education. This applies to us here in Singapore as well, even though we have been both fortunate and prudent in not sustaining any public debt or having to reduce university places. In fact, we are increasing the cohort participation rate (CPR) for university education and public spending on R&D, as was recently announced.
Prime Minister Lee also announced in his National Day Rally (NDR) that the Government will provide higher matching grants for endowed donations raised by universities. In all, the Government will invest about $4 billion over the next 20 years, out of which $2 billion will be set aside in a Singapore Universities Trust, to ensure the continued provision of matching grants regardless of economic circumstances. This large amount signals strongly the Government’s commitment to quality tertiary education for Singaporeans, but also underscores the move towards endowment income contributing to a larger share in funding universities’ costs, in addition to Government subsidy for the major proportion of tertiary education. But as costs rise with increased quality of education, those who benefit most from tertiary education must also expect to bear some of this increase. However, our prevailing policy will be preserved, where no student who can benefit from a university education should be denied it because he cannot afford it, as we continue to make available scholarships and loans.
There are also supply-side challenges to tertiary education. Worldwide, countries have committed themselves to increasing the supply of graduates. China recently announced their goal to have 8 million graduates a year by 2020. India similarly has committed to increase its figure to 6 million graduates a year by 2020. In the US, Education Secretary Arne Duncan has also set his Administration the task of increasing the number of graduates by 50%, to about 3.4 million a year by 2020. What this means is that China, India and the US alone will produce 18 million graduates per year by 2020 – a 70% increase. Fundamental questions will need to be addressed from these structural trends: will industry needs match and absorb this large ramp up in supply or will degrees become commoditised? How will this affect the tertiary education sector globally and within each individual country? What is the value proposition each university can offer in the face of escalating numbers? In particular, how should Singapore respond?
Creating Peaks of Excellence in Higher Education
In a word, differentiation. We aim to create a robust tertiary sector with various models that is sustainable and characterised by high quality graduates valued for their specific contributions. Let me elaborate.
We have done well to keep our Polytechnic sector. Wherever I travel, academics and Government officials laud us for doing so, as they regret having given up theirs. Polytechnic graduates are equipped with industry ready skills, are highly employable and contribute significantly to our economy. Over 90% of polytechnic graduates each year gets employed within 6 months of graduation. In fact, the relevance is reflected by increasing demand – the polytechnic CPR has gone up from 36% in 2000 to 43% in 2010, and will continue to increase to 45% by 2015. Recently we set up the Singapore Institute of Technology (SIT), to cater to polytechnic upgraders. The SIT will partner reputable overseas universities to offer degrees to polytechnic graduates in the name of those universities. Polytechnic graduates can obtain these degrees in two years. This will save costs, without diluting any quality and more importantly allow these students to return to the workplace without the risk of their skills or know-how rendered obsolete by a long study period. SIT is taking in its first intake of 500 students this year and will increase to 2,000 by 2015
We will also further differentiate our university sector. For instance, NUS and Yale are studying the set up of a Yale-NUS Liberal Arts College. It will be a first in Asia, to provide an education model to develop leaders of industry, academia and indeed of nations, as Yale has consistently done. At NTU, the establishment of the Imperial College-NTU Medical School in 2013 will meet Singapore’s future healthcare needs by producing skilled doctors, and introduce innovations to medical education in Singapore. Imperial College’s strengths at the interface of engineering and medicine can be tapped to innovate better medical devices for health care. Finally, the new university, the Singapore University of Technology and Design (SUTD), with MIT will be a small, top-end research-intensive university, offering degree programmes in Engineering and Architecture, and using design in teaching and to integrate the disciplines. MIT’s commitment to this is deep and will include designing an innovative undergraduate curriculum as well as providing Joint Masters degrees in engineering. These initiatives have all sought to diversify the higher education landscape, and produce peaks of excellence well known locally and globally.
These initiatives are important, even path-breaking but we should not miss the trees for the woods. For Singapore, a small nation with limited resources, there are larger strategic considerations as well as limitations. The high costs of some of these programmes can only be justified if they produce knowledge or attract talent to benefit Singapore and all Singaporeans. For long term sustainability, we must ensure that each of these new programmes as well as existing institutions continue to add value to Singapore’s economic and social needs.
The NUS Business School: Developing Talents for Singapore
Whatever we build in Singapore must be characterised by high standards and be relevant to the needs of our society. The NUS Business School exemplifies this focus. When it first started out in 1965, the School had only four full-time staff members. Today, NUS Business School has more than 110 faculty members, a total of over 3,000 students and has grown in prominence and stature internationally.
NUS Business School has now expanded its offerings to meet the market’s increasingly sophisticated needs, from the initial batches of Business Administration Diploma graduates in the 1970s, to the wide variety of programmes available today at the Bachelor’s and Master’s levels, as well as through the Executive MBA and PhD programmes. The Bachelor of Business Administration, or MBA, is one of NUS’s prominent leadership and management programmes. MBA graduates have consistently achieved high employment rates. During the weak job market in 2008 and 2009, more than 90% of them found jobs within 6 months of graduation. The MBA and Executive MBA programmes have both been ranked highly by the Financial Times globally and in Asia.
In the next two decades, game-changing opportunities will present themselves with the rise of Asia. This provides an ideal opportunity for Singapore to strengthen our position as a leading global business and academic hub. We can take full advantage of our strategic positioning at the crossroads between East and West to increase our relevance and worth.
I am happy to note that the NUS Business School has been actively pursuing this strategy. Today, about 54% of undergraduate students in the Business School spend 3 to 6 months in an overseas environment. While the majority of students choose the US and Europe for their exchange programmes, most opt to work in Asia for their internships. The School has also built up its capabilities in the study of business and financial issues in the Asian context. For example, the School recently launched the Centre for Asset Management Research and Investments to pioneer research, education and practice of Asian asset management. It has also set up the Centre for Social Entrepreneurship and Philanthropy last year to advance social entrepreneurship and philanthropy research and education in Asia. These efforts enable the NUS Business School to contribute to Singapore’s development as a global business hub.
I hope this brand new building, with its state-of-the-art facilities, will serve to spur students, alumni and faculty to live up to the School’s 45 years of tradition and accomplishments in nurturing students to become adept business leaders in Singapore, Asia, and the world.
I would like to congratulate all who have brought the School to where it is today. I hope you will continue striving to bring the NUS Business School to greater heights.
Congratulations on the opening of the Mochtar Riady building, and I wish you a happy 45th anniversary.