Six tips for breaking into markets in Asia

Planning for a future expansion into Asian markets? Export expert, Siddharth Shankar, has six pieces of advice to offer

There are big profits to be made for companies looking to expand their products into Asia, but what’s the best way to break into the Asian marketplace? Here are six top tips:

1. Follow demand

Where is there already a market for your product? Heavy industrial products are valued in countries, such as India, China, Thailand and Cambodia, where huge infrastructure construction is needed but where there is a shortfall in the country’s own heavy industry manufacturing. Energy products, relating to both fossil fuels and renewable energy, are very competitive in ASEAN countries. Luxury goods are popular in parts of the Middle East and Japan.

2. Understand your target market

Gaining an in-depth understanding of the local market is the key. This includes understanding local culture, legal restrictions and regulations, language barriers (finding reliable translators if necessary) and setting up a local network of individuals and organisations you’ll need to work with.

3. Don’t sweat the distance

Exporting to Asia is becoming more straightforward. The fast-improving infrastructure in many countries, coupled with cheap warehousing and logistical costs mean it’s more and more feasible to trade there. Lower labour costs also allow western businesses to operate in these markets with less of the risk normally associated with entering a new export market. Adoption of International Financial Reporting Standards (IFRS) and corporate governance codes by many countries across Asia is also making the exporting process easier.

4. One size doesn’t fit all

PR and marketing activity needs to be tailored to the specific region in Asia to which you’re exporting; it isn’t sufficient to target Asia as a whole. To take UK brands as an example, their products’ lineage and heritage can make them attractive to consumers in Asia, in part due to the historical legacy of British colonialism in the region.

However, the key to success is in understanding that each local market is separate and treating it as such. A Korean woman’s shopping habits are completely different to those of her Chinese counterpart, so seeking advice on this from a local partner is key.

5. Smaller brands are gaining traction too

Asian markets are now starting to recognise smaller brands too. Look, for example, at the recent success of UK brands such as Burberry, MG motors, Rolls-Royce and Dyson [the latter of which has even shifted its headquarters to Asia in the past year] in China, India and ASEAN countries.

The reasons behind this are more complex than a mere show of wealth. A big brand product, such as LV or Coach, that people purchase and show to friends and colleagues might demonstrate the owner is rich. But other purchases might convey that the owner has a certain taste. This mindset comes from the new generation of consumers representing Asia’s middle classes, and it’s key to tap into this as a smaller brand.

6. Don’t go it alone

Many markets in Asia have a tendency to favour their own national organisations over companies from overseas – so it might be an idea to partner up with a local organisation. However, it’s important to make sure you pick a knowledgeable and trustworthy company.

Avoid signing up with any partners without carrying out thorough background research and providing clear and enforceable paperwork and responsibilities. The methods of conducting business in Asia are very different, so it’s important to be as clear as possible before you sign on the dotted line.

Siddharth Shankar is a leading expert in exporting and CEO of Tails Trading, a firm helping UK SMEs to export their goods.

The opportunities for international expansion in Asia

Expanding a business internationally can be challenging, but Asia offers five major markets and many of the world’s fastest-growing economies, writes Siddharth Shankar

Expanding a business internationally is a difficult undertaking at any time. But with the current geopolitical tensions and heightened uncertainty, you would be forgiven for thinking this isn’t the time to take a risk on an overseas launch. However, international expansion could prove key to beating gloomy forecasts.

Many of the world’s fastest-growing economies are in Asia. India, Bangladesh, Cambodia, Myanmar, Laos, Vietnam, the Philippines, China and Mongolia were all expected to grow by between 7.4% and 6.2% over the course of 2019, for example. This makes Asia an increasingly important, and lucrative, focus for businesses based outside the region. When it comes to international expansion, there may now be more opportunity for firms within Asia than within the European Union. 

Research by HSBC has found that approximately 70% of future world growth will be from emerging economies. And analysis from the United Nations Conference on Trade and Development reveals that Asian economies will be larger than the rest of the word combined in 2020. It’s therefore becoming increasingly important that businesses shift their focus to markets that will, in the future, dominate the world stage. 

Five major markets

To successfully expand into Asian markets, it’s critical not to fall into the trap of treating the continent as one homogenous market. The region is made up of five major markets – namely China, the Indian subcontinent, Association of Southeast Asian Nations (ASEAN) countries, countries in the Middle East’s Gulf Cooperation Council (GCC)and East Asia. Lumping all these highly diverse regions and countries into one convenient bracket has been the downfall of many businesses. It’s crucial to understand the cultural, social, political, geographical and economic factors at play in each Asian market individually. 

First, the products that will be successful in each market will be very different. Heavy industrial products, for instance, are in demand in India, Thailand and Cambodia. Huge infrastructure construction is needed within these countries, yet their own heavy industry manufacturing is relatively weak. 

Energy products – relating to traditional fossil fuels and renewable energy equipment – are competitive in ASEAN countries as well as in China. China and India have now realised the increasing need to forge a cleaner and leaner path to development. Luxury goods are particularly in demand in GCC countries and Japan. Meanwhile, in China and India, the appetite for traditional beverages, such as whisky and gin from the UK, has reached a whole new level.

As well as the economic, geographic and societal factors that affect a product’s potential in Asian markets, it’s often more difficult to form an understanding of the cultural factors. This requires in-depth local knowledge. For instance, a company launching a range of hats in China might have unrivalled success selling a red hat but find a green version of the same hat would flop. This is because, within local culture, if a man wears a green hat it might mean his wife is cheating on him – never a good look! A local partner can prove essential in navigating these testing cultural nuances. 

The strategy required to expand into each market is also diverse. Launching a product portfolio in Asia’s two largest markets – China and India – requires taking an altogether different approach in each case. Western products can be launched directly into China, with westernised branding, even as a new brand. Conversely, to maximise the chances of success when expanding into the Indian market, it is often advisable to expand into influential markets with links to India first – for instance, Singapore or the United Arab Emirates. 

This allows the target segment of consumers in India to form an understanding of the brand before it is available in India, thereby piquing demand for it. Indian consumers tend to follow their culture, tradition and values strictly. As a result, overseas companies are often forced to give an ‘Indian touch’ to their products and marketing in order to succeed. 

Regional differences

Even within a country, it’s important to be aware of the vast cultural differences that often exist between one region, or city, and another. 

You would probably be forgiven for thinking that the capital city in each location is the best place to launch a new business. But sadly, it is not that simple. Not all capitals work. To give a European example of what I mean, it’s notoriously difficult to do business in Rome. It might be the heart of Italy’s political and religious institutions, but if you were going to launch a fashion business in Italy, you would almost certainly bypass Rome and head straight for Milan, with all its design and fashion credentials and networks. 

It’s the same in each of the five major markets in Asia. The capital cities may be the perfect place to build political alliances – but that doesn’t mean they are the best place from which to launch a particular product or brand. Often, looking beyond the capital and targeting smaller cities, and even towns, can deliver better results.

You may not have heard of places like Tangshan and Sanya in China – but they are exactly the sort of cities that are worth thinking about. Both cities have local economies that are thriving due to huge local wealth, or large tourist attractions. Both also have effective infrastructure and would deliver excellent results for the launch of brands from certain industries.

Cultural identity

Deciding which city to launch from is not even necessarily about choosing one of the biggest cities. Do your research – think about the cultural identity and interests of your target customer and work out where they are most likely to be based. It’s the only way to find the city with the best fit and consumer base for your product.

Before honing in on a launch city, it is also worth spending time reflecting on the bigger picture. Each of Asia’s five major markets presents exciting growth opportunities. 

India has a population almost equal to that of China but a GDP growth rate that is almost double China’s. Looking to East Asia, Japan is the world’s third-largest economy, while South Korea has one of the world’s fastest-growing economies. Meanwhile the ASEAN region, which includes Singapore, Malaysia, Thailand, Vietnam and Indonesia, has a combined population of 640 million people and an economy worth over $2.8trn USD, with increasingly open internal trade. 

Market focus

So which specific markets within Asia should businesses focus on? Let’s take a more in-depth look at two very different, but highly promising opportunities:

A. The major market: India 

India’s GDP growth forecast for 2019 is 7.3%, making it one of the fastest-growing economies in the world. Rising salaries mean the region has a burgeoning middle class, with an increasingly disposable income. According to the Economist, HSBC recently estimated that the size of India’s middle class in India had reached 300 million, a figure it predicts will rise to 550 million by 2025.

The demand for products and brands in India is at an all-time high and this is set to continue for the foreseeable future. Indian consumers have become more value sensitive than price sensitive. If they feel that a particular product offers them more value, they are often willing to buy the product, even if the price is high. 

India is a multi-religion country which has a population of around 1.4 billion people. There are four broad segments to the market:

•  The socialites: socialites belong to the country’s elite. They like to shop for luxury products, travel in high-end cars and buy opulent villas. They are always looking for something different. Socialites are also very brand conscious and would go only for the best-known brands in the market.

•  The conservatives: the conservatives belong to the middle classes and are often a reflection of the true Indian culture. They are traditional in their thought processes, slow in decision making and they seek a lot of information before making any purchase.

•  The female profesionals: the so-called ‘working woman’ segment of society has seen tremendous growth in recent years and, as they have become empowered in the workplace, their impact on consumer trends has boomed.  

•  Youth segments: the younger generation is optimistic and enthusiastic. They believe in having a modern lifestyle, are brand cautious and are often ready to pay for quality.

B. The market to watch: Thailand

Thailand is the second-largest economy in the ASEAN, accounting for 17% of ASEAN GDP. There have been huge changes in Thailand over the past 40 years, transforming it from a low-income country to an upper-income country. After a slowdown between 2015 and 2017, Thailand’s economy looks to be on the up once more, with a growth rate of 4.1% in 2018. 

It is increasingly easy to do business in Thailand, as the infrastructure improves and the government makes positive regulatory reforms. There is a growing middle class and, in the capital of Bangkok, new luxury brand shopping centres are springing up. 

In conclusion, the combination of fast-growing Asian economies and a troubled eurozone means there is a lot of opportunity for firms to expand into Asia. While in-depth research into the complex cultural, social and economic factors of launching a brand into each individual market within Asia is essential to avoid falling into common exporting traps, the potential rewards are high.

Siddharth Shankar is a leading expert in exporting and CEO of Tails Trading, a firm helping UK SMEs to export their goods.

The impact of geopolitics on business and Business Schools

Global political and cultural goalposts are moving, and Business Schools must move with them, writes MIP’s Giuliano Noci

The world is entering an era of change to the global order. Populations are growing, technology is allowing civilians to become increasingly connected and, despite much political unrest and division, governments are now being asked to unite to face threats such as climate change.

An understanding of geopolitics has always been important for business; perhaps because, at the most basic level, international law allows governments to stop foreign firms from operating in their countries. Areas of geopolitical interest for companies range from differences in international trade and legal requirements to the threat of war or terrorism, or specific events. The latter includes the growing momentum of the so-called 16+1 initiative: China’s mechanism for engaging with countries in Central and Eastern Europe. 

The most recent gathering of 16 states which endorse China’s ambitious ‘Belt and Road’ investment project took place in the Croatian city of Dubrovnik, and has unsettled European Union (EU) leaders, who are watching the growth of China’s political and economic influence in the region closely. 

Chinese-led infrastructure projects, including a high-speed railway from Budapest in Hungary to Belgrade in Serbia, promise European countries that are most in need of support a financial boost. However, China would also benefit significantly from the overall plan of linking up this railway line with its port in Piraeus, Greece, the entry point for Chinese goods to Central and Eastern Europe. State-owned Chinese banks will provide the finance for these projects and Chinese companies will supply the technology and construction.

Yet, although many European businesses have developed plans to deal with the moderate change factor of Brexit, barely any are focusing on (arguably) more dramatic geopolitical events and associations, such as this alliance. A preoccupation with creating plans for all Brexit outcomes – including the improbable – has dominated many businesses, fuelled by the European media. Despite the UK failing to leave the EU in March 2019, eyes are still firmly fixed on micro-changes in the debate, meaning that other important events and geopolitical shifts are largely passing unnoticed.

One such issue is that the population of Africa is expected to more than double, to 2.4 billion before 2050. Despite such a huge projected growth figure, companies are still not devoting enough – or, in some cases, any – attention to this demographic, which is likely to become highly relevant to them. China, however, has recently pledged $60bn USD of investment in major capital projects which aim to develop the local African economy. 

In many respects, global political and cultural goalposts are moving and managers are having to deal with totally new perspectives and situations when they work internationally. C-suites are increasingly investing in diversity management and the most advanced businesses are taking further measures to ensure they are aware of the geopolitical stance of countries in which they work, trade or are interested. But are they doing enough?

How businesses can cope

Geopolitical changes in areas of operation can be significant for companies, and I’ve observed many that react to change in precisely the wrong way. One problem is the duality of the relationship between a large number of organisations’ headquarters (HQ) and their individual branches. Although it is absolutely necessary to be close to customers in order to understand their needs, build authentic relationships and have a tangible point of contact, I would argue that these offshoots often operate with far less autonomy than they deserve. Deciding and controlling everything at HQ is not always the best option when dealing with cultural, organisational and strategic hurdles.

For these reasons, many businesses would find their operations much improved if they modified their basic organisational structure. Scrapping the one-way mechanism of knowledge sharing and implementing a bilateral dialogue for information exchange can greatly influence and improve strategic decisions. Jointly deciding what action a company should take in the face of a geopolitical incident is far more likely to provide a successful outcome. It’s important, in these cases, not only to use the experience and wisdom of the C-suite but also the regional branch’s specific understanding of the local market. 

The best method for ensuring this – and one that increasing numbers of international businesses are adopting – is implementing local research and development units.
This helps companies grow country-specific innovations and produce relevant services for a customer base they have invested in understanding.

Impact on Business Schools

By its very nature, geopolitics is a multifaceted issue which can impact a number of key areas for Business Schools.

For example, last year’s annual Application Trends Survey from the Graduate Management Admission Council (GMAC) revealed that although applications to Business School programmes in Asia Pacific, Europe and Canada increased between 2017 and 2018, programmes in the US reported a drop in volume. In total, the US experienced almost a 7% decline, including a 1.8% drop in domestic application volume and a 10.5% fall in international volume across all programme types.

According to Sangeet Chowfla, GMAC President and CEO, this lag in US Business School demand can be explained by several factors, including a low unemployment rate meaning that young professionals may have an increased opportunity cost of leaving their jobs in pursuit of an advanced degree. This is combined with a disruptive political environment in the US, headed by controversial President Donald Trump, and the emergence over the past decade of tremendous educational and professional opportunities abroad. A combination of social and political factors have had a clear bearing on some Schools which dropped from previously record-high application numbers. 

How do Business Schools combat these types of disadvantages strategically? I would argue that there are two key areas for Schools to focus on.

1. Increasing strategic partnerships 

It has long been acknowledged that diversity in business education cohorts is crucial to students’ exposure to different cultures, mindsets and ways of working. 

As the world becomes increasingly connected and multinationals seek to reach new markets, one of the key soft skills they require from new hires is emotional intelligence and the ability to create relationships with peers living thousands of miles away. Increasingly, Schools are hiring more international faculty to aid this – but it’s simply not enough.

Progressive Business Schools must look to create more partnerships with overseas universities and businesses in order to offer students a better understanding of markets and societies across the world, including Africa, Russia and China. 

One such partnership is embodied in a design innovation hub, launched between MIP Politecnico di Milano and Beijing-based Tsinghua University, in Milan, Italy. It is set to become the biggest Chinese innovation centre in the world. The hub is Tsinghua’s first – and only – educational and research base in Europe, and aims to become a platform for Chinese companies to receive innovation-related services such as training in AI and robotics technologies, rapid scaling up of SMEs, and instruction in areas including entrepreneurship.  

The platform will be open for participation from academic circles, governments and industries of both China and Italy, as well as promoting communication and collaboration between the two countries in education, scientific research and cultural industries. Its aim is to combine the Italian methods of innovation and development with the Chinese methodology of production at scale, combining the best of eastern and western expertise.

2. Co-designing international courses

Another way to provide students with insight into the geopolitics of markets that may be of interest to them in their future careers is to design specific international programmes.

For this reason, Politecnico di Milano’s Graduate School of Business recently partnered with the University of Wollongong  in Dubai (UOWD) to develop new post-graduate programmes in luxury brand management in the Middle East. This area represents a big opportunity for luxury firms and these courses will take a closer look at the management of premium brands as well as emerging luxury markets in Dubai and other shopping destinations such as Milan, Paris and Geneva. The aim is to give professionals in this arena experience and knowledge of working in a country with different sets of laws, politics and business etiquette.

This partnership brings two different areas of expertise to students interested in this growing – and unusual – market. On the one hand, the University of Wollongong was the first international university to establish a presence in Dubai and offers unparalleled expertise in tertiary education in the Gulf Region. Combined with MIP’s prowess in design and luxury management, the partnership’s programmes will recognise the commercial and cultural significance of the Middle East’s luxury market, and are likely to be significant for executives across all luxury categories including fashion, jewellery, automotive, travel, food and wine.

International immersion is crucial for students looking to understand the cultures and ways of working of their future target markets, while also making them attractive to businesses working in the region. Many organisations are moving away from past failures caused by their misunderstanding of foreign social and political tropes; for example, Starbucks’ failure in Israel, due to its lack of understanding of the country’s already-booming café culture.

As the world becomes evermore connected and managers are exposed to even more groups of politically and geographically diverse people, the need for an awareness of issues and the skills required to adapt to changing circumstances will only increase. For businesses, hiring international people, increasing the autonomy of individual branches and researching the geopolitics of new and existing areas will become increasingly prominent. 

For Business Schools, imparting an awareness of huge geopolitical issues, such as the trade and technology war between the US and China will help ensure that managers of the future can make critical business decisions that are sufficiently informed. This will be crucial to their success in the years to come.

Giuliano Noci is a Professor of Strategy and Marketing at Politecnico di Milano School of Management, Italy.

Exploring the future of globalisation

Business Schools must collaborate within a global partnership to help create a sustainable future for all, argues Steef van de Velde, Dean and Professor of Operations Management and Technology at Rotterdam School of Management, Erasmus University. Interview by David Woods-Hale and Jack Villanueva

At AMBA’s recent conference in Latin America, you presented on the future of globalisation. What did you cover? 

I shared a couple of stories about how to be a part of a global partnership. The world is globalising very fast. We all want to be international. So I shared a couple of case studies about how we started our international journey, what worked, what didn’t and what we needed to do to make it happen. 

You’ve joined the board of AMBA. How would you like to see the business education arena change for the better? 

I’m looking forward to doing my bit. What I’m hoping to bring to the table is the perspective of the continental European School. It’s important to bring in diversity. It’s important to have people of different backgrounds. 

What draws prospective MBAs to Rotterdam School of Management? 

It’s very international and diverse – 98% of the cohort is non-Dutch. Our mission – ‘to be a force for positive change’ – works very well.  It goes beyond sustainability and the UN’s Sustainable Development Goals (SDGs). I believe business is a force for change. More and more people are embracing this principle. We promise our students that by joining our MBA, they will be agents of positive change. 

What differentiates the Rotterdam MBA? 

It’s very hard for any School to have a genuinely unique element. We all claim to be unique. We all teach finance and marketing. But if you want to stand out, you need to do something different in the area of character building. We very much drive the importance of the SDGs. We tell our students business is not about making money for yourself, but creating a sustainable future for all. It’s about creating business models that do well but also do good. those values are very much alive in our part of the world. 

What are some of the innovative teaching methods you’ve come across? 

If you look at curricula all over Europe, the delivery format is changing. More and more of the teaching is being done in an experiential way. It’s not just listening to instructions – it’s learning by doing through living cases, field-work and assimilations. That’s basically what’s going on. Ideally, this would be done in diverse teams with people from all over the world. This gives students the opportunity to learn in a very fast pressure-cooker type way, but also with people from different backgrounds. 

How important is sustainability in terms of Business School course design? 

Sustainability is very important. However, we try to step away from using that word, because often the connotation is too narrow – environment or green issues. We’d rather talk about sustainable development and big societal challenges, which go way beyond this narrow interpretation of sustainability – and which make people nervous. 

The SDGs  talk about poverty, inequality, lack of employment, lack of infrastructure, climate change and much more. In our School we avoid ‘sustainability’ and talk about SDGs.

In light of that, what does a sustainable leader look like to you? 

We use the word ‘responsible’ rather than ‘sustainable’ and this means people have a very broad eye on what’s going on in the world; you manage a style of company that goes beyond making money for you and your family, but contributes to a better world. We try to encourage our students and graduates to contribute to a better world and be a force for positive change. 

In your personal and professional life, you’ve worked all over the world. How do you instil this international mindset in your students? 

We do this by recruiting people with different backgrounds from all over the world, in all our programmes, and by creating an international atmosphere. We create opportunities for people to work with others with different experiences. We also recruit faculty from all over the world and who will go places with their students. Our students travel all over the world and therefore are exposed to the global mindsets. 

How can MBAs turn theory into practice in the working world? 

People have to do something experiential. We stimulate students to set up their own businesses, often in the area of social business. 

You’re looking for students who can deliver on a global scale. Should students look at local economies first and work up – or take a top-down approach? 

To me, it’s very clear: people bring local experience but they have to do something with global impact. 

Collaboration is vital in uncertain climates. How is your School building links with other Schools, employers and alumni? 

We’re international through strategy and sheer luck. We’re members of leading groups and our Triple Crown accreditation gives us access to very strong international networks, in which we can discuss new initiatives and programmes. This collaboration for us is key to stay ahead of the competition. 

I’m using the word ‘competition’ but some of the Schools we’re ‘competing’ with in the same market are also the Schools with which we want to collaborate. 

What are the challenges that Business Schools face? 

There are quite a few challenges facing us. First, funding: we’re mainly a public university, so funding goes down year after year; one way or another you have to absorb that. At the same time, all Schools want to be international and we’re after the same faculty and students, so competition is getting fiercer. Faculty management and retention is a big challenge for most Schools. 

What would your advice be to other Business School leaders operating in this volatile and uncertain world? 

Over the years, I learned something that surprised me: the importance of having a compelling mission. Up until three years ago, I thought no one cared about mission. Then we worked on a new mission. To my surprise, this has released an enormous amount of energy and passion. 

Mission, to my mind, is nothing else but common purpose. Everyone wants a purpose in life. If you have a purpose you can rally everyone behind it and then it’s a lot easier to change things as they all understand what you want to achieve. 

Our new mission has had an impact on our School, students, faculty staff and also external stakeholders. It has served us very well so far. I’d urge Business School leaders to define their mission and purpose; once they do, things will become a lot easier. 

How can a Business School add value to a corporate employer with which it’s working? 

A Business School is all about delivering talent to the job market, so as a Business School you need to stay on top of what exactly the market requires. It’s changing very fast and teaching is moving away from accounting and finance towards business analytics. Business Schools have to follow the trends, there’s no way around it, and you have to stay in contact with companies. 

What’s your level of optimism about business, Business Schools and the economy? 

On a scale of one to 100, it’s very close to 100. I’m an optimist by nature, in spite of all the uncertainty in the world – especially around politics. I truly believe in the EU and this has worked well in Europe. 

Steef van de Velde is a Professor of Operations Management and Technology and the Dean of Rotterdam School of Management, Erasmus University (RSM). 

Waiting for Godot: treading the boards of the great Brexit drama

From the realities of life outside the EU and effects already in evidence, to potential dividends as seen by supporters, ESCP Europe’s Simon Mercado runs the rule over Brexit’s implications for UK Business Schools

In April 2019, Xavier Bettel, Prime Minister of Luxembourg, remarked that waiting for Brexit is a bit like waiting for Godot. In Samuel Beckett’s famous play, the central characters stay and wait for somebody (Godot) who never quite materialises. Moreover, their long and painful wait is characterised by bickering and disagreement. One gets the connection to Brexit as well as the good humour that extends from the fact that Waiting for Godot was originally written in French. Plus, before anybody screams ‘backstop!’,  it’s worth mentioning that the English version of the play is often played out with the central characters depicted as two Irishmen. 

Three years on from the UK’s EU referendum, we still wait for a Brexit process outcome.  Theresa May’s resignation and a pending summer recess with a new Tory leader will not speed things up much. Halloween (31 October 2019) awaits the UK and EU as a self-imposed deadline. A game of ‘trick or treat’ looks inevitable.

Over these three torturous years, the UK’s Business Schools have had time to eat, breathe and sleep Brexit.  Few, if any, have expressed joy at its choice or impact and most have lobbied for a softer variant or its abandonment. This position has tended to reflect a majority view that continued EU membership is the best platform for the sector’s growth and future success.  

In one of its early pronouncements on the subject, the UK’s Chartered Association of Business Schools (CABS) declared: ‘We can’t change the outcome of the referendum but we need a good deal if we are to avoid seriously adverse consequences.’ Behind such a careful statement is a community of Business Schools that would tend to believe that Brexit is a setback, the scale of which will reflect the nature of the final exit deal. Across the sector, Business School Deans have queued up to couple cries of resilience with admission that leaving the EU hurts the UK’s ability to attract the best students, researchers and academics from across Europe.

Brexit fears and impacts

What underpins opposition and/or suspicions over Brexit? To answer this question, we have to look at the current situation and benefits of EU membership.

At the moment, higher education (HE) institutions in the UK can recruit the best European academic talent with relatively little restriction. Over 20,000 European nationals work in the UK’s HE sector on a visa-free basis. Among these are outstanding academics and professionals making great service to UK institutions. In many disciplinary fields, this supply line is vital to the educational offerings and reputation of UK institutions.  

On the other side of the staff-student relationship, the UK currently attracts EU nationals to study here with few obstacles or barriers. There are close to 140,000 fee-paying degree students from continental Europe in the university sector alone, making up about one quarter of its global international student population. As a full EU member economy, the UK can match its appeal as a high-quality, English-speaking sector with a fee and access regime that positions EU nationals favourably when compared to other international students.

With EU nationals treated as if they were home students, they pay lower fees and can study on UK-based degree programmes without visas. They can secure loan financing for their UK-based studies (as if they were UK nationals) and enjoy a right to stay and work in the UK after graduation. On top of this, there are around 20,000 UK citizens studying elsewhere in Europe for a degree at lower continental fee levels and a similar number of British exchange students funded each year under the Erasmus+ mobility programme. For younger people, this is one of the primary symbols of the UK’s EU membership.

Finally, as a highly competitive and impactful sector, the UK’s transnational education (TNE) strategies are very much aided by single market freedoms with considerable scope for growth in such activity. Campus implantation is easier in a context of regulatory alignment than regulatory divergence, as are other forms of award-based collaboration. Our research strategies are intrinsically linked to EU funding regimes and programmes. We presently enjoy full participation and access rights to Horizon 2020, with an excellent funding and participation rate. EU-funded research projects and initiatives have been the source of vast funding for research in UK institutions and are playing a vital role in enabling and scaling collaborative research across European borders. Programmes of this type build relationships and interdependencies that naturally span out into other forms of institutional co-operation. In addition, the EU’s structural funds have enabled many universities and their Business Schools to develop infrastructure and capacity.

The threat of Brexit

Are all the above benefits really at threat? If we consider what happens in a ‘hard’ or ‘crash-out’ Brexit, some of these established benefits look to be at risk. In terms of access for EU students and workers, basic legal rights of access would change dramatically. Students would be treated like other international students in terms of visa requirements and would almost certainly face higher fees and new visa-based access requirements.

UK higher education is renowned for its two-tier pricing model with international students already facing higher study fees, visa requirements (and costs), and restrictions on post-study work. This would be the new reality for EU nationals studying in the UK and one could lead to a decline in demand. The Department for Education (DfE) is said to be preparing for higher fees for new EU students from as early as 2020. Academics and professionals taking up work in UK higher education would require visa sponsorship, which amounts to an administrative nuisance and (small) extra cost to all parties.

The UK would also be outside Erasmus+ and forced either to buy in, or to set up new bilateral exchange schemes. On top of this, there would be no ‘pay-outs’ from EU structural funds to part support infrastructure and capacity projects at institutions in eligible UK regions. Outside the EU, the UK moves from a position of centrality within impactful Horizon 2020 research programmes to life on the outside. In the face of competing investment priorities at national level, there is no certainty that current EU funding levels would be matched by substitute schemes.

A softer variant of Brexit would arguably soften the blow, especially one with a commitment to preserving freedom of movement for young people for the purpose of education and training. In this scenario, one would envisage bilateral protocols between the UK and the EU in keeping with those concluded between the EU and Switzerland.

Specific agreements would, of course, need to be negotiated and implemented. These would almost certainly maintain some of the current freedoms and benefits enjoyed under EU membership but this would be a menu-based approach with agreement to be struck on fees, rights of residence, post-study work entitlements, participation in the successor programme to Horizon 2020, Erasmus+, and mutual recognition of qualifications and diplomas.

Life beyond Brexit

Of course, the strength and resilience of the UK higher education sector must be taken into full account, as must the arguable benefits of a more independent path. Set against the so-called `Brexit penalties’ are the Brexit dividends as seen or understood by its supporters.  Taking a narrow view of potential reform to HE and immigration, UK institutions could expect higher per capita fee income from EU students and a potential reduction in the burden of student loan financing previously open to EU nationals, for which recovery rates are staggeringly low.

UK institutions have proven their ability to continue to attract international students in high number despite relatively high fee levels and even when visas supposedly function as an administrative barrier or psychological deterrent. The logic runs that if the product or service is good enough, demand will endure.

Pending immigration reforms driven by Brexit also extend the period of time that international graduates can stay in the UK in order to secure graduate-level work after completion of their studies. Planned rules will increase the time period international graduates are permitted to stay after graduation, from four months to six months, with a full year in prospect for PhD graduates. If this legislation comes onto to the statute books, then Brexit will arguably have improved the post-study work entitlements of half a million international students.

Brexit supporters will also remind us that whatever money is redistributed back to UK universities and Business Schools through EU projects and programmes pales into insignificance when compared to global net contribution. There is also broad assumption that substitute schemes will emerge at national level and with significant funding. Outside the formal structure of the EU, it is clear that UK-based Business Schools and researchers will find ways to collaborate with their European counterparts too.

Effects and impacts

Although the Brexit process has yet to come to a conclusion and the ‘end state’ remains unclear, it is abundantly clear that its effects are already being felt. One quick win for the UK sector has been the fall in the value of the pound on international currency markets, which has had the effect of making UK study more affordable; a sort of Brexit premium. 

Application and registration rates have held up, at least for now, although the fast rate of growth in EU applications for undergraduate courses experienced prior to the referendum has been lost. There are EU nationals on faculty and in administration teams across our institutions upset at developments and concerned over their future status. The ‘settled status scheme’ introduced by the government has allayed certain fears but the introduction and management of that scheme has attracted widespread criticism.

A significant number of EU staff and academics have left UK institutions citing Brexit as an influence on their decisions and applications for new posts have changed in profile for many institutions with a relative decline in applications from continental European academics. Some students have been confused about the extent and timing of rule changes that might affect them, especially as a whole series of supposed ‘independence day’ dates have come and gone. They and prospective entrants have faced uncertainty over the nature and timing of fee-related decisions as the UK has stumbled through without certainty over the start dates for new rules and regimes. 

Worries across UK higher education about future Erasmus+ and Horizon 2020 participation, have been linked to more immediate effects. Organisations across Europe have indicated that uncertainty about the UK’s continued involvement in European programmes is already causing problems. These include sharp falls in secured funding and requests for UK institutional/researcher involvement in Horizon 2020 project bids and applications.

But in a sense, we leave the biggest issue to last. Like other service businesses, the industry is better placed if the market is healthy and performing strongly. The first concern here is the most obvious one. Brexit is an assumed factor in the UK’s weakening growth rate. Apart from the knock-on effect on spending and earnings, there is ample evidence of Brexit-influenced relocation decisions. This may not amount to a ‘Brexodus’ of firms and jobs but there is a growing impact on the UK graduate jobs market, especially in areas such as banking and finance. After a bumper year for graduate jobs in 2015-2016, plans for graduate hiring by top employers have been downgraded. One annual survey (by research firm, High Fliers) has found an average 10% annual cut in graduate recruitment by private sector employees in the first two years subsequent to the EU referendum. Moreover, the requirement for firms to ride out Brexit uncertainties and fund expensive contingency plans is leading to short-term suspensions on investment decisions, for example, into management development training and/or commissioned research.

A final thought

As we await the final act of the great Brexit drama, it remains unclear what sort of sector the UK will finally have. One embedded firmly in the European Higher Education Area and subject to the full body of EU law, one connected to this area through some sort of independent deal, or one that is fully on the outside of it? The curtain falls on Beckett’s drama without Godot’s arrival. Luxembourg may be a tiny state but its Prime Minister might just have found the perfect way to depict and conceptualise this protracted Brexit drama.

Simon Mercado is Professor of Management and Campus Dean/Director for ESCP Europe Business School in London (UK).

Creating a beacon of culture in the darkness of war

Syrian-born businesswoman, Shireen Atassi, stepped away from a career in banking to launch a non-profit foundation in Dubai, promoting Syrian artwork and artists. She talks to David Woods-Hale about her unconventional career path, post-MBA

As part of AMBA’s 50th anniversary celebrations, we conducted 50 interviews with MBA graduates from across the globe, to celebrate the diversity of a global network of post-graduate business students. 

These stories showcase bravery, entrepreneurship, achieved ambitions, goals reached, careers changed, borders crossed and boundaries broken down. 

But, considering the global geopolitical environment, one story stands out from the rest. 

It’s the story of a woman who left her village in Syria – currently the world’s most violent country, according to the Global Peace Index – to complete her MBA, and then moved back to the Middle East in a bid to protect and promote the art and culture of her homeland. 

Shireen Atassi, CEO of the Atassi Foundation and an MBA graduate of Imperial College Business School, picks up her tale.

‘I grew up in a little town in the middle of Syria,’ she says. ‘My father was a partner in a construction company and my mother was a gallerist. I graduated from school, spent a year in Switzerland and then moved to Manchester, where I did a BSc in economics. I went back to Syria for three years. By this stage, my parents had moved to Damascus and my mother had another gallery there. I worked in a consultancy firm, and in the evenings, I worked at my mother’s gallery.’

Atassi is thankful for this experience, explaining that it gave her access to the worlds of both business and culture; but by 1996, she was ready to leave Syria for the second time.

‘Everything was too small for what I wanted and the opportunities were too few,’ she says. ‘I had a privileged childhood with access to lots of things, because of who my parents were. This wasn’t a path I wanted to go down and I wanted to open my own doors. I’m not someone who had a plan and worked according to that. All I knew was that I wanted to open doors and tick boxes on my own.’

Atassi opted to do a full-time MBA in London at Imperial College Business School. 

She explains: ‘A lot of people who do MBAs don’t know where they’re going. Some people want to change careers – from engineering or medicine to business. Others are like me with no masterplan and want to use the opportunity to regroup and broaden their horizons. Did the MBA give me a masterplan? No – but at the time it wasn’t an issue for me. I wasn’t keen to tell people where I wanted to go.

‘Instead, my MBA gave me a completely different perspective on business. As a consultant, you scratch the surface of business but you don’t lead companies. You talk big, but you don’t get your hands dirty and manage a business. The MBA gave me a well-rounded idea on the elements of how you would manage a business.

‘Back then, if you had an MBA it was either to be a banker or make money. It was almost surreal how students were motivated to think the bigger the words you use and the bigger your salary, the better your programme was.’ 

She pauses, before adding: ‘In saying that, the year I spent at Imperial was one of the richest in my life, academically, culturally and socially. It opened my eyes to a lot of the business questions that I hadn’t been able to answer when I worked in consultancy. I learned about the nitty gritty of managing and actually being in a business. 

‘I met my husband while I was doing my MBA and tried to find a job in London, but had to move to Dubai.’

Atassi received two job offers in Dubai, one from a young venture capitalist and one from established corporation Ernst and Young (EY). 

‘I chose Ernst and Young,’ she tells me. ‘It was a safer bet and I already had some experience as a consultant. This seemed the more conventional way to go. My hunch was telling me not to take it – but I did. But Dubai at the time was very young. Being a consultant is only as interesting as your clients and I have to say, my clients were not that interesting.’ 

In 2000, Atassi applied to work for Mars, which had built a factory to produce chocolate in Dubai; she was offered a different job to the one she applied for, finding herself on the operational side of business for the first time. She found it played to her skills.

‘I think I’m made for that kind of thing,’ she explains. ‘I loved operations and procurement. I managed a number of markets and was in charge of direct and indirect materials.’ 

In 2007, she decided to set up her own business – a consultancy firm for training and software around procurement and supply management. 

‘With hindsight, there were a few mistakes in my execution,’ says Atassi. ‘The timing was wrong. There were a couple of accounts that were close to being signed, but the [2008] recession materialised.

‘This was a male-dominated society. I walked into a boardroom of an oil company in Abu Dhabi to give a presentation on my software and it was a room full of men. One said to me:“where’s your team?” I was offended and replied“I am the team.” Had I taken a partner who was a male, who wore a suit, it might have worked better, but I have no regrets. Part of your success as a person is to accept these facts and deal with them because the world is not perfect. 

‘Even if I had set up my company in the US or UK, I should have understood that my clients were not small businesses,’ she continues. ‘They were large corporates and to walk into these big organisations, you need to have an appropriate corporate image. You need to play the game: I had big plans but I didn’t act like a big deal – this had an impact.’

A couple of years later, in 2010, Citibank in Dubai invited Atassi to come on board for six months, a contract that became nine months and then a permanent job. 

She says: ‘I loved it and I did damn well with them. I managed the Middle East and North Africa. I also co-managed Africa. My career was going well, but in 2014 it plateaued. I’d had a career path and I was worried about career progression.’

It was at this point that Atassi’s Syrian roots, and her immersion in the arts, through her parents, impacted directly on her career path. Like many ambitious business leaders, she came to realise that ‘sometimes life happens’, drawing you in a particular direction.

Due to the conflict in Syria, her parents had moved to Dubai in 2012. Her mother had been forced to close down her gallery in Damascus and had brought with her a sizeable collection of precious Syrian art and curiosities. 

‘I wanted to keep an open mind and an open heart,’ says Atassi. ‘I’d lived with this [art] my entire life. My parent’s home had been a cultural saloon, full of playwrights, artists and moviemakers, so it was something I’d always had in my life. 

‘We felt it was appropriate to counteract the narrative about the killing, blood and destruction in Syria, so we decided to put the collection online to show the world that Syria is a lot more than we see in the press. Syria is a multicultural, multi-ethnic, multi-religious country that has existed for thousands of years, in which people have lived together.’

The family had accumulated a sizeable collection of 500 pieces of artwork and decided to create a non-profit foundation to promote the artwork and the artistic production of Syrian artists all over the world. 

Atassi explains: ‘We wanted to tell the stories over and over again, because we were privileged enough to do this,’ she says. ‘With privilege comes responsibility towards the environment, family, country and friends. 

‘I’m privileged to have been able to go to Imperial College Business School. I felt like I lived in a bubble in Dubai – but I’m a normal person and when I feel strongly about something I find it hard to sit back and watch.’

The Atassi Foundation was incorporated in 2015. Dubai’s legal structure doesn’t allow the existence of not-for-profit organisations, so the company was registered in Lichtenstein and launched in March 2016. 

‘It’s just me and my mum,’ says Atassi. ‘We have a small team and we work from home. We do everything from inventory and stock through to curating, marketing, launches, websites and making contacts.’

She adds: ‘I went against everything the Business School taught me and set up the business without a strategic plan. I just needed to start.’

Since its launch, The Atassi Foundation has collaborated with museums and leading art galleries in Dubai, Toronto and London. In Dubai, it produced the biggest Syrian art show of all time and has commissioned research into the Syrian Cultural field. 

‘It’s been surreal,’ says Atassi. ‘But now, 14 months after launch, I’m taking a step back. 

The first year was great in terms of PR – we set ourselves on the map. Anything that’s happening in the arena of Syrian arts and culture is landing on my lap, so I’m taking a step back, to re-strategise. 

‘We need to think about funding,’ she admits. ‘We need to use our budget in the most sensible way. If we spend money in
the wrong place, we can’t replace this, so we want to build funds to do what we need to do.’ 

Does Atassi feel she made the right choice to forgo financial services for the world of art? 

She considers the question carefully. ‘I don’t have a big ego,’ she says. ‘But I was developing this at Citibank – I didn’t recognise myself. I could have gone places with that career, but it felt like I was wearing someone else’s clothes. At the time I wasn’t aware of that. It felt strange. Now, my commissioning committee and my board of directors are my parents and myself. I have teenage children. I’m able to do what I love.

‘I’m telling a story and it can’t get more personal. It’s my life story and the story of my mum’s art business. This is a beacon of culture. I’m talking about my country and I’m telling my story. I’m privileged because I can tell the story, but I’m just one of many people trying to tell it.’

She pauses again before adding: ‘I understand how humanitarian education and human development is a priority. We’re talking about millions of displaced Syrian people and I can’t begin to tell you about the level of hatred this war in Syria has created. It’s like opening a Pandora’s box of evil. But none of this [evil] has any relevance to Syrian people. ISIS has no relevance to us – they’re not home-bred. It’s out of our hands. 

In spite of this she adds: ‘It just takes more people to do what we’re doing. I was speaking to a non-governmental organisation in Lebanon, setting up schools in the country. They’re doing marvellous things.

‘When you decide to do something like this – and I can’t decide whether I’m a social entrepreneur or a cultural patron – you’re taking a very uncalculated risk. You have no idea how your career is going to go. If I decided to go back into employment, what would I do? Where has this put me on the career map? I’ve spent 20 or more years working in a corporate environment. 

‘No one in this part of the world sets up an art foundation. I didn’t know how it would be perceived. In Syria, entire streets were being wiped out and I was setting up an art foundation, but I’m doing this based on a very important conviction. Art and culture hold a mirror to society; they tell stories. There’s a lot of responsibility on the shoulders of the artists themselves. They bring people together. In the situation we’re in it’s taken a completely different meaning.’

Given Atassi’s experience, her passion for art and the dramatic change from working in banking, to telling the world about the threatened artwork of Syria, virtually single-handedly, does she see herself as part of a new breed of ‘socially responsible’ MBA? 

She says: ‘I don’t think there’s ever one-size-fits-all for an MBA graduate. We need capitalists, bankers and entrepreneurs in the world, but from my perspective, Business Schools needs to nurture an awareness among students. I came to an MBA to open doors, not knowing what doors I wanted to open. Business Schools are evolving like everything else. 

‘When I went to Business School, the internet wasn’t available to everyone. The world was different, but we have to put everything into perspective in the right setting. Education doesn’t stop when you leave Business School, you always have to be on top of things or you’ll be left behind.’

So what is her advice for her MBA student and graduate peers? 

‘In terms of thinking about investment for an MBA student, you’ll ask a lot of questions,’ she says. ‘Will the MBA open your eyes to things you’ve never considered doing before? 

‘I think I listened to my head too much and not my heart. When I think about it, it was always open to me to join the art business, but I wanted to tick boxes on my own – it was my head and not my heart. I didn’t know any better then. 

‘My advice is to dig deep and question yourself about why you’re doing things. Don’t get stuck in corporate stress – you could realise you’re on the wrong track.’ 

As our conversation comes to an end and Atassi considers the next chapter of her story, for herself and for Syria, she muses: ‘Where would we be if we weren’t optimistic. I’m not expecting miracles but I’m definitely optimistic. 

‘What I’m doing is not selfless – it’s incredibly selfish. I’m buying myself back. I used to cry, but not anymore. I know I’m doing something worthwhile; I’m not changing the course of history; I’m not going to stop the war in Syria. I’m not going to remedy the agony of the mothers, the fathers or the children who have lost it all.

‘What I’m doing now doesn’t just excite me; it gives me the oomph and strength to make this work. It’s more than a challenge. What’s the worst that can happen to me [in Dubai]? We’ll still have food on the table. 

‘I owe this to my children. If you ask them, they might not have a Syrian passport, but they’re Syrian. I owe it to me and I owe it to them.’