Public Universities and Private Money

There are lots of ways for the private sector to cooperate with traditional universities. In the field of science this can take the form of joint research, or building some sort of business incubator to get fledgling ideas out of the lab and into commercial application.

But in business schools, collaborative models have been frustrated by the Professors’ demand for ‘academic freedom’ – meaning complete autonomy from the influence of the corporation. Business Schools are happy to take the company’s money in exchange for naming rights of their School, but don’t offer them any business advice, thank you.

Yet, at the same time, the world’s major corporations have been telling us that a good number of business schools are not doing a particularly good job at educating business graduates. The pace of change in the business world is so fast that companies have to provide regular education to their people anyway. Witness the massive growth in ‘corporate universities’, which now number a staggering 2,000, just to keep their people up to speed on latest developments.

It was only a matter of time before things would crack. Companies know they can run universities, and do it well. Companies also know that most business schools are stuck in the mud. Why should companies keep giving million dollars donations for naming rights to programs and schools, and then have to provide their own education to the students once they graduate anyway?

It finally happened: a company that was in negotiations with a university realized that a multi-million dollar donation wasn’t money well spent, and it walked away to set up its own university so it could achieve the educational objectives that it intended.

The Homburg Group of Companies is a multi-billion dollar international real estate conglomerate that does everything from property development to asset management. It even launched a real estate bank in Canada. This company is innovative, and it knows how to achieve its strategic objectives.

What the company came up with is making waves, and the traditional public universities don’t like it one bit. Working through The Homburg Global Education Project, Homburg is establishing an Academy in the Swiss city of Zurich, a research and professional development Institute in Canada, a co-branded book series with Oxford University Press, an eCampus virtual learning environment to reach students with on-demand video-based learning, and it gets the ability to develop Bachelor of Real Estate and Master of Real Estate programs that will be relevant and produce graduates that are highly desirable to industry.

It’s not just the traditional public university business school that needs to worry. All of this is coming at a time when the Obama Administration is pressing for ‘gainful employment’ legislation so that private universities actually prepare students for the job market. What a novel concept.

Watch this space. Not only is the Homburg Global Education Project an innovative new initiative in university-level education in Real Estate - a field the company has excelled in for over 40 years - it is also showing the world that there is an alternative to forking over cash to universities with little in exchange.

As the public universities face major budget cuts, as private universities struggle with ‘gainful employment’ requirements, and as companies become more careful with their dollars, the business world will look at the Homburg initiative as an alternative model for their education investments.

If they do, Universities around the world will turn pale, and shake.