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INSTITUTE FORUM

Friday, 28 August 2009. INSTITUTE FORUM. Sequence of Presentation. Financial Performance Student Enrolment Initiatives (Grouped under the 4 Strategic Themes of the “AIT Strategy 2013”) AIT: Realities, Challenges and Opportunities New Possible Financial Model for AIT :

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INSTITUTE FORUM

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  1. Friday, 28 August 2009 INSTITUTE FORUM

  2. Sequence of Presentation • Financial Performance • Student Enrolment • Initiatives(Grouped under the 4 Strategic Themes of the “AIT Strategy 2013”) • AIT: Realities, Challenges and Opportunities • New Possible Financial Model for AIT: Public-Private-Partnership (PPP) • Q & A

  3. Financial Performance

  4. 2006-2009 Actual v 2009 Budget FUND 10

  5. 2006-2009 Actual v 2009 Budget FUND 10 • Higher (Non-Operating) Expenditures in Budget 2009 - Key Items Include: • Strategic Investments 34 M • Termination Package to Staff on Account of Outsourcing 28 M • Contingency for Retroactive Salary Adjustments 7.6M and Salary Increase 18.46M • Net Effect from Outsourcing to Sodexo 4 M higher costs • Charter Promotional Activities 5 M • Salary for Vacant / Additional Faculty and Employee 26 M (budget higher than 2008) • Subscription of e-Book 5.15 M • AIT Branding 2 M • General Increase in Materials in 2009 budget (from 2008) about 20M

  6. 2006-2009 Actual v 2009 Budget SET

  7. 2006-2009 Actual v 2009 Budget SERD

  8. 2006-2009 Actual v 2009 Budget SOM

  9. 2006-2009 Actual v 2009 Budget FUND 21

  10. 2006-2009 Actual v 2009 Budget FUND 30

  11. 2006-2009 Actual v 2009 Budget FUND 21

  12. 2006-2009 Actual v 2009 Budget FUND 30

  13. Student Enrolment

  14. Some Observations • Application Drop. The overall decrease in enrolment in Aug 09 by about -17% seem to reflect the institute-wide reduction of -21% in applications. • Decrease in Donor-Funded Scholarships. Of the schools, the most affected is SERD which rely primarily on full scholarships since most of its programs target disadvantaged sectors. For example, 45 Netherlands scholarships were available in 2007 but no longer available in 2008 and 2009; CIDA, France, Austria ADA, STARR Foundation full master's scholarships are also no longer available in 2009. We also received a reduced number of Norwegian and Sida scholarships in 2009 as compared to 2007 and 2008. • Decrease in Sponsored Scholarshipsfrom HEC Pakistan, UOB Pakistan, MOAC Thailand, MOET Vietnam, IFP-Ford Foundation, EVN, PetroVietnam, etc. • Decrease in Externally-Funded Students, for example from NSTDA, Rajamangala University of Technology-Thailand, Department of Highways – Thailand, Indonesian Agency for Agricultural Research & Dev't (IAARD) – Indonesia, etc.

  15. Initiatives (Grouped under the 4 Strategic Themes of the “AIT Strategy 2013”)

  16. AIT Strategy 2013 Four Strategic Themes • Internationality as Regional Network Institute • Excellence and Relevance in Education Research and Outreach • Positioning and Branding • Development and Resources Management

  17. 1. Internationality as Regional Network Institute • New AIT Charter • ASEAN MDG Center of Excellence • Yunus Center at AIT • Asian Center for CSR at AIT (with CSR Asia) • Collaboration with Finnish Ministry of Foreign Affairs on Energy Environment Partnership in the Mekong Region • Planned AIT Project Offices in Shanghai and Kathmandu • New Regions – New Opportunities and Possibilities

  18. 2. Excellence and Relevance in Education Research and Outreach • EuroAsia Partnership Projects (Erasmus Mundus) • Center for Learning Innovation and Quality (CLIQ) • Professional Programs • Undergraduate Programs that build on AIT strengths and institutional networks • Summer Program • AIT Consultancy Service • Technology Licensing and Venture Capital Office • AIT City Campus • Conference and Launching of Center of Excellence in “Sustainable Development in the Context of Climate Change”

  19. Sponsored & Contracted Projects

  20. Fund 30 Academic Programs

  21. OVERVIEW OF RESEARCH ACTIVITIES FOR 2008

  22. 3. Positioning and Branding • “AIT Strategy 2013” and “Vision 2030” • Strengthening Alumni Networks • Engaging Professional Consultants for Fundraising, Positioning and Marketing • Appointment of Full-time Vice President for Resource Development • Strengthen Media and Communications Unit 

  23. 4. Development and Resources Management • Salary Rationalization and Reclassification of Positions • Responsibility Center Management (RCM) and Results Based Management (RBM) • Integrated Facilities Management Contract with Sodexo • Possible Outsourcing of IT Functions and Other Non-Core Functions for Increased Efficiency • Public-Private-Partnership (PPP) Model

  24. AIT: Realities, Challenges and Opportunities

  25. Governments • Political support : new linkages • Support education / research • Scholarships Private Sector AIT • Innovative ideas • Research/ education • facilities • Joint program education/ • research • Scholarships • Competencies / experience • Internship • Employability • CSR • Need- based • orientation • Demand approach Market contact ==== > Continuous Improvement

  26. AIT CHALLENGES Rapid Change Complex Environment Tight Competition Challenges No Core Funding High Technology No Clear Ownership Monopoly Correlation (Expenditures  Performance) Input- based Planning of Activities Productivity / Efficiency

  27. Drew Faust, President of Harvard February 2009 “It is our collective obligation to face the situation with the right balance of short-term focus and long-term ambition, for ourselves and for the generations whose opportunities will be shaped by our choices…….For Harvard, as for many other colleges and universities, our challenge is to confront the new economic realities and intelligently adapt ourselves to them, while at the same time affirming and strengthening the enterprise of learning and discovery that lies at the heart of what we do.”

  28. The Valley of Death No Core funding AIT Future Development AIT at Present

  29. Answer : Not donations BUT Business Thinking Concept : Not donorship BUT Partnership / Networking Efficiency / Innovation Driven Institute / Value Creation AIT in the 21st Century AIT Future Development AIT at Present Industrial / Private Sector Relations / Flexible and Responsive to Change

  30. New Landscape forHigher Education Marketing • Mature Students & Lifelong Learning (education for professionals) • Enhancement (education as personal enrichment) • Target Countries (one size does not fit all; select target markets and ensure product meets needs) • Unlikely to recruit in a big way from Europe or N. America • Emerging markets (e.g. Africa) • Greatest growth in Asia

  31. from Olsen 2002 p3, after IDP

  32. New Possible Financial Model for AIT: Public-Private-Partnership (PPP)

  33. Prime Minister Abhisit Vejjajiva 6th ASEAN Leadership Forum June 2009 “We need to rebuild and strengthen our economies as well as regenerate sustainable growth and development. ASEAN is well placed to do this, but it will have to be a collective effort on the part of governments and all sectors of society. The private sector in particular has an important role to play”.

  34. National Progressive Index for ThailandUnveiled by Prime Minister Abhisit Vejjajiva on 22 August 2009 PROGRESSIVE • P - People • R - Reconciliation • O - Openness • G - Good Governance • R - Regional Integration • E - Economic Recovery • SS - His Majesty the King's Theories on Sufficiency Economy and Sustainable Development • I - Innovation • V - Vision • E - Education

  35. The Benefits Thailand Receives from Joining as a Partner of new AIT Charter “To fulfill the government’s policy in promoting AIT to be a site of an international organization and to support AIT to be an organization that is able to expand its capacity in promoting international cooperation in higher education and human resource development; research and development in science and technology; assistance for Asian development which can benefit in the promotion of closer relations; as well as promoting economic and social development of Thailand and the countries in the region.” “Elevating AIT’s status to be internationally recognized” Article published by the Ministry of Foreign Affairs Thailand Matichon Newspaper, June 2009

  36. Major transformation of the relationship between universities and Society that also affect the universities “publicness” • The increasing difficulty that governments experience in providing a level of funding sufficient to accommodate growing student numbers and support costly research facilities; • The increasing use of market or quasi-market mechanisms in the external and internal governance of universities; • The increasing expectations as regards “value for money”, relevance, as well as “excellence” in higher education and research; • The increasing global competition for students, academics and funding; • The rapid emergence of distance and cross-border education; and • The rise of private non-profit and for-profit higher education providers in certain regions and countries around the world.

  37. The International Finance Corporation (IFC) of the World Bank Group Actively engaged in Private Education Cites the following Strategic Reasons for doing so: • To support socially responsible and sustainable development through for-profit and not-for-profit institutions. • To expand access to quality education to people from all income groups. • To introduce innovative means of financing and delivering education services. • To improve quality standards in education. • To help students and institutions obtain access to financial support. • To complement public financing and provision to achieve public education goals.  

  38. Thailand Outlook for the “Education Sector” Thailand 2009 Report, The Oxford Business Group “Increasing private participation in the system could be beneficial by boosting investment and competition and encouraging knowledge transfers. Higher standards should continue to reinforce Thailand’s reputation”.

  39. Some of the Common Misconceptions about PPPs • Public private partnerships are the same as privatization; • By entering into a public private partnership, public sector loses control over the provision of services; • Public private partnerships apply only to infrastructure projects; • The principal reason for government entering into public private partnerships is to avoid debt; • Public sector employee will lose under public private partnerships; • The cost of service will increase to pay for the private partner's profit; • There are only two partners in a public private partnership

  40. Proposed PPP Model for AIT • Strategic Partnership • AIT Brand Name Would be Further Strengthened • Investments Towards • Campus Upgrading • New Investments • Building of Endowment Fund • Investments in 7-8 new Campuses Abroad • Management Expertise • Marketing, Finance, HR Functions • Management Contract

  41. Status Update on the PPP Concept • AIT has started informal discussions with some of the resident members of the Board of Trustees, Executive Committee, Institute-level Advisory Board, as well as School and AIT Extension Boards, and at the same time also written to several of AIT’s partner institutions, organizations and individuals in Asia, Europe and the US including alumni, former senior administrators, former faculty and staff etc. in seeking their views and comments on the PPP,  as well as exploring whether they or organizations / institutions through the networks and contacts would be interested in entering into discussions with AIT.

  42. Status Update on the PPP Concept • Letters were sent to : Presidents of Universities and Partner Institutions in countries including Japan, Korea, Singapore, Sweden, France, Netherlands, Thailand, Australia, US, China, Norway, Taiwan, India etc. Some companies like Sodexo; the Amata Corporation Public Company Limited; Charoen Pokphand Group; Lee Foundation; Tata Sons Limited etc. were also contacted • A lot of feedback has been received, in general expressing strong support for this concept, and citing it as being the right way or direction for AIT to proceed into the future. • Expressions of Interest from Laureate, Apollo Group, Siam Cement Group, Amata Corporation, Nanyang University of Technology etc. 

  43. President Barack Obama Quote from interview with Fortune Magazine April 2009 “My hope is that by taking the steps we are taking today…… it will help speed the day that the government can get out of the way and let the private sector do what it does best - innovate, create jobs, and grow the economy.”

  44. Concrete Discussions with Laureate

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