Japan's Search for U.S. Colleges

By Susan Tifft

They own Los Angeles' Arco Plaza. In New York City they have scooped up the Exxon Building, the Algonquin Hotel and the vaultlike home of Tiffany & Co. They are beating the U.S. at everything from VCRs to semiconductors. And now they are trying to buy U.S. colleges.

In recent months Japanese businessmen and educators have quietly offered to bail out several financially strapped schools in return for control of their governing boards. The purpose: to expand study-abroad opportunities for Japanese university students. "The American higher-education system is the best in the world," says Julia Ericksen, vice provost of Philadelphia's Temple University. "The Japanese recognize that."

So far, there have been no outright takers, but a few colleges have negotiated deals that stop short of selling their independence. This spring Warner Pacific College, a small (enrollment: 400) church-affiliated school in Portland, Ore., is expected to approve the sale of 49% of its physical plant to Amvic International, a Japanese company that operates English-language schools in Japan. The $6 million price tag includes an agreement to lease the facilities to the college for 30 years and to make the firm's president a regent of the school. The transaction benefits both parties: Amvic's direct link with the U.S. college gives it a valuable marketing tool back home, and Warner Pacific is relieved of its crippling debt.

Another church-affiliated institution, Phillips University in Enid, Okla. (enrollment: 960), was approached last spring by Kyoto Institute of Technology, which offered $24 million for the entire school. Phillips' president, Robert Peck, refused. "Colleges are not bought and sold," he says. "We're not Quaker Oats." But he was under intense pressure to accept the offer from Enid's town fathers, who in March 1988 paid $14.3 million to keep the campus afloat, and now charge the university rent. As a compromise, Peck let Kyoto underwrite a summer program for up to 50 Japanese students.

While the Japanese continue to seek academic footholds in the U.S., a number of stateside universities are bringing American-style education to Japan. In 1982 Temple University became the first U.S. school to establish a branch campus in Japan. In a new nine-story Tokyo building financed by a separate Japanese board, some 1,600 Japanese students attend classes taught in English by Temple professors. Last fall Dartmouth's Amos Tuck School of Business followed suit with Japan's first-ever English-language M.B.A. program. More than 40 other institutions, including Texas A & M and M.I.T., are negotiating similar deals. "The Japanese lack preparedness for globalization," says Chikara Higashi, president of Temple University Japan. "These institutions are an ideal means for them to overcome the language barrier and other obstacles."

Allowing Japan to buy into U.S. schools worries some American educators, who fear this would be the ultimate technology transfer. But the deals also provide vital links to Japanese business, a chance for American students and faculty to be exposed to that country's culture, and, not incidentally, a source of revenue for U.S. institutions. "I see it as an opportunity," says George Smith, assistant to the president at Warner Pacific. "There is no question that higher education will be more international in the future."

With reporting by John E. Gallagher/New York and Seiichi Kanise/Tokyo