Why is Indian industry divorced from academia?

Industry indifference to academia in india is in sharp contrast to the heavy interaction and vibrant engagement which characterises the industry-academia relationship in the developed nations of the first world. Dilip Thakore investigates

In a society which revels in its contradictions, it’s yet another irony. Indian industry, the major user of the estimated 2.5 million graduates and diploma holders who stream out of the nation’s 311 universities and 15,600 colleges annually, is only peripherally — if at all — engaged with the higher education system. So why is Indian industry divorced from academia?

Although it is normative practice for industry leaders to serve on the governing boards of institutions of higher education, these positions tend to be more honorific than executive. In post-independence India’s rundown, down-at-heel institutions of education — especially of higher education — which are unsuccessfully struggling to come to terms with the new demands of the 21st century, real power and authority is exercised by shadowy bureaucrats of the education ministries aka the Union and state ministries of human resource development. They lay down stringent laws and procedures for pliant career academics of the University Grants Commission (UGC), the All India Council for Technical Education (AICTE) and institutions of higher learning to implement. ‘Institutional autonomy’ — words which have wide currency in Indian academia — is practised more in the breach than observance.

“Though it is the major end user, Indian industry is insufficiently engaged with Indian academia and is doing very little to raise standards in Indian education. Such interventions that corporates and business houses have made and are making are ad hoc, outside the government’s budgetary process and usually unsustainable. Moreover there is not only a paucity of private sector expenditure data, there is a marked reluctance within industry to provide credible information about corporate investment in education initiatives,” says Dr. M. R. Narayana an alumnus of Mysore and Tsukuba (Japan) universities and currently professor of economics at the Institute of Social and Economic Change (ISEC), Bangalore.

Industry indifference to academia in India is in sharp contrast to the heavy interaction and vibrant engagement which characterises the industry-academia relationship in the developed nations of the first world, says Prof. Narayana. Though it’s fairly well-known that some of the most venerated American universities such as Harvard, Yale, Amherst etc were promoted by business and industry leaders, it’s less well known that the remarkable rise of contemporary Japan from the defeat and nuclear annihilation of the Second World War into the world’s second largest economy owes not a little to its private universities. “In 1998 of Japan’s 604 universities and 588 junior colleges, 73.5 percent and 85.5 percent respectively were private sector institutions. The capacity created in higher education by a very large market-driven private sector enables 68.3 percent of college-going age students in Japan to avail tertiary education against 6-7 percent in India. This is the socially beneficial fallout of active industry and private sector involvement with higher education in Japan,” adds Narayana.

This is one important explanation why in the period 1950-85, the once mocked and derided Japanese industry led post-war Japan’s development charge enabling it to record 10 percent plus year-on-year GDP growth rates and miraculously morph into one of the world’s largest economies in terms of GDP per capita (ppp $26,940 cf. India’s $2,670). And though the past sins of omission and commission of its banks and financial institutions have sharply reduced its annual rates of economic growth, Japan provides an object lesson of the advantages of a healthy industry-academia interface and of the virtues of industry and business-led private participation in higher education.

On the other hand Indian industry is paying a heavy price in terms of downtime and training costs for its disengagement with academia. Because of a complete — and widening — mismatch between the requirements of industry and the output of universities and institutions of higher education, most corporates have to invest heavily in in-house education programmes to bring industry-unready graduates upto scratch. Corporate heavyweights Hindustan Lever, ITC, Infosys Technologies, Tata Consultancy Services etc are running full-fledged collegiate-style training institutions to make good the glaring deficiencies of India’s moribund institutions of higher education. According to Hema Ravichandran, vice president (human resources) of the blue-chip transnational Infosys Technologies Ltd, the company spends Rs.200,000 on each graduate it recruits to make him/her industry ready. This isn’t a small sum. It’s more than the aggregate tuition fee a student pays for a four-year study programme in any of India’s highly rated Indian Institutes of Technology (IITs). And given that last fiscal Infosys recruited 11,000 graduates, it adds up to a pretty penny.

Not surprisingly given that the fast-track infotech majors recruit 35,000-40,000 professionals annually, they have awakened to the advantages of promo-ting IIT-style dedicated institutions of professional education which would cut training costs and time. According to a report in the Business Standard (March 25) several front-line IT majors including TCS, Infosys, IBM, Wipro, HP and Cognizant Technologies are planning a consortium to promote “a chain of professional education institutes for service sectors in the country” for which purpose they are drawing up a memorandum to be presented to Union IT minister Dayanidhi Maran seeking his endorsement of the project proposal.

According to Atanu Mukherjee, a director of Cognizant Technologies and reportedly the main driver of an appealing proposal to promote five private sector institutes of professional education in the metro cities at a cost of $200 million (Rs.900 crore) each, “the proposed chain of professional education institutes will be a win-win situation for IT companies as well as for talented young job seekers”. “We have to impart seven-eight months training to a fresh recruit. During the period the company is spending a lot on training as well as salary for making them market ready. Now if we have professional institutes like what we are thinking (sic) then the companies will have ‘market ready’ freshers and we could earn some revenue too. We have already spoken to the IT minister on this issue,” Mukherjee told Udit Prasanna Mukherji of the Business Standard.

But overdue and welcome as is this proposal, at the moment it is a pie in the sky which will take several years to come down to earth. Meanwhile the immediate and urgent need of the Indian economy which is growing at a fast clip of almost 7 percent per year is for employable, even if not fully-skilled graduates from its institutes of tertiary education. Quite evidently left to its own devices Indian academia won’t be able to meet the rising requirements of Indian industry unless the latter gets actively (as against passively) engaged with teaching-learning and research activities on academic campuses.

For one, the output of India’s tertiary education is pathetically inadequate with only 6-7 percent of youth of college-going age (18-23) enrolled in institutions of tertiary education. Secondly the quality of education dispensed in the great majority of the country’s education institutions is so poor that the pool of ‘educated’ unemployed on the registers maintained by the state governments has grown to over 41 million. Assuming that only the very desperate register in government employment agencies, it can be safely assumed that the actual number of ‘educated’ (i.e literate) unemployed within the Indian economy is over 80 million.

Despite this massive pool of unemployed, paradoxically there is an acute shortage of skilled and productive professionals in every sector of the Indian economy. This is evidenced by the growing number of personnel search and head hunting firms which are flourishing in India’s big cities. The conclusion is inescapable: the assembly lines and degree factories of Indian academia are churning out huge cohorts of unemployable youth unsuited to the needs of the Indian economy and industry in particular. And for this Indian industry which has stood aloof from academia, leaving the task of education of the world’s youngest population to the inexpert care of government bureaucrats, is as much to blame as supine academics and the nation’s notorious bureaucracy.

“Contrary to popular belief the initial impetus to higher education in the US didn’t come from industry and business. Industry leaders became involved only in the second phase when they promoted and developed great institutions such as MIT and Stanford. The initial impetus to America’s much venerated universities was given by government which gave them land grants and resources they needed to get started. But thereafter they were given the freedom to function without interference from government. This is the most important point to be noted,” says Dr. Manesh Shrikant a distinguished alumnus of the Harvard Business School, Cornell, Michigan and Illinois universities and currently honorary dean of the S.P. Jain Institute of Management & Research, Mumbai which he has shaped into one of the top ten B-schools in India.

According to Shrikant, government policy in post-independence India has been the mirror opposite. “If resources are given by government it wants total control of the institution. As a result today we are confronted with the sad situation that most of our institutions of higher study — except for a handful such as the IITs and BITS (Birla Institute of Technology Sciences) — are either commercialised or comprehensively bureaucratised. Education is almost completely politicised with government servants perpetually scheming to get their own favourites into faculty positions. This is in sharp contrast to the US or Singapore where governments facilitate and motivate institutions of higher education to excel academically,” laments Shrikant.

Box 1

Industry-academia interface: study of contrasts

There is general lack of awareness within the boardrooms of Indian industry that the industry development success of the OECD or G-8 industrial nations is primarily due to their strong education — particularly higher education — systems. Universities in the US, Japan, Britain and France which attract millions of students from around the world, are not mere teaching institutions but powerhouses of industrial and scientific research. Generously supported by government, business and industry, western and Japanese universities staffed by the most brilliant minds of their societies, are on the cutting edge of research and churn out thousands of products and processes which are quickly patented and taken to market by entrepreneurs and corporate leaders.

Little wonder America’s universities attract massive funding from industry and business. Harvard University’s endowment corpus estimated at $69 billion (Rs. 252,000 crore) is reportedly the second largest non-government corpus fund after that of the Holy See of the Vatican. Yet corporate and business funding of education institutions is not limited to America’s most high-profile institutions of education. Every school, college and university is supported by local businessmen to lesser and greater degrees by way of donations for labs, libraries, buildings and sports facilities. Moreover over the past half century in particular, through sustained marketing and fund-raising efforts the managements of America’s universities have created a “giving back” culture of institutional support which prompts graduates and alumni to make provision for their alma maters in their wills and bequests.

In sharp contrast Indian industry is myopically disengaged, if not wholly divorced form Indian academia. Though the pioneers of Indian business such as J.N. Tata and G.D. Birla promoted strong and durable institutions of education, their heirs have been content to keep them running rather than promoting new institutions of similar scale. During the dirigisme socialist era, the captains of Indian industry were satisfied with leaving higher education in particular to the Central and state governments which have predictably leveled down India’s once-great universities and colleges to the status of mere teaching factories churning out an estimated 2.5 million substandard graduates who require extensive — and expensive — in-house training within corporates and firms.

Following the belated economic liberalisation and deregulation initiative of July 1991, Indian industry has become marginally more aware of the vital linkage between the education system and business and corporate productivity. However its engagement with academia is tentative and ritualistic rather than real. Information about corporate expenditure, outlays and donations to education institutions and causes is difficult — if not impossible — to obtain. 

For example, the Bangalore-based infotech major Wipro group (sales revenue: Rs.8,619 crore) has derived huge mileage by projecting itself as a champion of elementary education. Currently Wipro runs two programmes — Wipro Applying Throught in Schools (WATIS) and its Learning Guarantee Programme. The former is administered by Wipro Ltd and the latter by the Azim Premji Foundation (APF) to which the company’s promoter-chairman Azim Premji (India’s richest individual in terms of market value of shareholding) has contributed an unspecified corpus amount. While under WATIS teachers in upscale private schools are provided skills upgradation training, APF covers 1,443 government schools (out of a total of 48,000 institutions) in Karnataka and gives cash awards (Rs.5,000-20,000) if through their own unaided efforts they improve education standards to pass learning measurement tests devised by APF.

Quite obviously the actual investment in education upgradation under both these programmes which have received widespread media publicity is small, especially when weighed against the hard fact that because of corporate income tax exemption on export income, Wipro (as all other IT companies) enjoys a prodigious annual windfall estimated at Rs.500 crore. Repeated requests byEducationWorld for Wipro’s actual investment in education have proved futile. “While Wipro is investing significant sums in the WATIS initiative, merely talking of (sic) expenditure without capturing the approach and programmes of the initiative would not do justice to the effort,” says Sandhya Ranjit, manager (corporate communications) of Wipro in an e-mailed reply to this publication. Numerous e-mail messages, and phone calls to Dileep Ranjekar, director of APF, yielded nil response.

On the other hand Dr. Dale T. Knobel president of the state-of-the-art privately promoted Denison University (estb. 1831), USA, attributes America’s emergence as the premier higher education destination of the world which attracts an estimated 200,000 foreign students annually, to American industry’s active engagement with its 2,364 universities, not only in terms of continuous research funding but also by way of a stream of grants, donations and bequests. “Though about two-thirds of students in higher education are enrolled in publicly-funded universities, the number of smaller privately promoted universities in the US is greater than of government funded institutions. It’s particularly pertinent to note that some of America’s most venerated universities including Harvard, Yale, Amherst among others were — and remain — private institutions which receive continuous support from industry and business by way of research assignments, infrastructure development grants and donations. Indeed but for the continuous support of industry and alumni, America’s university system would collapse,” says Knobel.

That post-independence India’s rampantly socialist governments — as determined to capture the commanding heights of Indian education as of the economy — have done little to facilitate or motivate industry and/or private participation in higher education is indisputable. Most of the country’s respected private sector promoted institutions of higher education are of pre-independence vintage. The Birla Institutes of Technology, Pilani and Ranchi, and the Indian Institute of Science, Bangalore promoted by the business house of Tata, for instance. And though during the past five decades since independence, industry promoted institutions such as the Tata Institute of Social Sciences and Tata Institute of Fundamental Research have been established, they are dwarfed by government promoted institutions such as the Council of Scientific and Industrial Research which has 38 laboratories, 80 extension centres and 21,000 employees but few achievements in terms of scientific breakthroughs to their credit.

True by dint of perseverance, several driven philanthropists and education missionaries promoted quality institutions of higher education which have since been conferred the status of deemed (i.e non-government) universities. But to date there are only 85 deemed universities included within the aggregate number of 311 across the country. And to get an idea of the near-impossible terms and conditions imposed upon committed edupreneurs by nit-picking and obstructive educrats, The Pais of Manipal, a biography of the legendary Dr. T.M.A. Pai who promoted the country’s top-rated Kasturba Memorial Medical teaching hospitals in Manipal and Mangalore (Karnataka) by veteran Christian Science Monitor journalist Selden Menefee, makes poignant reading. These state-of-the art teaching hospitals were inaugurated in 1953. The Manipal Academy of Higher Education (MAHE) which includes medical and engineering colleges, was accorded deemed university status in 1993. Meanwhile a private member’s bill to encourage promotion of private universities introduced in Parliament in 1995 has been languishing there ever since.

Yet despite official hostility and obstructionism, private initiatives in higher — especially professional (medicine, engineering and business) — education is an idea whose time has come. Given the insistent pressure for education and with wasteful Central and state governments with their ballooning fiscal deficits unable to augment capacity, private schools and colleges and even self-styled universities are mushrooming across the country. For example, the southern states of Tamil Nadu (pop.62 million) and Karnataka (57 million) boast 106 and 243 privately promoted engineering colleges and over 900 privately promoted and financed B-schools of various shapes and sizes offering variable quality education are operational across the country.

By definition the creation of additional capacity through promotion of private universities and institutions of higher education is a long-term affair. Therefore a growing number of educationists are advocating that industry and corporates begin to more actively engage with academia by undertaking relatively modest projects such as establishment of institutional libraries, laboratories, provision of scholarships and in particular outsourcing research projects to universities, colleges and institutes to create income streams for them, while simultaneously connecting them with industry and business.

“With higher education becoming increasingly specialised, continuous industry-academia interaction is a vital necessity. Today most product and process breakthroughs in developed countries such as the US, UK and Japan are through industry-institute partnerships. Industry and corporate leaders need to become involved with curriculum design and development of skilled manpower in institutions of higher education. With constant change and innovation being a feature of industry, especially in IT, biotechnology and pharmaceuticals, education institutions have to absorb change and constantly evolve to provide manpower to match industry requirements,” says Dr. Arun Balakrishnan a post doctoral research fellow at the Cancer Research Laboratory, University of California, Berkeley and director of the department of biotechnology at Anna University, Chennai.

Unlike most academics, Balakrishnan is fairly satisfied with contemporary Indian industry’s engagement with academia and avers that Anna University has been quite successful in signing up several corporates including EID Parry and Ranbaxy among others for development research projects. “If there are complaints about inadequate industry-academia engagement, I believe that academics are more to blame than industry leaders. Lack of self-motivation to do research and the absence of incentives to engage in research has made teachers in Indian academia lethargic. Moreover education institutions need to develop a research culture. If a company provides a grant for research and development, it naturally expects returns within a time frame which rarely happens. Unless academia develops a responsive research culture, industry will not become involved with it,” advises Balakrishnan.

But while it’s undoubtedly true that some of the blame for the poor interaction of Indian industry and academia should be laid at the door of the latter, following five decades of tightening government controls exerted over institutions of higher education, the inertia of tenured professors and faculty should be assumed a given. It stands to reason that the more proactive role should be that of captains of industry given that the sins of omission and commission of tenured faculty in institutions of tertiary education are visited upon industry, which is the end user of the vital human resources shaped by the country’s 311 universities and 15,600 colleges.

Yet the plain truth is that there is a virtual disconnect between Indian industry and academia with managers in industry and trade and learned academics busy doing their own thing. Though occasionally work in these two parallel tracks does converge, it is rare and drifts away into parallel tracks on completion of limited assignments. With the research and development outlay of corporates rarely exceeding 1 percent of sales, the sustained interaction between town and gown which is the prerequisite of industrial growth and development is conspicuously missing in contemporary India. Industry leaders are content to pay perfunctory obeisance to education for public relations purposes and the small percentages of top-line and profits allocated for education by way of scholarships and research grants tend to be a tax dodge rather than driven by the symbiotic linkage between qualitatively superior education and corporate productivity and well-being.

Certainly the munificent grants, bequests and legacies which built America’s great universities and institutes of learning attracting students from around the world, are rarities in contemporary India where the overwhelming majority of institutions are languishing in genteel poverty. Apart from the state-of-the-art, stand-alone Indian School of Business, Hyderabad (ISB) promoted by a consortium of private sector businessmen including the Ambani, Godrej, and Birla families with a massive investment of $55 million (Rs.250 crore) it’s difficult to recall any major tertiary education initiative promoted by the leading lights of industry. Unsurprisingly, despite being of only four years’ vintage, ISB has established itself as the country’s top B-school and is giving the seven high-profile Indian Institutes of Management a run for their money. However despite the runaway success of ISB, industry leaders have not shown any particular enthusiasm for replicating this initiative.

Box 2

Learning from Japan

While the active engagement of corporate America with its much trumpeted and sought after universities is a well known fact of life, the degree of involvement of Japan’s industry and business with institutions of higher education in the land of the rising sun is an area of relative darkness. However according to Japan’s ministry of education statistics, an astonishing 73 percent of all students in university and 92.1 percent of all students in junior colleges are enrolled in private (non-government) institutions of higher learning. In 1998 of Japan’s 604 universities, 588 junior colleges, 62 technical colleges, 3,573 specialised technical colleges, and 2,482 miscellaneous schools, private institutions accounted for 73.5 percent of the total number of universities, and 85.5 percent of the number of junior colleges.

“One of the unknown characteristics of Japan’s education system is its dual structure comprising a limited public sector controlled by national and local governments and a very large market-driven private sector. Enrollment in higher education institutions, which include universities, junior colleges, colleges of technology, and post-secondary courses of specialised training colleges, is 68 percent of the relevant age cohort (18-23). Only half of Japan’s public expenditure on higher education is from general public funds. The result is that government funding to higher education accounts for only 0.4 percent of its GDP, compared with 1 percent in the US, 1.5 percent in Canada, and 1 percent in Germany and France. In short Japan’s higher education — unlike the US and even more unlike Europe — is mainly funded by the private sector,” says Dr. M.R. Narayana professor of economics at ISEC (Institute of Social & Economic Change), Bangalore.

According to Narayana, private universities are self-financed by tuition, application and entrance fees, donations, and income from auxiliary services, though some subsidy is provided by the national government through its Promotion and Mutual Aid Corporation for private schools in Japan to maintain and improve private institutions’ educational and research conditions and to ease the financial burden of students. But government subsidies contribute only 12.1 percent of the total annual expenditure of private universities and colleges. 

Citing Japan’s ministry of education data, Narayana says that in the past 15 years, undergraduate tuition fees have risen about 2.1 times in the public sector and 2.5 times in the private sector. “The important lesson for Indian industry and academics to learn from Japan is that public and private institutions of higher education in that country have organised themselves to meet the highest international benchmarks whereas Indian colleges and universities aspire to meet regional — not even national — needs. Moreover while the learning of English and foreign languages is actively encouraged, the medium of instruction even at the tertiary level, is Japanese which reflects massive investment of resources in language development. These two factors have enabled Japan’s predominantly private universities to deliver highly productive, industry-ready personnel to Japanese industry which has transformed shattered post-war Japan into the world’s second largest economy measured by GNP (gross national product),” says Narayana.

Quite evidently this is because of government policy rather than lack of inclination. That a growing number of industry leaders are beginning to discern the vital linkage between education and corporate productivity is evidenced by the lavish investment several business entreprenuers and big business houses are making in primary-cum-secondary schools. Among the rash of globally benchmarked ‘international’ schools which have sprung across the country during the past decade are the Dhirubhai Ambani International School, Mumbai; Sarala Birla Academy, Bangalore; G.D. Goenka World School, Gurgaon. Under a tacit understanding between government and industry, while private initiatives in primary and secondary education are tolerated, tertiary education is the preserve of the Central and state governments. Of course hundreds of privately promoted medical, engineering and business management colleges have mushroomed across the country during the past three decades, but they have been promoted by professional educationists (many of them with good political connections) rather than industry leaders.

Quite clearly this social contract has to be revoked and rewritten to bridge the widening gap between Indian industry and academia for which industry — indeed the economy — is paying a heavy price. In the interests of self-preservation, slashing in-house training costs and developing the competitive edge to take on foreign corporates stocked with well-finished, on-the-ball graduates from the formidable universities and academies of the industrial OECD countries, Indian industry needs to become actively engaged with Indian academia.