Special Report

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

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.

Narayana: beneficial involvement fallout

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 Hind-ustan 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.

TCS’ Thiruvananthapuram training school: collegiate style

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.

Job seekers at employment fair: professionals shortage paradox

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.

Shrikant: government impetus

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 by EducationWorld 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.

Knobel (right): continuous industry support

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 govern-ments — 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.

KMC, Manipal: poignant history

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.

Balakrishnan: academic lethargy

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.

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.

Rao: greater support call

Given that ISB is an exception to the general rule that capital-intensive institutions of postgraduate education are state promoted and also because it is heavily dependent upon private sector support and munificence, Rammohan Rao’s caution about criticising the captains of private sector industry for being insufficiently involved with academia is understandable. However Prof. M.R. Narayana of ISEC (quoted earlier) is more forthright about the heavy price in terms of poor organisational productivity and lost opportunities Indian industry will have to pay unless it builds strong and durable bridges with Indian academia.

"Despite its vital interests being involved, Indian industry is not doing enough to raise standards in the education system, particularly higher education. Universities and colleges need to switch over to needs-based budgeting systems which would make the contributions of government, industry and students transparent. The bottom line is that Indian industry is doing nowhere near enough for Indian education. This is a dangerous trend and corporate India needs to learn lessons of the mutual advantage of intensive engagement with academia as in the US and Japan," says Narayana.

It’s a telling commentary on the general obtuseness of Indian industry that despite corporates being the prime users of India’s clearly floundering institutions of learning — particularly of higher learning — education is a blindspot of corporate India. In the rapidly crystallising global economy in which inter-firm competition is likely to intensify to unprecedented degrees, this is an untenable situation. Quite clearly education is too important a subject to be left to government bureaucrats masquerading as educationists. The sooner captains of Indian industry already saddled with the world’s highest in-house training costs and abysmal organisational productivity become aware of this reality, the better for them and the Indian economy as a whole.