Saturday, January 12, 2013

EXCLUSIVE: Can private universities lift India?

A study by Thomson Reuters according to which India produced only 3.5% of the global research output in 2010 and its contribution in most disciplines - including mathematics and computer science - was lower than its overall average. 

While these numbers are worrisome by themselves, in a China-envious country where India-China comparisons adorn the bookshelves of the growing breed of globetrotting Indians, the overall performance of India's higher education sector - including the poor world rankings of its universities - should be a cause for alarm. China has pulled ahead in higher education despite India's "English advantage". 

A growing number of Chinese universities are breaking into world rankings, while the majority of Indian institutions remain trapped in mediocrity. While China's research output has grown significantly over the past decade, India's has stagnated and even declined in some disciplines. 

It is evident that India's premier public institutions - including the several Indian Institutes of Technology (IITs), the Indian Institutes of Management (IIMs) and a number of other universities and research centers directly funded by the federal government - cannot compensate for the low quantity/poor quality research output of the majority of institutions run by indifferent state governments. 

Given India's gaping research deficit, the somewhat hopeful tone of a recent report - "Indian Higher Education: The Twelfth Plan and Beyond" - by the government's Planning Commission, the Federation of Indian Chambers of Commerce and Industry and Ernst & Young caught my attention. According to the authors of this report, private institutions can play an important role by creating knowledge networks and research and innovation centers. 

The word "can" is of enormous significance here. Based on their current status, do India's private universities show any signs that they may be able to provide a much-needed lift to the country's research output? 

The majority of India's private institutions are run by two sets of entrepreneurial social groups - businesspeople and politicians - who sense a great opportunity in the higher education business. 

It is estimated that 5 million Indians enter the 15-to-24 age group each year. Many more, especially women, are interested in obtaining a college degree today than in the past. The government, too, is keen to push the gross enrollment ratio (GER) - currently 16% - closer to the world average of 27% (China is at 26%). Public institutions are in no position to meet what seems like an ever-growing demand for higher education. Private institutions, it seems, are helping to reduce the capacity gap in higher education. But there is more to the story. 

While India's laws require private universities to be non-profit entities, it is common knowledge that nearly all private institutions are eager and impatient profit-seekers, offering degrees primarily in professional streams-typically engineering and management-where they can charge high fees and often demand a lump sum by one name or another. The strong nexus between business groups and politicians (it can be difficult to tell the difference between the two) has also meant that the private sector remains both over-regulated and poorly regulated. 

For one, little has been done to encourage the entry of credible private providers that could compete with existing institutions. Rather, the existing regulatory framework appears to do better at keeping out potential competitors. Essentially, as Devesh Kapur (University of Pennsylvania) puts it, "there are so many regulatory barriers to setting up a college or university that it deters honest groups but encourages those who are willing to pay bribes." 

The problem, however, is more than just about high entry costs. According to Pramath Sinha, the founding Dean of the Indian School of Business (Hyderabad) and one of the key figures behind the upcoming Ashoka University, governments in other countries do not make it difficult to enter the education sector but "make it quite strict that whatever you provide is adequately rated." In India, on the other hand, poor regulation and monitoring of private institutions has meant that most of them are plagued by the all-too-familiar disease of mediocrity since they are seldom penalized over their quality. 

Students graduating from Lovely Professional University, Sharda University and scores of similar institutions have not helped alleviate India's "skills crisis". While the country produces more than 500,000 engineers each year, a recent study by Aspiring Minds found that only 2.68% met the skill requirements of the IT products sector. It also found that 92% of engineering graduates lacked the necessary computer programming and algorithm skills for the sector. 

Efforts have been made to improve regulatory mechanisms in order to better monitor the quality of private schools. Over the years, the Indian government has set up several committees to lay out clearer guidelines for private institutions. However, many private providers have, despite losing their status, proved adept at regaining the status of universities or have simply re-located themselves in states willing to support them. At the same time, other education providers with little credibility have used their influence and resources to enter the higher education sector. 

Under the current education regime, it is hardly surprising that few private institutions-often described as "teaching factories" by their detractors-are doing a good job of teaching, let alone research. Given the current set of incentives and disincentives, it is hard to imagine that the private sector will play an important role in creating knowledge networks or research and innovation centers. 

There is also the argument that permitting the entry of for-profit institutions will bring in credible parties and improve the quality of private education. Perhaps. However, we have to remember that other than a complex set of regulatory barriers to setting up a college or university, the issue of monitoring quality is no less problematic. When India has hardly done an exemplary job at regulating the entry of shady operators, do we really expect that it will adequately monitor quality? 

Some suggest that India should at this stage, like China, simply improve access to higher education and not worry about quality. In 2000, China's GER stood at 8% and has increased more than three-fold within a decade or so to the current rate of 26%. Online education, Indian officials believe, can play a big role in this regard. However, China has simultaneously taken effective steps to improve the quality of education. Two of its universities - Peking University and Tsinghua University - are in the top 50 of the QS World University Rankings. In QS Asian University rankings, other than a few IITs, only the University of Delhi ranks in the top 100, while more than a dozen Chinese universities make the list. 

As India's private universities and colleges grow in number and absorb a larger share of the country's students, it is evident that they are likely to continue to play only a limited role - that of teaching in select disciplines, mostly management and engineering - in the foreseeable future. The task of research and innovation, an area in which India's performance is rather poor, will continue to be largely undertaken at the country's public institutions. Even in teaching, it is very doubtful that world-class infrastructure or modern technologies that the newer private institutions boast about will go very far without suitably qualified faculty. Reports show that even the IIMs and the IITs are short of qualified faculty. 

Can this change? Will the Indian government ease the entry of higher education institutions, be they non-profit or for-profit, so that credible providers step in and instead carefully monitor the quality of private institutions? In a country which ranked 94th out of 176 countries in Transparency International's 2012 Corruption Perception Index, and where politicians across the aisle have high stakes in keeping out credible competitors, it is unrealistic to expect that much will change anytime soon. Meanwhile, the best India can hope for is that private institutions at least promote the cause of teaching. 


India fails test of 'knowledge economy'
Indians are doing well in the knowledge economy. India is not. There is a misconception in some quarters that both are making rapid gains. The fact is that Indians based outside India continue to make impressive gains in the knowledge economy but India's achievements remain quite small. For example, a recent study by Thomson Reuters found that only 3.5% of the global research output in 2010 was from India. 

The misconception that India and Indians are on the fast track on the knowledge economy freeway owes much to the influential writings of Thomas Friedman on China and India in the New York Times. He followed it up by the best-selling The World is Flat(2005), in which India was announced to the world as a country that was producing thousands of engineers and scientists at a time when fewer Americans were enrolling for degrees in the sciences and engineering. 

In positioning China and India as emerging challengers to continued American/Western dominance in the knowledge economy, Friedman glossed over the fact that only a small fraction of the thousands of engineers graduating from India's colleges and universities - public or private - are employable. Certainly, few (if any) of the engineering graduates of Lovely Professional University - which recently featured in a Chronicle of Higher Education story on the poor quality of private universities in India - are likely to be able to be employed as engineers. 

The World is Flat sold very well in India. And why not? Friedman had good things to say about India and Indians. India has historically received scarce praise from influential Western commentators, so it is easy to understand how Friedman's ideas - that technology and innovation has leveled the global playing field so that countries like India can eat big cookies - were so easily consumed and celebrated. Outsourcing was going to be the solution to India's problems. Indians were great innovators and if - as Gurcharan Das put it - India's economy could grow despite the state, everything else was possible. 

The same year that The World is Flat hit bookstores, McKinsey & Co released a report on the supply of offshore talent in services. Among its findings, only 25% of engineers in India were suitable for working with multinational companies. Not many Indians read it. 

Very few Indians are also likely to have read Richard Florida's rebuttal to Friedman (Atlantic Monthly, October 2005). Florida found little evidence of a "flat" world. As he pointed out, India in 2003 generated 341 US patents and China 297. The University of California generated more patents than either country and IBM five times more than the two combined. Florida did find Indians and Chinese to be incredibly innovative but much less so in their home countries than in the US. 

There are few signs that US dominance in the knowledge economy will wane, thanks in no small part to its open-door policy for Chinese and Indian researchers and innovators. According to a recent study in Nature magazine, 17% of the scientists in the US are Chinese and another 12% are Indians. It is quite probable that these Indians have a higher research output than India-based scientists. 

The reason why India's contribution to the knowledge economy will remain limited is that its higher-education system is in a complete mess. As early as 2006, the Indian government's National Knowledge Commission brought attention to what it generously called a "quiet crisis" in higher education. Since then, more resources have been committed to higher education and massive expansion plans are underway to educate the millions of college-ready Indians. While there are some signs that things could change for the better, for now, the higher education sector remains "backward". 

The country continues to produce thousands of graduates but recent surveys are hardly encouraging. India's actual pool of skilled, employable workers remains relatively small. 

It is evident that India's colleges and universities are not teaching students what they need to learn. At the hundreds of public institutions around the country, there is not much teaching going on anyway. As a result, most students are forced to spend a fortune on private tuition or enroll at private institutions. Both at public and private institutions, the course content is dated - often by a decade or more - and unconnected to the job requirements of today. In addition, whatever is taught is not taught well. 

Devesh Kapur (University of Pennsylvania) and Pratap Bhanu Mehta (Centre for Policy Research, New Delhi) do not mince words when they state that "the veneer of the few institutions of excellence masks the reality that the median higher education institutions in India have become incapable of producing students with skills and knowledge." 

The skills crisis among India's young population is in large part due to pervasive shortages of qualified faculty. In a recent interview, Shyam Sunder (Yale School of Management) observed that: "Our best brains are selling soaps and getting into civil service" but "we are not able to attract them to a sector that is most important to us - education - particularly higher education." As a result, even prestigious institutions - like the Indian Institutes of Technology and the Indian Institutes of Management - are facing a shortage of qualified faculty. As higher education undergoes further expansion, these shortages can only mount. 

The illusion that both India and Indians are making gains in the knowledge economy is in part due to the relatively large number of high-profile India-educated innovators and entrepreneurs whose achievements are celebrated in Indian newspapers. It becomes convenient to ignore the fact that most are US-based and at best have a second-base in India. 

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