Lesson from IIM-K: Set up new IIMs near industry

In the last week of July, I got an unexpected call.

It was from Krishna Kumar, director of the Indian Institute of Management in Kozhikode (IIM-K). And he wanted peace with me.

For the last three years, I have had an uneasy relationship with the directors of the three younger IIMs (Kozhikode, Indore and Lucknow) because of the annual survey of business schools that we do.

These three directors were appointed after the change in the search committee structure because of which the government had a decisive role in their appointments. Probably they didn’t want their track record to be blemished by bad rankings of their institutes. In spite of their IIM tag, their location has been an impediment in their transition from a teaching college to an integrated institute.

In 2005, they coaxed the other three IIMs not to participate in the B-school surveys. Last year and also this year, I used the Right to Information (RTI) Act for extracting information from them although IIM Ahmedabad (IIM-A) and IIM Bangalore (IIM-B) voluntarily participated.

Sensing that it’s difficult to duck the RTI bouncer, Kumar called me. He wanted me to come to his campus, see for myself the developments in his institute and not use the law for the survey.

I readily accepted his invitation.

There is no direct flight from Delhi to Kozhikode. The only Indian Airlines flight goes via Mumbai and it takes six hours. After the usual delay, the flight finally landed in Kozhikode. Also known as Calicut, it is a historic city where Vasco da Gama first landed more than 500 years ago.

The newly built airport is very impressive, much better and spacious than the one in Delhi. From the airport, it is a 45-minute drive to the IIM-K, which is located at Kunnamangalam, a small town famous for a large number of small, green hills. Situated on two hillocks, the institute is a great place for nature lovers. The lush greenery, the clear air and the view of the sea make it an ideal retreat. Had the government set up a resort there instead of an IIM, it would have been an instant success.

Problems galore

Kumar explained to me the difficulty he and his predecessor had in building the campus due to the difficult hilly terrain, landslides and so on.

The major problem, though, is getting faculty. About 70% of the faculty pool consists of visiting faculty. Now they have 27 permanent faculty members. The attrition rate is high; in last two years, 13 members have left. Besides the low salary, the lack of good schools for the children and limited work options for the spouse are major deterrents to good faculty joining the institute. Even the director’s family has opted to stay back in their home town Lucknow.

Strong industry-institute interface, which is important for the growth of faculty and the learning experience of students, is missing as there is no industry around. Their data of corporate visitors, management development programmes, industry projects and case studies developed is much worse than some of the second-rung business schools.

Unlike Stanford University, which gifted Silicon Valley to the world, in India we don’t see any B-school acting as a catalyst in developing industry around it. It has mostly been the other way around.

IIM-A was supported in the initial years by the textile and pharmaceutical industry of Gujarat, which is reflected in the cases developed by the institute. With the decline in industry in West Bengal, IIM Calcutta suffered. IIM-B, which was initially associated mostly with the public sector, later benefited from the industrialization of Bangalore.

Instead of an IIM, had the government set up a rural management, agribusiness or a social service institute such as the Xavier Institute of Social Service (XISS), it would have benefited all the stakeholders. In fact, the best activities of IIM-K, such as training Dalit students of nearby areas in soft skills, are in the social sector, which an institute such as XISS would have done much more efficiently and ­economically.

Remote help

The taxpayer’s money will be put to better use if the seven new IIMs that the Prime Minister has recently declared are set up near industry hubs. Setting up a B-school in a remote place helps nobody except the contractors of that area. It’s not like an industry which will suddenly generate jobs in the area. Even local students are not benefited, as admission is only on the basis of merit.

Finally, my interaction with faculty members and students confirmed what one former director of IIM-K told me: “Setting an IIM in a place so far away from industry is a mistake. Setting the same campus in Cochin would have been a relatively better idea.”

Now the government is all set to repeat the mistake by starting a campus in Shillong.

Premchand Palety is director of Centre for Forecasting & Research (C-fore) in New Delhi, from where he keeps a close eye on India’s business schools. Comments are welcome at businesscase@livemint.com