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Business News/ Opinion / Liberate higher education to compete in the knowledge economy

Liberate higher education to compete in the knowledge economy

The one sector in which US dominance is near-absolute is higher education

America’s commanding strength in higher education powers its whole economy and endows the country with a formidable strategic edge over rivals and competitors. Photo: Bloomberg Premium
America’s commanding strength in higher education powers its whole economy and endows the country with a formidable strategic edge over rivals and competitors. Photo: Bloomberg

In which industry does the US enjoy a globally dominant, almost unassailable position? No, it is not technology, pharmaceuticals, defence or aerospace. The one sector in which US dominance is near-absolute is higher education.

Every year, some 80% of the top 20 best ranked universities globally are US universities. No country comes even close when it comes to attracting the best students, retaining the best researchers and producing output that pushes the boundaries of knowledge in practically every field of human inquiry. America’s commanding strength in higher education powers its whole economy and endows the country with a formidable strategic edge over rivals and competitors.

Indian Institute of Management Ahmedabad’s Shailendra Raj Mehta published a comprehensive 47-page paper in 2012, studying what made US institutions so markedly better than others in the world.

Mehta cites Harvard’s Henry Rosovsky, who writes that “national wealth, large population, government support especially of science have to be significant explanatory factors" along with the migration of talent from Europe to the US because of World War II, and the “American habit of private philanthropy".

Rosovsky also points to certain specific features in the governance structure, such as the fact that all senior and middle management for an institution “are appointed, not elected, and they can be dismissed", and the “unitary governance" approach, with the university president being answerable only to the board of trustees and holding full executive responsibility.

Freedom and autonomy matter deeply to knowledge creation — academic research and scientific inquiry cannot co-exist with dogmatism, top-down control and doctrinaire thinking. Finally, inter-institution competition for talent and resources spurs universities to do better. Mehta cites the following standards, achieving which universities can be said to be autonomous and competitive:

1. do not need to seek government approval of their budget,

2. select their baccalaureate students in a manner independent of the government,

3. pay faculty flexibly rather than based on a centralized seniority / rank-based scale,

4. control their hiring internally,

5. have low endogamy,

6. own their own buildings,

7. set their own curriculum,

8. have a relatively low percentage of their budget form core government funds, and

9. have a relatively high percentage of their budget from competitive research grants.

It is easy to see how India’s higher education system would rate abysmally on almost every single count. Mehta says that though many countries have tried copying the US system, they haven’t succeeded. He also writes that all the success-inducing factors identified by Rosovsky weren’t available in the mid-19th century, when many of today’s great US universities were founded.

Mehta then identifies the “key innovation" that the US brought to higher education, which propelled its universities to the top ranks globally as “alumni control of the board of trustees" — not surprisingly pioneered by Harvard University, whose board was de facto controlled by alumni starting in 1710, with de jure control cemented in 1865. Harvard had been founded by the state of Massachusetts, and the Massachusetts legislature retained the right to appoint the board of trustees till 1865 (though it usually appointed only Harvard alumni) — thus, as Mehta writes, Harvard remained a public university or a “State School" for over 200 years after its founding.

Securing de jure alumni control over the board of trustees was anything but easy — in a nail-biting win, as Mehta records, the “Act in Relation to the Board of Overseers of Harvard College" was passed on April 29 1865 by a margin of just one vote in the Massachusetts State Senate, and two in the House. The legislation expressly barred government officials from becoming trustees of the institution and insulated the trustees from faculty influence by preventing faculty from voting in trustee elections. Harvard was already America’s preeminent university in 1865, and accelerated its rise after this critical — and hard-fought — change in its governance structure. Seeing its effectiveness, other US universities promptly emulated the Harvard model, and the rest, as they say, is history.

Why is this story relevant for India today? A new government has taken charge in New Delhi, on the back of an unprecedented mandate. There is a surge in technology entrepreneurship across India — there are huge expectations India’s youth have for their country to emerge as a leader in education, research and innovation. The policies the Narendra Modi government implements will have far-reaching consequences for India’s global competitiveness in these areas.

India’s capacity for scientific research is linked inextricably to the quality of our higher education institutions. If America dominates the world in higher education, India would today win top honours for being a powerhouse exporter of outstanding human capital. Venture research firm PitchBook ranked universities based on the number of alumni who started US companies that were able to raise a first round of venture capital funding between 2010 to the end of the third quarter of 2013 — the Indian Institutes of Technology ranked number 10, the only non-US institution in the top 10, alongside Stanford University, Massachusetts Institute of Technology and three Ivy League institutions. The Pravasi Bharatiya Divas, an annual festival-conference organized by the Government of India, celebrates the export of such human capital.

Much of our human capital ends up in US institutions, sometimes never to return. A study by Brookings Institution shows that 71.5% of Indians studying in US universities in 2010 were enrolled in science, technology, engineering and mathematics (STEM) programmes. Indians constitute 65% of all international students pursuing masters degrees in STEM programmes.

But this is largely a self-inflicted problem. We have US-level economic aspirations with a North Korea-style higher education system. There is just one Indian university ranked in the top 500 in the world. Without world-class universities that are free to grow and compete with one another, tomorrow’s innovators and entrepreneurs who would strengthen India’s knowledge economy are often left with no choice but to move abroad.

The alumni of our institutions who have proven themselves running governments and global corporations are surely capable enough of helping govern their alma maters too. Urgent, decisive measures are needed to change the way universities and research institutions are regulated - thick, heavy cobwebs that are strangulating our institutions need to be cleared, such that both quantity and quality can be expanded to fulfill a wellspring of aspirations.

It would be a travesty if the new government repeats the errors of previous governments. Universities and institutions should not be treated as tools of political patronage. Knowledge creation cannot be substituted with indoctrination. It is puerile and self-defeating to replace one kind of dogma with another kind of dogma.

The choice is our’s to make - do we want to be known for exporting brilliant minds, or do we want to create opportunities for these minds here in India, so that they can drive growth, create jobs and help India compete in the global knowledge economy?

Rajeev Mantri is executive director of venture capital firm Navam Capital. Shiladitya Sengupta is a faculty member at Harvard Medical School.

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Published: 02 Sep 2014, 11:34 AM IST
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