Yale University, counted among the Ivy League universities of the US, is keen to strengthen its links with India’s reforming higher education system. The university recently signed agreements with the Indian Institute of Management (IIM), Kozhikode, and the Indian Institute of Technology (IIT), Kanpur, to set up centres of excellence in academic leadership. In an interview, university president Richard C. Levin, an economist with specialization in Asia, said during his visit to India that while better ties with top US varsities will help, India should focus on attracting private sector investment in education. Edited excerpts:

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Indian higher education is on a reform path. While the government may soon allow foreign varsities to set up campuses here, a number of Indian institutes are also going abroad. How do you view this?

I think Indian higher education needs to be reformed in different ways. There are two basic issues—the higher education sector needs to grow to accommodate a larger fraction of India’s population. The government’s objective to increase enrolment to 30% needs tremendous expansion. And that is one of the motivations for opening things up for the private sector.

Learning curve: Levin says India needs to create its own great universities and not just rely on foreign ones. Pradeep Gaur/Mint

The second need is to have more quality institutions of world-class level than what India has right now. That’s where two of the initiatives—foreign universities and the innovation universities—come into play. Yale’s focus is more on the second.

Leading Indian institutes are good at teaching but they are not research-oriented. What should be the focus now?

The IITs and IIMs are basically good teaching institutions... The biggest contribution made by research universities is that they have advanced knowledge as well as educate quality students. The requisite for making that happen is, one, opening up the structure of faculty compensation so that you can actually attract world-class individuals.

The strong Indian nationals go to graduate schools in the US and they will not come back if they don’t get compensation close to what they get aboard. And right now, they would not unless there is some change in legislation.

The second is the state support—the need for quality laboratory, infrastructure and competitive research grant to advance their work. While there have been some advances in research grants in India, there is still by and large not the quality of the facility that you can have access to in the US, parts of Europe or indeed recently in China.

You have said Yale wants to grow ties with India to the level of its engagement with China. Can you elaborate?

We have more collaboration with China. It all starts with having a faculty that engage (in the study of the country). The first requisite for setting up programmes in India would be to hire more faculty with interest in India. We started about 10 years ago, when I began Yale’s major internationalization effort. We inherited a very strong faculty on the study of China. We did not have in place a large number of specialists on India. We have begun to do that. In recent years, we have hired people in political science, history, anthropology, economics, religion and literature who are focused on India studies.

In India, we have around 30 collaborative arrangements and in case of China we have 80 or 100. That’s because we have more people (in Chinese studies). That (India engagement) is happening tremendously now, with some of the philanthropic support from some Indians like (chairman of the unique identification programme) Nandan Nilekani initially and his wife Rohini. They were the first of our new India chairs. We have three now. Conversations are on with five more people to build professorship. And there is some support from the Indian-American community as well.

The other thing is to create partnership. We have announced the leadership programme in partnership with IIM-Kozhikode and IIT-Kanpur to create leaders in universities. This is one of the many expected things we will be doing in India. We had a meeting with the Jindal Global University too.

You had an interaction with Ratan Tata (chairman of Tata group). Is he sponsoring a chair?

There is nothing particular to announce now. We are talking to lots of leading Indian families who are interested in Yale getting more involved in India. I hope there will be some support for our relationship. There is a lot of philanthropic interest in higher education of India. I hope Parliament will open the market up to those philanthropists to build universities. They can give some money to Yale, but that will not have the impact.

India is very brand conscious and it seems it wants foreign universities to set up shop here. That will help, but that is not the answer. The answer is great Indian universities and Indian brands. You have done it with companies—you got Tata, Reliance (Reliance Industries Ltd and Reliance-Anil Dhirubhai Ambani Group), Infosys (Technologies Ltd), you got Wipro (Ltd). These are great global brands now. You can do the same with Indian universities rather than co-branding like Yale-India Campus or Harvard-India Campus.

The impression here is Yale is interested in partnering one or more of the proposed innovation universities. Is that true?

We can have partnership in more than one area (but) not as co-brands. There will be some exchanges.

We may have some advisory role, having some of our faculty helping establish these universities. No joint investment. I think the real hope (for innovation university) is private sector support.

How do you see the growth of education in India vis-à-vis China?

China and India are developing rapidly now economically, partly because business is building up and still there is a very large pool of low wage labour available. Those advantages will go away in 20 years. Then you need to compete on the knowledge front.

Companies have to innovate to create new products. To win on the international stage, you will need not low-cost labour but better ideas and better products. That has been America’s competitive advantage.

To compete successfully 20 years from now, India and China will need much stronger research universities. China is very aware of this and politically committed to it.

China is making big investments in research laboratories. They are putting lots of money in top universities to make them competitive with Harvard, Yale and Stanford. They are focusing more on a small number of top universities. Politically, that is very hard for India to do because of India’s democracy. It is very hard for America to do so. Solution is to allow the private sector to have a big role in higher education.

I believe you will succeed because India has built great companies in (the) last 20 years. I think a lot of people responsible for that want to give back to the Indian society. They are eager to do what Leland Stanford (founder of Stanford University) and John D. Rockefeller (founder of Chicago University and Rockefeller University) did in America over 100 years ago. If I am not mistaken, all Parliament needs to do is not to give the money away but pass legislation so that will happen.

The term Ivy League seems to have caught on. After China branded some of its university as C-9 or the Chinese Ivy League, India is set to designate at least nine top universities the Indian Ivy League. Does this help?

It reflected something really in China. Those are the universities that China is making disproportionate investment (in). In fact the government made those investments before naming them as Ivy League of China. I don’t know much about the Indian Ivy League. Unless there are much resources, I don’t think it will have that much of impact.

India and the US have have lately differed on economic policy, particularly over the outsourcing of work to India. As an economist specialising in Asian economies, how do you see President Barack Obama’s move to curb outsourcing?

I am very much a free trade economist. I am not keen on curbing outsourcing. Outsourcing benefits you as consumer by lowering the cost of products that are sold by the American companies. I think you (US citizens) gain out of those kind of trade. But you have to recognize that politically there is a perception that outsourcing causes job loss in America. The perception is exacerbated by conversations. These go for political dynamics that calls for curbing outsourcing. When the American economy was booming before 2008, there was a lot of outsourcing going on. There were pockets of resistance (then). It is all pervasive (now) because the overall employment is low. So there will be some static. There may be some curbs. But I expect with prosperity and high employment, this will give way.

So this is more a political decision than practical solution to US unemployment?

I think so!