The Hindu Business Line : Not by infotech alone!

IN information technology and IT-enabled services, India is unquestionably a world leader. After the US, it is emerging as the second major international destination for this burgeoning industry.

With a massive strength of knowledge workers — almost 300,000 engineers alone — and with top companies like Infosys, TCS and Wipro becoming IT icons, the day is not far when India becomes a close competitor to the US.

Of course, some tenacious efforts are needed in developing a few universally applicable products than merely concentrating on made-to-order software, which is imperative for India's growth drive in this fiercely competitive industry. Some companies, such as IBM, have perceived the looming threat from India, and have spoken about it openly.

Today, practically every leading IT MNC has a presence in this country. More are queuing up, with the conviction that India offers a distinct competitive advantage in IT.

The huge migration of MNCs for establishing back-office operations/call-centres is further proof of India's establishing itself as a leader in these areas. Most of the corporations are doing this despite the heavy job losses back home and the huge protests it entails. But, to many MNCs, consistent growth and impressive bottomlines are more important than these temporary aberrations.

The latest to join this migration are Bank of America, Goldman Sachs, Philips, JP Morgan and HSBC. More are bound to arrive. And the reasons are obvious. With a huge supply of professionals whose productivity levels are comparable to the best anywhere, with a knowledge-seeking and nurturing environment, and with a comparative advantage in English, India now enjoys a `knowledge-country' image.

All these put together, we have a clear winning combination. If the governments gave more attention to strengthening our infrastructure too, we would have had by now, several Silicon Valleys in India.

As the world becomes more and more technology and IT driven, countries like India would have great market opportunities, and we should cash in on it. More and better professional education with enabling laws and procedures from Governments should do some of the trick.

But with the old socialist shibboleths still refusing to go away, and some of the outmoded concepts still finding a place in the realms of professional education, many would get concerned. We are liberalising, and rightly so, in business, industry, trade, and economy in general. But in the field of professional education, we seem to be weighed down by some of the slogans of the past — governments must have a dominant say in admission tests, fees charged and various quotas! But, why?

Forty years of socialism has done incalculable damage to the country - be it products, innovation, competitiveness or work ethic. The so-called `public servants' have become `public masters'. Efficiency in many public systems or public administration had gone down considerably.

But with 1991, and the introduction of liberalisation, Indian citizens including businessmen and professionals began to breathe a little easier.

However when it comes to education, the development seems to be in the opposite direction. We seem to prefer licenses, quotas and controls in the educational field, little realizing that these are antithetical to competitiveness and quality. American higher education is recognized world over as one of the best.

Thousands of students the world over throng to American universities to pursue the coveted MBA, MD, MS or BTech degrees. But it is not all that well known that most of the leading universities in the US are privately run. These private universities, driven by certain higher order values and with the freedom to administer their own affairs, have emerged as world leaders in education. But what about our system?

Except for IITs, IIMs, IISc, AIIMS and a few other centres of higher learning that enjoy considerable autonomy, how many other educational institutions enjoy a `world-class' reputation? A number of our universities used to enjoy that kind of `world-class' image a few decades ago, but do not seem to anymore.

The urgent need is to free our educational system (my reference here is to professional education) from unnecessary restrictions and controls. What is needed is facilitation, encouragement and nurturing so that we can make some of our institutions world-beaters.

Even now, a large number of foreign universities conduct promotional fairs in the major cities, offering various kinds of JVs, some even pitching tents in some of our educational centres. There are also the various distance-learning programmes conducted from outside.

And a `new class' of universities has emerged recently. Our professional education is passing through a phase of unprecedented challenge, and faces competition from various quarters. From Adam Smith to Peter Drucker to Manmohan Singh, we have learnt that `more controls' is not the answer, but liberalisation based on reasonable faith in the efficacy and effectiveness of the market mechanism is.

Cheating and cornering of resources happen in conditions of scarcity. Capitation fee and donations thrived in a period when too many students were chasing too few medical, dental, engineering and MBA seats. Let there be easier entries to the system, resulting in better competition, better products and better choices for the students (easier entry will also mean easier exit, with some naturally perishing in the competitive environment).

Some of us have argued that with necessary autonomy, proactive support from governments and a performance-based recognition, a number of our professional educational institutions can emerge `world-class'. Placing such institutions at 10 per cent of the total, in terms of number, that will be 120 engineering colleges, 95 MBA institutions, 100 MCA institutions and about 30 medical colleges.

In the international context, these are large numbers with large production capacity. Take the case of B-Schools alone; 95 large Indian B-Schools will produce about 12,000 MBAs a year. Assume that 50 per cent of them join MNCs in the US, the UK, Canada, Australia, France, Germany, and so on. Envision this phenomenon with a five/ten-year perspective. And understand that the base of our calculation is itself changing over a period of time.

The number of such graduates ready to serve in international business will keep on increasing. It can easily reach a figure of 12,000 managers in five to seven years. And these youngsters are not going to stay where they are. They will keep climbing. They will soon be the Nooyis, Menezeses, Guptas and Chandrasekharans of US/UK/Canadian multinationals. As they grow and succeed, more and more of them will be needed.

In the past we used to provide `knowledge workers' — the doers, software engineers, hardware chaps, bio-researchers and call-centre crew. We are now talking about a new group. The young, ambitious, analytical and achievement-driven products from some of our best B-schools competing in the MNC market and winning, climbing and proving to the world that we are a force to reckon with. Knowing the potential of our young MBAs, we can be confident that they are going to be another winning team from India who would capture slowly but steadily more, and still more corporate heavy positions. As they prove themselves and succeed, the demand for Indian MBAs will increase, as it happened in the field of IT. Indians will thus open a new frontier to capture, and capture they will. But we have to do a few things here. Liberalise more and more, for instance. Control mechanisms should not be imposed just to deal with a few deviants. The market is quite a powerful force to deal with them. Government must invest in at least 50 B-schools and help them achieve `international' quality. It must also encourage research in the field of management through liberal funding, and promote JVs and consortia of institutions in management education.

One more issue, recommended for years, is that the interaction between industry and the institutes of management must be elevated to a higher level. Industries must contribute to the development of management education through research grants, case studies and consultancy-oriented specific projects for improvement in the organisation. Industry should create more chairs in management institutions to encourage (develop) good faculty.

Today, India is equal to the US in the number of B-schools, but since the intake of most Indian B-schools is rather small, the number of graduates is only about two-thirds that in the US. Soon, we will catch up with them in the number of graduates too. India will then have a formidable army of skilled and motivated managers who will prove their mettle in the battlefield of international management.

What is envisaged above can be replicated in the biotechnology area too. Think of the leadership in three frontier areas: Biotechnology, IT and Management. This is not a 25-50 year project, but must be considered a 10-15 year mission. We should lose no time in developing such a vision and working towards it. What we would emerging is a brave new India, firing on all cylinders and steadily marching towards a well-deserved leadership position in the emerging `knowledge world'.

(The author is Director, Xavier Institute of Management and Entrepreneurship, Bangalore.)

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