Bridging the Talent Gap in India's 'Demographic Dividend'Published: June 17, 2010 in India Knowledge@Wharton
India's so-called "demographic dividend" of a younger population compared to developed countries is as much an opportunity as it is a challenge. The task of meeting global talent needs with an educated and trained workforce is too huge for any one nation to take on, according to participants at a conference in June in Washington, D.C., organized by the U.S.-India Business Council (USIBC). Business leaders and government officials from the United States and India at the conference attempted to size up the challenge and find ways to deal with it.
Kapil Sibal, India's minister for human resource development, reported that by 2050, the percentage of people above the age of 65 will be 39% in the U.S., 53% in Germany and 67% in Japan. India, by contrast will have only 19% above age 60, according to an International Labor Organization paper. "I've had sleepless nights; the task is daunting," Sibal said at the USIBC conference, referring to the infrastructure required to educate and train India's workforce of tomorrow. "It's not just India's problem; it is a global issue."
Sibal's goal is to get at least 30% of India's 240 million schoolchildren into higher education over the next decade, up from the 12.4% currently. "Any nation must ensure that a critical mass of people move into the university system -- not less than 30-40%. [Otherwise], it cannot build wealth," he noted. Making that task more difficult is the fact that 46% of India's schoolchildren drop out before they get to middle school. Sibal's broadest offensive on that front was to convince India's Parliament to enact the Right to Education Act last August, which makes education a fundamental right for children between ages 6 and 14. Children and communities can go to courts of law to enforce that right; the lack of financial resources is an unacceptable excuse, Sibal pointed out.
'No State Can Do It On Its Own'
The task becomes "enormous and gargantuan," as Sibal moves to the next lap of creating an infrastructure for higher education to meet his 30% enrolment target. India currently has 480 universities and 22,000 colleges. In the next 10 years, it will need 700 new universities and 35,000 new colleges, according to Sibal. "I cannot do it on my own. No state can do it on its own."
Arne Duncan, the U.S. secretary of education, said his department is already chipping in, and pointed to two examples. Last fall, the U.S. government made a US$300,000 grant to the Institute of International Education to create a two-year academic partnership program between American universities and their counterparts in India and China. And last October, U.S. officials hosted 50 university leaders from India to discuss collaborations in education. "We rely on the predominance of English as the language of global business and higher education; this reliance can put American companies at a disadvantage," he said. "I worry we may get disconnected in an interconnected world," referring to business opportunities in non-English speaking emerging economies.
With 35% of the world's illiterate people in India, "we have a job to do," said John Wood, founder of Room to Read, a San Francisco-based organization that promotes literacy and reading among children in developing countries. The 10-year-old organization has so far created more than 10,000school libraries in nine developing countries, and continues to build out at the rate of six new libraries each day. "India is the biggest place of operation for us," noted Wood. "No society worked itself out of poverty relying on foreign aid; education is the only proven long-term solution."
A former Microsoft executive, Wood said the business community has much to gain from investing in the education needs of countries like India. "As capitalists we realize that if you pick up 300 million people from illiteracy, that is a burgeoning middle class ... and every product or service represented in this room is much more relevant when you have that middle class."
Getting on Board with India's Wave
Deeper collaboration (between the United States and India) is "an imperative ... no, it is an emergency," according to Ron Somers, president of the USIBC. India has announced infrastructure build-outs worth more than US$1.5 trillion over the next five years, but "American companies are clearly absent from this wave," he said. U.S. companies have a vested interest in the jobs they will create in both India and the U.S., and cannot leave the task of cooperation solely to governments, he added. He pointed to some USIBC members that are active in forging partnerships between the two countries: Cognizant, McGraw Hill, Texaco, Boeing, FedEx, United Technologies and India's Tata Group and ITC, among others.
Goldman Sachs, which set up an office in India five years ago, also supported Wood's Room to Read program. It has since expanded its involvement in higher education with its global "10,000 Women" program with a US$100 million outlay to train women entrepreneurs in developing countries, said L. Brooks Entwistle, CEO and country head of Goldman Sachs in India. In a partnership with the Indian School of Business in Hyderabad, the program offers a certificate course for participating women entrepreneurs. "There is a real job-creation opportunity which is happening -- putting the husband, kids and others in the village to work," Entwistle said of the gains in empowering women entrepreneurs. Goldman Sachs is also working closely with microfinance companies in India to help those entrepreneurs access capital more easily.
Nicholas R. Burns, senior counselor at The Cohen Group and a professor at Harvard University wondered how India could meet its goal of building 700 universities and 35,000 colleges in the next decade. He led a panel at the conference titled "Managing Uncertainties and Mobilizing the Resources to Meet India's Infrastructure Challenge." China is setting up a new university each month to support between 20,000 and 30,000 students each, noted Blair Sheppard, dean of Duke University's Fuqua School of Business and chair of the Duke Corporate Foundation. Infrastructure investment is relatively easier in China, however, because of its "centralized governmental authority that can get things done much more easily" and its wealth (foreign reserves of US$2.4 trillion), stated David Rubenstein, co-founder and managing director of The Carlyle Group, an investment firm. "[It is] much more complicated in India."
If Duke University were to get involved in India's educational infrastructure effort, it would face three broad issues, according to Sheppard: capacity-building to produce college professors; timely intervention and mediation to help disadvantaged students gain access to education and creation of a sustainable business model for academic institutions that also provides affordable education. "I have no idea how you are going to do it, but it is going to be fun diving in," he added.
Be There, Do It
Burns noted that many Indian institutions have approached Harvard University about partnerships. "Harvard does not build campuses overseas, so what we can do is collaborate on curriculum development, faculty research, faculty-mentoring and student exchanges," he said. Sheppard didn't think that constitutes enough involvement: "If you are not there you cannot help. It is not okay to say, 'We will sit at arm's length and help you from a distance' and actually believe you are learning anything about India and doing something about the core problem."
The focus on the task of building 700 new universities clouds other important issues, according to Raj Kumar, vice-chancellor of O.P. Jindal Global University in Sonipat, 30 miles from New Delhi. The university was founded in February 2009 with a US$100 million endowment from Indian industrialist and member of Parliament Naveen Jindal. "Unbundle the numbers," said Kumar, and explained that some of India's14,000 existing colleges will graduate to becoming universities. He pointed to the bigger issue of how many of them will maintain high academic and research standards. "That gets sidelined in this larger debate of wanting to establish 700 universities," he noted, pointing out that currently, not a single Indian institution figures in the list of the world's top 200 universities.
Indian laws do not allow universities to be privately-owned, for-profit enterprises. But India could learn from the U.S. in financing educational infrastructure with endowments from wealthy individuals. "Besides the Tata group and a few exceptions, Indians don't give money for philanthropic contributions, particularly for education and health," Kumar said. Private initiatives in education in India have been largely "commercial and mediocre, and have never reached high academic standards," he added.
The 'Carnegieization' of India
Wood agreed the business community could be the principal funder of India's education infrastructure. "We need to prove to the world that business could be a source for good," he said, and recalled that Andrew Carnegie didn't have access to books when he was poor, but went on to open 3,000 libraries across North America. "Let us do a 'Carnegieization' of India, Sri Lanka and Nepal," stated Wood. "Let us not sleep until every single child has the right to grow up with books from a young age."
Walter F. Doran, president of Raytheon Asia said his company could extend to India its program called "MathMovesU" that encourages young students to get involved in engineering, science and mathematics. "As we get more involved in India, it would be a natural development for us to take those ideas and programs," he said. Sheppard said U.S. universities could help India "work through policy issues" such as faculty compensation models and work with wealthy private individuals on a philanthropy model. He saw a role also in helping Indian academic establishments work with universities across the world, and for U.S. companies to get involved: "There won't be enough money from the U.S. private sector to make [India's educational infrastructure] happen but there will be enough to seed it."
The USIBC outlined its three "thrust areas" in higher education, elementary K-12 education and vocational training/skills development. In higher education, the organization pledged that it would host a U.S.-India Higher Education Forum to serve as a platform to enlist academia, industry and NGOs, and strengthen linkages between U.S. and Indian educational institutions. For its K-12 program, the USIBC has tapped Ryan International Group, an educational institution based in Mumbai, to mobilize "financial and intellectual resources" and build a model that could be replicated across the country. The USIBC has also launched a survey of rural and urban K-12 schools across India to identify best practices in education and identify areas where industry, NGOs and the government could get involved. In its vocational training and skills development programs, the USIBC plans to partner with its members for relevant case studies.
If India's educational juggernaut does take off, the country's next generation will look back on a rich record of accomplishments, said Lawrence Summers, director of the U.S. National Economic Council in his special address at the conference. "Looking back from 2040," he visualized, among other things, an educational landscape in India with "absolutely first-rate universities at the center of absolutely first-rate prosperity," and a flourishing private sector in higher education. Later generations would say, as Summers put it: "This decade from 2010 to 2020 saw the emergence of India's John Harvards and Leland Stanfords and John D. Rockefellers who created institutions." He concluded: "It is a very real possibility."