Can India Harness Its Knowledge Capital Despite Its Scale and Complexity?Published: February 21, 2013 in India Knowledge@Wharton
Recent estimates by India's Central Statistical Office have pegged the country's GDP growth for the current fiscal 2012-2013 at 5%, the lowest since 2002-2003. Finance ministry officials and some economists are hopeful that it will be around 5.5%. But what no one disputes is that the heady days of high growth of 8%-9% are nowhere in the horizon.
So what will it take to ensure that India regains its growth momentum? How does one build a twenty-first century knowledge economy? Addressing these issues, a recent conference in New Delhi titled, “One Globe 2013: Uniting Knowledge Communities,” focused on various aspects like education, skills development, technology, innovation, infrastructure and health and how these impact economic development. Speakers noted that three key global trends shaping economies are connectivity, information and globalization. How well countries harness the opportunities arising from these will define their success. The ability of a nation to use its knowledge capital will also be a key factor in its economic development.
Given India's demography, harnessing its knowledge capital assumes even greater significance not just for the country but also for the world. At present, more than half of India's population of 1.2 billion is less than 25 years of age. It is estimated that while the global economy will experience a skilled manpower shortage of 56 million by 2020, India will be one of the few countries in the world with a working-age population that exceeds its number of retirees. The TeamLease India Labor Report 2009 estimates that the country's population will increase from one billion in 2001 to 1.4 billion by 2026, and 83% of this increase will be in the 15-59 age group. This means that in the next 12 to 13 years around 25% of the new workers entering the global workforce will be Indians.
Scale Is a Big Constraint
Giving the inaugural keynote address at the conference, M.M. Pallam Raju, India's union minister for human resource development (HRD), said: "Our vision [for India] is to become a knowledge power in the coming decade. But if we have to earn the demographic dividend, we must provide our youth with education and skills for them to develop as a resource not just for India, but for the world."
Quoting various studies, Shashi Tharoor, minister of state for HRD, highlighted the need to educate the girl child. He listed interventions that the government is focusing on to ensure this, but also acknowledged that with one-third of women in India being illiterate, "clearly, despite our stated priority, we have a long way to go." The gross enrollment ratio which is highly skewed against girls, Tharoor said, was "no less a national shame than an appalling sex-ratio." According to him, the biggest challenge in addressing this issue is scale, both in terms of reaching the target group and creating infrastructure.
In his keynote address, Montek Singh Ahluwalia, deputy chairman of the planning commission, explained that the Indian government's education policy is driven by three aspects: expansion, equity and excellence. Of these, the most difficult he said, is to build excellence. "We know what to do for expansion and equity. What we are not sure about is excellence and it is here that creative thinking is needed the most."
Pointing to China, Ahluwalia observed that it has been proactive in attracting Chinese professors settled outside the country by offering them various facilities and incentives, including for their spouses. "In India, on the other hand, we have to advertise. Otherwise the appointment can be challenged in court," he noted. A possible solution, he suggested, could be by way of creating a separate recruitment process for a pool of professors at the country level, who could then teach in different universities. "All of this requires out-of-the-box thinking," he said, adding that one of the biggest impediments to education reforms in India is the education faculty itself.
Ahluwalia went on to say that Indian universities need to build global partnerships. At present, an Indian university is free to enter into a partnership with a foreign university for setting up joint research centers and for student and faculty exchange programs. "What you can't do," he said, "is give a foreign university degree from here." The Foreign Educational Institutions Bill, which would allow for the granting of such degrees, was approved by the Union Government in March 2010, but is yet to become law.
Building World-class Universities
Karan Singh, member of Parliament (Upper House) and president of the Indian Council for Cultural Relations (ICCR), pointed to India's heritage and noted that "India was at one time one of the greatest knowledge centers of the world." Citing the example of Nalanda University, which was established in the 5th century in Bihar in North India and was a renowned seat of higher education for 800 years before it was destroyed by invaders, he said: "For many centuries, we were the hub and students from all over Asia, South-East Asia and South Asia used to come to India to learn. It is only because of successive invasions and colonialism that we lost that status. We must work towards re-establishing India as a major hub for global education."
In a session on creating world class universities, academics from different countries shared their perspectives. Jerry M. Hultin, president of the Polytechnic Institute of New York University, suggested that the universities of the future -- across the world -- need to be global and provide both knowledge and technical skills. "Along with PhD programs, universities also need to focus on the real pieces of life. We need to provide skills that enable students to use the knowledge they learn to solve real problems." The cost of education, Hultin added, also needs to be reduced considerably.
Robin J. Lewis, professor and director of Russian Presidential Academy of National Economy and Public Administration at Moscow and also professor and director, School of Social Development and Public Policy at the Beijing Normal University, said that a world class university requires "global faculty, global competencies, concentrated investments and strong leadership." Talking of the Chinese experience in higher education, he pointed out that the biggest challenge there has been lack of training in critical thinking, innovation and creativity. To overcome this, in the past two to three decades, China has been reaching out to foreign partners. "India," Lewis said, "needs to emulate this."
Shailendra Mehta, visiting professor of business policy at the Indian Institute of Management Ahmedabad, however added a note of caution. Pointing out that the U.S. is dominating the higher education space, Mehta observed: "The problem with this is that we seem to think that American solutions are the solutions for all problems. But taking only the American view can result in global financial crisis. Our understanding of Japan's economy, for instance, is colored by our view of American economy."
Moderating a session on twenty-first century knowledge networks, Arun Sundararajan, associate professor at the New York University's Stern School of Business, said that global knowledge networks can play a critical role in solving global issues, because they bring in a global perspective. "Knowledge networks are also central to sustaining research," he added. According to Torsten Fischer, director at the India office of the German Research Foundation, the biggest challenge in creating knowledge networks is "effective administration." He noted: "We have the money, we have the information. The difficulty is in implementation." Charles Hannon, professor of computing and information studies and associate dean of the faculty, Washington and Jefferson College, stressed the need to strengthen social networks. He said: "U.S. students need to see India as a place where they can come and study and not something very exotic."
Skill Development: The Critical Piece
Skill development was another area of focus at the conference. Pointing out that only 17% of India's workforce is formally skilled compared with 96% in South Korea, 80% in Japan, 75% in Germany and 68% in the U.K., Dalbir Singh, chairman – organizing committee, One Globe 2013, noted that skill development and employability still remain key challenges for India's workforce.
In 2008, the government of India formulated a National Skills Policy which set an ambitious target of training 500 million people by 2022. Of this, the National Skill Development Corporation (NSDC), a public-private partnership set up in 2008-2009, has the mandate to train 150 million. The balance of 350 million are to be trained by different ministries and departments.
NSDC started funding in February 2010 and, as of December last year, NSDC-approved partners have trained only 320,996 people nationwide. Of these, only 241,354 have been placed in jobs. There are no official figures available on how many people in all of the 500 million target have been trained so far. "The government clearly doesn't have the plumbing to monitor the progress. But we certainly are nowhere near one-third of the target," says Manish Sabharwal, founder and chairman of TeamLease Services and a member of the Prime Minister's National Council on Skill Development.
Sharing his experience in skill development, Khozem Merchant, president of Pearson India, said that it has been a difficult journey. He attributed it to "sheer scale, enormity of demand and scarcity of time." There are other problems, too. For instance, skill training in India is looked down at and no one wants to pay for it. Also, the majority of the target customers are in the tier 3 cities. "We are touching a part of India we barely know about," said Merchant, adding that service providers in this space need to take a long-term view.
Speakers also pointed out that in the quest for reaching numbers, there is the danger that certificates may be issued without the requisite skills being imparted. Chris Sims, head of Manipal City and Guilds Joint Policy Advisory Group, suggested that India needs to change its approach to its target of training 500 million people by 2022. Pointing out that the need and urgency to hit the numbers is impacting the quality of skills training, Sims said: "The 500 million number has played a useful role, but it has outlived its usefulness. We need to take a more nuanced approach. We need to know who these 500 million people are, what do they want to do. And the terms of policy debate need to include quality also. "
To a question on how realistic the 500 million target is, Shoba Purushothamam, co-founder of Training Ventures, responded with an emphatic "No." She felt that "given all the challenges, the target is monumental." Raj Dravid, chief operating officer, skills group at IL&FS Cluster Development Initiative, added: "It may turn into disaster if corrective and proactive steps are not taken."
Sherena Mistri-Yiannouka, founder and country manager of Dynargie Singapore, gave the example of how Singapore has successfully addressed the issue of skill development. She pointed out that Singapore has changed the negative perception by making vocational education a part of mainstream schooling. "It has also rebranded vocational training institutions, made serious investments in them and got quality faculty," she said. Highlighting the difficulty of taking similar measures in India Mistri-Yiannouka added: "All of this requires policy changes. Doing it in Singapore is like maneuvering a kayak. In India, it is like maneuvering a battleship."
Impact of Technology and Health
Nickhil Jakatdar, co-founder and CEO of Vuclip, a mobile video and media firm,spoke about imparting education through mobile phones. According to a global survey conducted by the company, more than half the people surveyed said that they were “very interested” in education through mobile phones. In India, this number was 67%. "Education via the mobile cuts across all kinds of markets -- the developed as well as the developing," noted Jakatdar.
Launching a mobile education portal at the One Globe conference, Jakatdar said that in order to democratize access to education it is essential that prices of tablets and smart phones be reduced and service providers introduce new business models that bring down the cost of receiving an education. "We also need to create content that is easy to consume, say 10-minutes clips that have an element of fun so that the user experience is engaging. Gamification of education is very powerful and should not be underestimated," he added. The Vuclip education portal is targeted towards the K-12 and higher education segments.
On the topic of education and health care, Lise Grande, UN resident coordinator and UNDP resident representative - India, noted that while various studies have proved conclusively that good health results in good education and it seems logical to have combined programs for health and education, "barring a few, like the school feeding or de-worming programs, these are very difficult to implement and may not be worth the effort." According to Grande, this is true not just for India, but for countries across the world. "Never underestimate how difficult it is to work across different ministries. The coordination mechanisms are just not in place," she said.
Addressing a session on how India can build sustainable knowledge cities, R.K. Pachauri, Nobel Laureate and director general of The Energy and Resources Institute (TERI), said: "We need to look at India as a whole and take a comprehensive view. We need to start with our villages. We need to make them livable and sustainable and create employment opportunities there to avoid migration to cities. Otherwise, the social cost -- alienation and crime -- will be far higher than the economic cost."
Earlier, on a philosophical note and taking the discussion to a broader plane, Karan Singh observed: "We must see the world as more than a 'market'. We must see it as a 'family'. While the market is an exploitative structure, the family is a supportive structure… [In India] we have the ideal definition of One Globe – [in Sanskrit] Vasudhaiva Kutumbakam: The World is a Family."