From Northwestern and then went back

to our capital.

Thank you thank you.

Chance to catch up.

With old colleagues as well and it's
a pleasure to be here and thank you for

coming to the stock.

So what the stock is about is higher
education in the Indian software industry

India as many of you would know has
been doing very well in the field

of software particularly
software export and for

that it needs service to human capital so
it needs the engineers who can work there.

And so one of the problems that the Indian
industry faced about a decade ago as it

was beginning to rethink establishment
in a big way was a shortage of engineers

and you know there wasn't much that it
could do at the time about it but for

various reasons that are discussed there's
been a change in the in the Indian Higher

education system particularly
the engineering education system.

And the result has been
that today India produces

a very large number of engineers about
four hundred thousand engineers a year.

Most of them even though they
come out in a variety of fields

mostly will join the ID industry.

So as of two thousand and eight.

Even in a time when the industry
is not doing as well as opposed to

being last year.

Still even this year the industry expects
to employ about four hundred thousand

people to put that in perspective that's
three for every minute of the working day.

So that's a significant number.

So the question that this addresses
from a research point of view is.

How did this happen that
the interests of the industry and

that of of the supply of
its needs goes to was met

with is one question second is
what's the quality really like and

third is is there something
that we in developed countries

can do to respond to this leverage
it perhaps embrace it and use it.

Or otherwise react to it and and
in that context it does is offer a useful

model for some countries perhaps more
a model for emerging countries than for

developed one third US The Could these
questions for the next like this.

For the first question
I'll be addressing it.

What is the cost and timetable for

developing an affordable
accessible education system.

So the put it in perspective if you look
at how education systems in developed

countries happened of course there were
different driving forces but in the US It

was very driven by state level action
by civic and political elites.

So if you for

example look at the community college
system that began around the nineteen.

Ten twenty one nine hundred twenty
timeframe as an outgrowth of a limited

supply of space in the four
year college system and first

a community college has been in the U.S.
began as adjunct to high schools they were

part of the high school to me to two more
years and then went into the foyer system.

Very much driven by the civic elites of
that small town or municipality saying

we want to prepare our kids better to get
into the foyer system and for a long time.

Many of the elite universities
including Harvard Stanford and

others said that we then do away with our
two years and just rely on the committee

called this a produced the first two years
for a variety of political reasons that

didn't happen but the point I was
trying to make is that the driving

force behind an education system
a higher education system in a country.

As the literature tells us is mostly
driven by elites of some kind.

So it's either in a democracy.

It tends to be civic and political
elites in a more authoritarian system it

tends to be bureaucratic
elites who drive it and

who define what a system so should
look like how it should be financed.

So these are important questions for
example when I used the word cost.

It has to be affordable to a country.

Now most countries will spend around
three to four percent of their G.D.P.

Most of us.

In countries on education as
a whole that has to be for

primary secondary and higher education.

Now from a political point of view if
you're an emerging country the burden is

to provide primary and
secondary education.

And then and then only tertiary So
how do you then manage that system so

that you keep a good flow into
the system that you don't

over invest in Primary a second
grade occasion so cost is important.

How long does it take you have
different approaches you could go for

private provision you could go for

very distributed public
provision across the country.

You could have centers of excellence
in a few locations which is what India

did for many years.

So what's the best way to do it in
terms of the starting point and

how can it spread so that it remains
affordable accessible to all.

And these I mentioned how to developed
countries respond to the education

achievements of India and for
that one needs to understand what the new

system has achieved in terms of innovation
research competence technical competence

by which I mean to a certain
level of competence of for

say the idea industry whereas this would
refer to hire and work which is might

involve more creative competence
entrepreneurship project management and

in this age of globalization
particularly global project management.

So how should developed countries respond
to India's achievements in this you know

what we know is Indian software
industry has done well.

Or what is perhaps less known is weighted
in terms of these aspects I'll be talking

a bit about that.

Other models of governments
that are critical for

quality this I think is a key
research question you know.

So what sent what level of
institutional decentralization should

you have should be very tightly
controlled by a Senate or

a governing body which might be influenced
by the state or by private entities and

in within that how much autonomy
should the faculty have.

What should be the level of
university industry linkages.

Is it conceivable.

For example if you look at India say
around two thousand two thousand and one.

And you ask the question and
there within the engineering system.

How many students actually go and
do their forty or design projects.

With the help of a company.

Is there some linkage to they do work only
within the confines of the university lab

or is there some linkage with a company
either a project is given by industry or

they go and
work in industry labs and so on and

you'd hope that they would be upheld the
interrelationship too because you know to

make the education more practical where
India as of two thousand two thousand and

one even in its best known institute such
as the Indian Institute of Technology

the I T Almost ninety
percent of the projects were

done within the university environment
there was no linkage with industry.

So how does that change with time for

the timeframe we've already discussed and
are there.

What is the model of changing the way when
I said political civic leader referred to

the kinds of things you typically see
in in a democracy but not always and

worse is a bureaucracy or it could be
military in some countries that drive

the process if you look at Pakistan for
example.

The military plays a significant
role in various aspects of

civic life including
the higher education system.

The best one of the best run.

Engineering is situation in Pakistan
is called Must National University of

Science and Technology which was started
by the military and continues to

be an important training ground for
their engineers but also accept civilians.

So these are the questions I will
be addressing in the counter and

use India as of my context next one.

Please.
OK so the institutional background

of India so this is important not
these are the rules of the game.

The institutions that
define what is possible.

So under the Constitution of India
education is a concurrent subject.

Concurrent means that it's
the responsibility of both.

The national government which
is headquartered in New Delhi so

I use New Delhi to mean the capital.

And.

The responsibility of the individual
States or India is a federal.

Democracy which means there's
a significant responsibility to the States

is not what's called a unitary system
where everything is controlled

from the capital.

So I can present China is
a unitary not a democracy but

a unitary system of government although
you may have defacto devolution of

power in many cases but
things like responsibility to raise taxes.

You know those things of which
are marks of the federal democracy

don't exist in China.

Whereas in the U.S. as you know it's
highly federalist even much more than

India so India is a Fed is a federal
democracy where New Delhi In the case

of Higher Education New Delhi decides on
the system to another with things like

engineering should be a four year
degree rather than a three year degree

they have to accrediting bodies at the
national level in the case of engineering

is the All India Council of technical
education which sets standards

measures them and their sponsorship
of the state is to be the provider.

So they are the ones who respond for

making sure that the population is
educated colleges I established and so on.

Now India has a university system
which is different from the university

system in the US the university in India
is primarily an affiliating body in other

words its job is to how it will
have a bunch of colleges under it.

Which are for the education which
have the employee the teachers and

the student recruit the students and
the university provides the degree so

it sets certain standards based on
what New Delhi has laid out and

it make sure that those standards
are followed by the individual colleges.

So the colleges are highly autonomous
institutions they set up by

different groups affiliated
to a university.

So for example Delhi University where I
study it is of the affiliating body and

I went to a private college within that.

And there were several hundred
colleges within the university

some private Some public.

Well the financial burden is
shared mostly on the provinces so

the states are responsible for
eighty percent of the cost.

The only exception is and this goes
back to a policy decision that was

made by the the first government
after independence where it said that

the quality is not so good to at the state
level compared to what is needed and

we don't think the states are strong
enough to provide the qualities

of the National Government New Dehli said
we'll set up some universities as centers

of excellence that presently have eighteen
national universities out of a total of

three hundred and
that includes the the better known.

I teach the Indian Institute of Technology
have all of you heard of the idea is

not all right.

OK Who has heard of it.

OK so
about go about two thirds of the audience.

So you know these were started in
the one nine hundred fifty that was

prime minister narrows of grand vision for
India to create this technical workforce.

He never I think expected that there would
not be involved in the manufacturing

sector in he was looking at them to make
the dams the civil engineers you know

construct the heavy machinery that was
needed for India's factories it all tied

into his vision of a state led process of
development where the biggest industries

were owned by the state and
the I would educate people to

feed into that process he didn't dream
that they'd be writing software.

Today on in his house pointing out almost
all the graduates of all the engineering

colleges end up in the software
industry which is not good and

bad as you might imagine.

So this policy of sort of doing this
had this effect as of one thousand nine

hundred seventy four a new
process of reform began.

We had a fairly low growth in Roman ratio
across all fields of education was seven

percent in other words if you
do the total population and

look how many people of that
population was enrolled.

In college it was seven percent
of the eligible population.

OK the differing gross a net is
you're not separating out how many

people in college actually within
the eighteen to twenty two year group.

What had happened with the Center of
Excellence strategy in the context of

an economy that was not doing well it was
there was a stagnant domestic economy

was that the centers of excellence
had gotten all the resources and

the the rest of the university
system got very little.

So while.

So there was a certain quality that
the series had accomplished and

the rest were doing really badly.

So there was this quality get
to the tiny layer of about

maybe eighteen of these plus maybe another
five or six in the private domain that

were funded by large philanthropy
cognize it it's about twenty five

colleges really that were very good or
relatively speaking.

And then there was this large quality gap
and the rest of them were really bad.

The cost.

So you know in the context of an overall
spending of about four percent of G.D.P.

gross domestic product on education.

Wasn't that high point six percent so

comparable with what other
countries would spend.

Except that it went on a very
small number of people.

So where other countries are spending
point six two point eight percent.

Sometimes even one percent but

achieving Brossel enrolment
rates of over twenty percent.

China being an example of that India
was spending a large amount for

a very from very little result.

Because it was clear that the system
therefore was inefficient quality

accessibility affordability
was an issue as well.

Now affordability was an issue because
even though the fees were highly the two

tional highly subsidized if you wanted
quality you had to go to one of these and

getting in was extremely difficult.

So pretty much you
couldn't get in you know.

I mean if you just took in
engineering at that time the I.E.T.F.

produced between them a.

About three thousand engineers
a year out of sixty thousand.

For do.
So that was the cream and

everything else was pretty much bad.

So the system was turning
out sixty thousand and

read it by hand them the research
competence was really poor

they didn't have good facilities
they had no linkages with industry.

So it was you know that's how it was so
it was fairly.

And so in around and it was driven by the
political elite you know narrowest prime

minister and his successors Mrs Gandhi
Rajiv Gandhi they all believed that

this is what you needed to do well.

They really saw through they never really
saw failure which is what's interesting.

They would you know you'd get these lovely
articles about how good the I.E.T.F.

were they could be employed overseas.

And all fifty percent of the graduating
class of the Ayat is still quite recently

used to come to the U.S.
for their for graduate work.

Now you might ask why would you know
it's not that's not the ratio you see

in the U.S. It's not that fifty percent of
the best schools undergraduates all go and

do a master's degree or a Ph D..

Mostly they come for their Ph D.'s.

The reason was there was
no opportunity in India.

So the this was a way of escaping
me now that we are seeing for

example a select Stanford that
the applications for Ph D.

program in hearing
a scumming down from India.

Because people are not really the one
never really interested in doing a Ph D.

in the first it was just an escape
route to get out of the country.

Now that they're seeing opportunities in
their employment in jobs that they're

staying back.

So what changed.

This was in one thousand nine hundred
seven regional politics took over they

grabbed bar as a result of
the failure of the system.

And so suddenly the system became driven
by the states rather than by New Delhi.

And the state said one they said is you
know we we're taking responsibility

in a bigger way so

enough of this taking away all
the resources for these few universities.

And what we were.

And to do is be going to provide it to
New Delhi being very weak in an era

of coalition government agreed.

And then the state said well we can't
really provide it directly with the other

spend our research and that by the way
they took away all that money for

primary and secondary education as
well and they pushed all their money

into primary and secondary education and
that's what the people wanted.

You know even today you have second
be an ornament rate of thirty

five percent that's gone up.

That was less than thirty percent in
one thousand nine hundred seventy.

But for higher education they said we'll
encourage the private sector to come up.

Immediately no New Delhi good day why
didn't they force through a law which said

that even if you have private
provision it should be not for profit

because they thought it would look good
if you had for profit private provision.

So what the state had to accept that.

So they came up with this compromise
that nonprofit private provision would

be encouraged.

So whole set of new rules were
drafted to make it possible for

the private sector to enter and
provide higher education.

So fast forwarding to ninety
two thousand and eight.

So the growth in Rome and

has substantially increased from seven to
twelve percent comparatively said China

has about twenty to twenty five
percent somewhere around twenty.

The the gov the states cost if you add
public and private space sector spending

on G.D.P. is still a very
affordable point eight percent.

When are you turning out four hundred
thousand engineering grads a year.

I said most are headed for
the ID industry.

The private sector is pretty much taken
over eighty five percent of provision

is private in engineering.

Overall it's sixty percent for

the system as a whole in
engineering eighty five percent.

Can you guess what.

This is one new P.D. and one.

What is the per day.

There's one new college
opening in India every day.

So that's the rate of growth at all in the
private sector for that with an average in

Rollman to over four years of fifteen
hundred students or roughly four hundred.

That people are taken in every day and
when you call it so

the dramatic change in the system you
can imagine what this means as a growth

rate of about twenty five thirty
percent in the system at this point

are you know people who look at
the software industry in India and say or

by what's going to happen to
the salaries as this industry grows.

Well this is the answer the growth of
people is even because of what I'm seeing

is actually the salary problem being all
salaries rising faster than inflation

that's change and salaries now started
coming down in India for example afresh

and you nearing graduate on average gets
about seven thousand dollars per annum.

Not a man by them to start
working in the ID industry.

You know one of the good forms
like D.C.'s Infosys or Wipro.

And that's come down actually a little
bit over the last two years or so so

so interesting things and

therefore you hope you get a sense
of how those questions I raise it.

How are developed countries respond.

Is actually producing the quality it's
certainly producing the quantity at

an amazing pace.

But what's happening to quality and

if it's worth it in terms of quality
Why is it working where it failed so

miserably and also we look at
other countries efforts China for

example is a good case study of way
they've expanded the system even more

than in the year five million students
enrolled in engineering colleges.

But the quality is a big
problem here again the similar

situation as India had here right Michel
you have this or this creamy layer at

the top which is very good and then you
have a big huge gap and then all the.

Thirty answered but
same tile in the state provide the domain.

Whereas India has shifted
entirely to the private.

I'm not saying this necessarily good model
for everyone just what looking at but

if you look at what most countries have
done in the U.S. is very much public rate

seventy thirty public to private Russia's
eighty five percent public the most

countries have adopted a strongly public
sector method of providing higher you can.

The argument here that
I'm going to consider.

Is that maybe India offers a new
model of which is appropriate for

developing countries or the public sector
inherently that what you have the state of

institutional development of
the country is inefficient but

I'll give you some
numbers later next month.

So a large study is currently underway and
I'm going to report some of the results

of that in the paper that has been made
available and it's available right.

People can get it if they want.

I've done a pilot study
of one thousand colleges.

I chose Bangalore because that's
the center of the ID industry in India.

I had connections with several recruited
for several companies like Google Yahoo or

prods on all of which gave me
their rankings of colleges.

So I was able to take the the rankings of
colleges as my dependent variable sort of

trying to explain the ranking in terms of
the internal functioning so we went in and

interviewed one thousand colleges in
Bangalore and surrounding areas that

provide like a catchment area for
Bangalore's idea industry and

we went in and never even interviewed them
looked at recruitment faculty autonomy

costs infrastructure industry linkages the
profile of students where the coming from.

And the new mattered against the rankings
we had from the recruiting companies.

So some of the interesting
things were in this approach it

that I'm doing with the Ministry of
Education in India and actually it's

a multi country study comparing
Russia China India Brazil with the U.S.

you know when I this me I was with
the with the Planning Commission with this

apex body in India part of the government
which determine standards of education and

how much money to allocate for education.

And I'm talking to a senior advisor on
higher education and I'm saying well

what do you think about the private
colleges and he's a government guy and

he says this drug called is a terrible you
know they don't pay the faculty enough.

They you know they offer very poor
quality of education the infrastructures.

A poor they just surviving because this
is huge demand from the ID sector.

And they're fully People in effect and
I said what about access you know.

Can a poor student in a small town.

Not find a college just because
the private sector is everywhere.

And he said no no.

Do you clean There's no chance.

So I said what about an agriculturist for
example a farmer you know two thirds of

India's population still live in
the rural areas would a farmer's child be

able to access an engineering college and
he said on thinkable you know.

So we were doing with designing
a questionnaire together.

Of exiting students in their forty year as
to what they saw as their job prospects.

And one of the questions we had said
What's your social economic background and

we give options such as son often of
a farm worker or a child of a farm worker

and you know income levels below
hundred thousand rupees per year.

Which is about two
thousand dollars a year.

So this advice said you can strike
out both of these categories.

You know it's not possible for the son of
a farm worker remembered ringing in my

ears not possible for the son of a farm
worker or someone earning less than one

hundred thousand rupees a year to
enter an engineering college and just

a few days later I was in Bangalore where
I was looking at some of our survey data.

And the very first questionnaire that had
been filled out by a student actually

moved me it was it was the daughter of
a farm worker who had joined a college.

Sorry got emotional.

But anyway the findings are that the Sealy

model the center of excellence
model is very successful.

What this means is that you know that
the government has created these eighteen

colleges funded them heavily
relied heavily on American

curriculum and teaching so they try and
recruit faculty have been trained in the.

States bring them to India in a paid them
reasonably well not very well actually.

At present the cap on salaries is
just fifty thousand rupees per month.

So you know your best more
senior professor hundred

thousand dollars a month.

So even the dynamite argue that professors
underprivileged in the U.S. as well.

Are far more underprivileged in India.

So the idea is currently
paid that much so.

But because of high funding and
the able to do that and

sudden momentum in the system where
they had you know faculty committed to

teaching not to research this
model was successful in generating

a certain quality of students that the
best companies like Google Adobe Yahoo.

India operations and not just in the
operational even their overseas operations

are found valuable for example Google
in Mountain View and in Silicon Valley.

Tells me that they regularly
recruit from the Iraqis for

their Mountain View operations and and so

obviously they can do that because they
find that the quality is suitable.

Now what we found is that
the private providers.

Have filled the quality gap between
the centers of excellence and

the state colleges.

So what's happened is that the public
colleges which were very bad have

continued to be very bad.

There's still this big gap between
the best public colleges the I D's which

are nationally run and
the province run public colleges but

the private providers have
very quickly within this ten

year eleven year period
since they were allowed in.

Films with quality gap between the centers
of excellence and the state colleges.

And the result is that
India now has a good

what might best be called
an undergraduate factory model.

It can churn them out at the rate of four
hundred thousand a year compared with

the U.S. turns out less than one
hundred thousand engineers a year.

So you can turn them out at four hundred
thousand a year growing at twenty

five percent a year.

And the quality is at least good enough.

For the Indian ID industry.

They say the companies like T.C.S.

I'd never heard of D.C.'s emphasis Wipro
these are the large Indian software

exporters they no longer recruit from this
from the C.E.O. institutes the ideas and

so on not within their readers can they
can get them the Google Yahoo and so on.

Take whatever's available but

they only turn out five thousand
people a year that's nothing.

You know five thousand out of four hundred
thousand is one something percent so that

doesn't fulfill the need of the software
industry which needs to go in the middle.

So they go here.

And this is a very important development
because what this means is one question

this race is what role has industry played
in improving the quality of the private

colleges because it almost you think about
it in an eight to ten year time frame.

How likely would it be that a system a new
system would emerge of adequate quality.

It would almost unthinkable.

Certainly the those who allowed
it in the the bureaucrats and

the policymakers they felt that
there was absolutely no chance of

the private providers would provide
anything of quality at best

they assumed at best the private
providers would be at the margins.

Maybe doing five ten percent.

They never ever imagined eighty
five percent of provision and

that they would actually
fill the quality gap.

So this is what one needs
to really explain next one.

Please.

Some other features access is
now wider and more affordable.

So Bangalore sits in the state of
Connecticut as the capital of the state of

Karnataka and you know every town.

So it's a it's us it's a state with
about maybe twenty downs or so.

So it's a fairly large state and Bangalore
has a population of about six million

the next largest Mangalore
has about two million and

then of course the others
are much smaller.

So you can get a sense of but
every last one of those towns has at least

a tier three private college many have two
Year two there now about three hundred.

Private college engineering colleges in
Karnataka Bangalore alone has over one

hundred K. so the result is access
is wider it's also more affordable.

So in going from a non-existent
public system where the touche and

was low to an existing private
system where the two ssion is two or

three times that of the public system
affordability is increased and

he gets his way Access surely
right because more out there.

Why would you to afford
something that cost two and

a half times more than you
did in the public system.

Yes.

So two reasons one is
bank finance mostly so

some sort of finance is is
available in many cases.

So that's like explains about half
the answer and the other reason is.

You no longer have to go move out of home.

If you can work from your house.

So earlier if you wanted to attend
a college you'd have to go to the nearest

big town probably Bangalore and
Bangalore the cost of renting the room

because they know that the college
has never had dorms and

so on because a rented room
would be more than your tuition.

So it does it.

You know the whole economics would be it
spent about fifty sixty thousand rupees

a year of jeans what
fifty rupees to a dollar.

So about twelve hundred dollars
a year just for the room.

In addition you'd pay the tuition
whereas now you get the education for

less than a thousand dollars a year.

So that's one interesting outcome
second catch up in less than a decade.

So what we're finding is the way they have
done it is pretty much taking you know

I mean MIT Open Courseware
has been a godsend for them.

OK So this is this is what they use yes
to if you have mighty should be praised.

So you denigrate so.

So this is the.

Reason and they're just it the curriculum
the textbooks everything you know they

look at videos they come here study deeply
what the American system is like mimic it.

They have the same bandwidth and
access to journals as at the U.S.

You know I found even the small colleges
that I visited tier three colleges

they also fair to Tripoli they have the
same bandwidth they all have just or so

they have the same access
electronic access as the best us.

University system.

Because it's so

cheap you know just my cost fifteen
hundred dollars a year easily affordable.

Yes yes internet absolutely crucial.

Absolutely.
GROSS even though the courses are talk

life the Internet is not
a medium of education but

the content is taken from here and

they have training tie ups with American
colleges and so on the better ones do.

They're also paying much better.

So compared to the state colleges which
kept a salary of fifty thousand rupees

a little over a thousand dollars a month.

Private colleges will start
you off two times and

if you're in eyes you progress
a system made on four times.

That's enough for times that is two
hundred thousand rupees about five

thousand four thousand dollars in.

A month in India which is a really good
salary would be considered bad style if

I condemn Ixia in many places as you
probably know but it's certainly

an outstanding salary for India that
at that salary you can live very well.

You'd be so in the top ten
percent of the country's income.

You're certainly not the case for
faculty here.

So they're able to do that because
they have this demand you know.

Even very interesting ninety percent
of the students finally a project

are not done with industry from
something that was zero even at

the best colleges is now ninety
percent even for the mediocre.

Now the reason it's happened and this
needs more investigation I'm still working

on this but what we think is my
coworkers and I call researchers and

I is that the larger eighty four months
are the ones who make this possible.

Because they're employing pretty much
the entire output of the industry.

And they can't access the cream
because too few of those.

They need to work with
are middle level colleges.

And to make sure that that works
well if it doesn't work they'll have

to train those students.

After they graduate in in-house
colleges which is what they were doing

a few years ago.

So it makes sense from an economy point of
them for them to work closely with them.

So what do they actually do.

One is big patiently rank every call
it's all the top ID firms in India.

You know top three for sure and several
others that I know of the day we look

at all the colleges in their catchment
area so for a national company like T.C.S.

did they rank or a thousand out of
India's four thousand colleges.

You know one in forces which is based in
a different state ranks another thousand

Wipro which is also in Karnataka
ranks about fifteen hundred US.

So this ranking system is very
powerful because what it means is

that every college now has a rank.

Given to it by ear of credit

a worthy bodies sometimes something
that the market will trust.

And so you know and so it's very common
now for a student to go to a college

if even though this is not published
a student will go to a college and say so

in Chennai ready C.S. is very strong and
they want your D.C.'s ranking.

And the college is not obliged
to reveal that information and

the recruiter will go with another company
a small I.T. company will go to a college

and say I'm interest in
recruiting some of your students.

What's your D.C.'s ranking.

And they may choose not to reveal was
a don't really there are many others

at the top end who will
that automatically my.

Those that don't reveal at the lower end.

So in effect you have Revelation all
of them have an incentive to reveal

their anchoring and so
it becomes publicly known.

So that's one important role that these
ID forms are they're played the role of

revealing to the market the quality
of different institutions and

when that happens then the private
colleges have an incentive

to move up because all the good students
will go to the are good colleges so

then they tend to invest more of those you
would imagine why would they invest all

this if they wanted to
just make money out of it.

Secondly the I.T. firms recognise that
the quality of the students coming in may

not be that good but
a lot of work can be done with the help so

they're actively involved themselves with
the colleges in terms of giving faculty

consultants even if they think the faculty
won't do as good a job as the I it is.

The top I.T. form to me they'd rather give
projects to these low in front because

that operates the quality of the faculty.

So they actively in World
them even multinationals get

involved in that Texas Instruments for

example has collaboration with
five hundred colleges in India.

Most of them private where they
give their kids in the teaching and

really high end design capabilities other
such a Microsoft endowed chair and so on.

So the large ID forms are doing
a lot to upgrade the quality.

So this I think has been the crucial
difference what's made it possible in ten

years for a system to go from zero to
something that's reasonably alright.

And finally the private colleges add
to system viability because they all

cover because many of them make money.

Because it's a public private partnership

in the sense that the government
provides some support.

So in the typical model.

The government pays for about seventy
five percent of the students.

And twenty five percent of
the students the private college can

charge what it likes for Touche and

that's where they make their money to
an interesting model that when we go.

Exists uneasily because twenty
five percent of students pay

a lot more than the other
seventy five percent and

those twenty five percent probably
not that meritorious to start with

because they're the ones who get in
because they can be the field but

they're crucial to the viability of
the system to give you some idea of costs.

So B.S. Institute of Technology in
Bangalore is where tier two college.

Is to Sion charge per year
is fifty thousand rupees.

Its cost of running the whole system is
forty five thousand rupees per student.

So you can see that they're
doing quite alright.

They're actually making some
money which is good and

that's based on that you know fifteen
twenty five twenty five model so

that these are averages
across all the students'.

Idea three college which is
in the public sector domain.

They we're here College in indoor which
is a small town in my depredation.

Their tuition fees are half This is
a typical public sector Touche and

fee twenty five to thirty thousand.

And their costs are much higher seventy
five thousand so they rely on on state

subsidy heavily so you can see they're
providing a poorer quality education

they've been around for donkey's years
they are far nicer in terms of campus

space in hundreds hundreds of acres less
it works out of a twenty acre campus.

Here where the quality
is significantly better.

The ideas of the.

The gods of the masters of the system
here one of their tuition fees a little

more than the Tier three significantly
below what they are able to charge.

But the cost is substantially higher.

So this is actually means that this is
don't really couldn't have been replicated

all over the country.

It was just under forty it's OK if you
do it as a center of excellence strategy

to demonstrate certain things
you can make it widespread.

Compare really the average us to one
state university is seven thousand

and twenty thousand.

China averages one
thousand in two thousand.

So you can see even compared with China
while China's efficiency rate for

a further two year one looks better than
the I E D's right this is two thousand one

hundred thousand rupees roughly
the idea spend twice that and

but what you can see
is that compared to a.

You know this of course.

It's far more expensive that the city
forty five thousand the cost.

Here is double that.

Over this is D O one and
these are still tier two by and

large compared with Russia of course
you also can see the number so

what you can see is you know you have the
beginnings of a viable system what's out

obviously but already very clear
in sort of follow up interviews is

that the best private colleges
are not reaching to your one status.

OK particularly those in the southern
states of India where there's

an active relationship between
industry and the institution.

Now in terms of how important go
back when not yet ready for this.

In terms of what does this mean in
practice you know people often say

India's advantage in software
is what that they speak English.

So one reason people say
Right China has not been able

to succeed in software is
they don't speak English.

Because of butter and Russell would point
to them we speak English for years.

Right now who was in My Fair Lady or
to judge but the choice.

In America at least.

So the theory is so

that my argument is that actually
English is not that important.

And as evidence I presented the slate.

So next one trees.

So you see the servos of a New York
bank maintained from a small

town in India small by Indian standards
two million people live in the town of

in-doors of India's poorest downs.

It's a base year so I have been trading
center because it's the capital of a state

mother predation where
the you know where most.

So I've been in this produced but even in
this small town where the electricity goes

off and at one thirty in the morning
comes back at nine thirty at night.

So you're down to party ring the day
you see your software company and I.

There are all fifty such software
companies in India that export

services to the U.S.

This particular one was maintaining
the servers of a New York bank.

Look at the infrastructure
you see the leaky walls.

You see the you know this water
if it's not like a luxury over

here we don't need to drink
bottled water in India.

If you didn't ring the bottle
what it immediately.

Fall is if you drank the tap water.

So it's a necessity of
the guy who's standing up.

You can.

He's the owner.

You can see is the owner
because he's smiling.

He had twenty two people
cramped in this room

of about eight hundred square feet or so.

OK And he was doing so

well it just took me proudly to his new
facility which was next door which is

another eight hundred square foot room
intend to cramp another twenty two people.

But what's interesting is this chap.

OK.

What's interesting about him is that
he doesn't speak good English at

all to communicate with him I had to speak
in Hindi I could not speak to an english.

OK so he's an engineer trained at that
Davy a Hillier university that I mentioned

earlier the State University in indoor he
gets a salary of three hundred dollars

a month which is a very good salary
from his point of view it's more

than his family has ever and

at its peak he commuted to work by
bus very content with being there.

I mean for him.

It's an excellent salary.

He's very good at coding.

So in trying to understand how this
combination works twenty two like him or

twenty one like him one like him.

This guy is sophisticated he's actually
worked in New York he's the one

who got the business.

He travels frequently and

he you know he's the most innocent
he's the guy who mediates in English.

It's not necessary for
him to knowingly unless he need to

talk with clients who need that sort
of language so most of them do not.

In the cases where he does talk to clients
it's mostly to resolve technical problems

not to talk about customer requirements.

That's done by this guy the standing
guy this person will talk

occasionally to clients that
engineers in New York and

purely on technical issues and
things like Goodnight.

My presumption was that coding is its own
language to get to get talked he noticed.

That's what counts.

You know.

And to model that works very well.

So for
twenty one out of the twenty to work as

a knowledge of a sophisticated
knowledge of English is not needed.

You need sort of enough
to pick up from her.

Hello.
Can we chat about this that other stuff

and then they go into court because
the other interesting question I had was

when I visited this and

several other outfits in indoor was how do
you manage electricity if the power goes

off in one thirty in the morning because
they couldn't one thirty in the night.

What do you do so.

He said this is how we
manage next likeliest So

car batteries are his primary source
of power is a During the day one

thirty in the morning to one thirty at
night they run on car batteries the grid

is a backup source of power the grid
only come become the main source of

power at night because they're
working twenty four hours.

Well if I was a client of that bank and
maybe one of those

that went bust and if I'd be too thrilled
by seeing this sort of set up you know.

But you know it works.

He was as I mentioned he
was doubling capacity.

So this is what sort of interesting
in the way that you have these

operations spread all over the country
based on an education system.

That.

In a very unexpected way
is delivering quality.

OK So let me sort of wrap up
with a few points next a place.

So the first five two pages this
is a summary of the findings and

then the research questions.

First the implications for India.

What does it tell us about the system so

what I have concluded and this of course
is the first stage of a bigger study.

So it should be taken with those
caveats in mind this is a system

that delivers quality.

Is affordable.

And has resisted viability in
other words the system doesn't

lose money within ten years.

That's remarkable.

Second what quality means
is technical competence.

These are a production of of students
who are suited for writing code but

for things like entrepreneurship
global project management skills.

There's a big get it.

That's what the companies that have
to teach them to do so even now when

the C.S.R. in forces or Wipro recruits one
of these engineers they don't let her or

him talk to clients for
another year or so when the U.S.

should be come out of a good university
from Georgia Tech you're straightaway

thrown into the workforce you're talking
to plants you know on various issues for

about nine months to a year
they will train the student but

the good thing is where earlier they were
training them on technical competence

they're not training them
on project management.

And how to understand risk.

You know how so different sorts of issues
there's a different type of skills

that is still needed.

What we have here is
an undergraduate factory research is

not on the agenda of these private
colleges it's barely on the agenda of.

Top level public colleges but

now my argument in the something that I'm
working with the Planning Commission and

the Mr education on is that
the centers of excellence should now

shift to research a country can survive
forever by playing catch up women things

are developing in India domestic markets
are developing India can be a hub for

many other countries just of South Asia
certainly but also East Africa

the Middle East where the cultural
parameters are not that different.

It's essentially actions
can shift to research

firms have played as I pointed out
a very key role of making the market.

So these are the implications for
India and

how it should develop its
system going forward.

For governance model.

It shows that what we found is
privatisation has played an important role

what we found is that they haven't talked
about it much the decentralization

the more autonomy was given to faculty
over things like choosing celebrate.

A course development the better
the quality of the college so

there's a clear ranking matching that the
higher rank colleges were those that were

more decentralized and third is the those
that had greater industry linkages So you

know we asked colleges to tell us about
the link be found again a match between

the linkages and the quality of those
are greater linkages had higher quality.

So what are the implications for developed
countries and multinational companies.

So India is currently turning out
technically competent people so that

can be leveraged because it means the U.S.
can rely on that and also move up ahead.

Danny and I were talking earlier of
how companies are doing this for

example you have.

Semiconductor networking companies making
companies like Cisco Motorola and so on.

They're shifting a lot of their work to
India design work we heard earlier they

did it in-house because they see
that those technical skills are now

available in the U.S. in the U.S. that has
to move to higher technologies are mixed.

Technologies and so on.

And you know the multinationals
are actively embracing them in

their helpings are making multinationals
are making this process even more possible

by I mention the Texas Instruments
program the Microsoft chair and so on.

OK so the research questions
that this raises and

some of these you know I'm
not looking at all of them.

I am in our project.

What is the cost.

So we know that the public what the public
cost is we still have to get a sense of

the total cost private and public.

Of hired.

Cation as a share of G.D.P..

And then do a comparison to what extent is
India's success in engineering education

due to its unusual success in I.T.

Hussam a strange situation that
if you look at engineering.

It's doing well.

We look at other disciplines history.

You know that in the arts.

There's hardly any change in
the enrollment numbers or

in the quality it's where
it was ten years back.

It's where it is now because the change
has happened because of private

sector involvement and

the private sector has chosen to focus
on the immediately marketable feel so

you might imagine like engineering
law management studies and so on.

How does one create research
competence still a question.

Maybe the C.E.O.'s shift might help but
one does know.

And finally have we discovered
a new approach it does indeed

offer a replicable paradigm to other
countries particularly emerging

countries consisting of a somewhat unusual
public private partnership not for

profit private provision regulator
intrusiveness exists in faculty and

students election but it's flexible enough
for good institutions it's much less.

And very new development cause it
basically mimicking curricula of mimicking

everything possible and spending very
little on curriculum development you're

getting a free ride on the work
done in other countries.

And you know and and of course it depends
very highly on a university industry.

I think yes OK So

that pretty much wraps up my
presentation in a very good audience.

Thank you.

I hope you'll have some questions we
should do is what you want to open

up for questions.

OK in your mind.

Yes.

That would be.

Why.

You can't

work because of coding and so on there.

What do they look for that.

I haven't found that in India too and

I see that I don't consider
sense in the I T's.

I see that arrogant approach in a sense.

Look sound arrogant in the eye and
he graduates and

they all want to be managers within two or
three years of graduating if they don't

see that clear box then they want to join
a company or it has to be a very high end

multinational like Google that
hires them but not the rest.

I mean these four hundred thousand people.

My sense was women based on whatever.

We've interviewed and also our exit survey
showed great deal of satisfaction with

their education most I mention that girl
I mean for her the child of a family

to come to college would be have
been unthinkable ten years ago.

It's a gets a paradigm shift for them.

Be not to say from a child of a farmhand

to be a graduate of a college you
know at the back and then you

have

to grill good.

Yes.

So the model is that the private provider.

Sorry yes I mean repeat the question the
question is that when the college begins

who provides the initial capital
expenditure for land for

a building plant and so on.

Dabs and so on.

Did or does it grow organically
from a small outfit and

then expands into a full
fledged institution.

So what happens in India is that
a private party has to apply for

a license to open a college.

So they go to the state government and
say that we feel we are qualified based on

academic competence and capital.

And they apply to the government for
allocation of land.

So land is given to them at
a highly subsidized rate and

the government has certain parameters and
if you want so many students and so

then you have to show that much
capital and there were a minimum size

of fifteen hundred students over a four
year period to for an engineering college

which is why that's what the starting
point is then they'll give you land that

something like twenty percent of market
price and then you have to ensure that

you will be able to provide the rest
of the capital to reach operations.

So that cost that number
that I gave you that first

forty five thousand to be that's an all
in cost into the cost of depreciation and

amortization as well as
interest costs of them.

Yes So once you get a license for
a college there are various ways.

These are formed is not for profit trusts.

So they can really they can get
borrowing which most of them do or

somebody has to contribute
philanthropically

most of them are based on a mix of the two
I would I don't know it's a good question

to find out what that ratio is but
I would guess it's probably half and half.

I need I can check.

You know because

it's a good question.

The question is that when people come from
the low costs of the cost system in India.

As many of you would not a broadly
speaking there are forecasts the two upper

class the Brahmins in the country and
you have the middle and lower class and

then behind that you have the untouchables
terms of percentage of population

the upper castes The two upper class make
up what twenty percent of the populations.

SO IT TO percent of everybody else.

So the question is do
they discriminate and

the government has a whole
lot of policies on this.

They have reservation.

Which applies even in the private
colleges or you have to take a certain

percentage of the students have to
be from the untouchable classes or

they don't as yet have a defined policy
for the middle which is over fifty percent

of the population which also considers
itself to be a backward cost.

But what's happening in practice
is because these private colleges

need students they will
take you if you can pay.

So in that.

So what happened is typically the lowest
cost groupings because they've come from

much broader primary and

secondary education backgrounds
end up not getting in on merit.

OK So they're struggling
with this issue that they

can't get in unless they pay and
they're typically poor as well.

But here's where again the outside
system comes to help so

because once you get into a good college.

Or even a tear to you're pretty
much guaranteed a job or

a dragon I pointed out these four hundred
thousand students the year two tier three

all taken up by the I.T. industry.

OK And it's plenty of demand from other
industries as well I mean you know

automobiles.

So and so forth.

So there's excess demand right now for
these and you know.

They all get placed and so for the moment.

Money is available bank money will be
available trust money will be available

to educate them.

So it's turning out to be quite
a level of people it for the first

time this private system is giving access
to those in the lower costs as well.

Nancy a question and
he follows your book in the new.

So the career path typically is

they would be at the basic level for about
five years and during those five years.

Their salary might go by about
ten percent a year or so.

So maybe doubles in five years or
so or seventy two years.

At the end of five years.

If they're found suitable and then they'd
have to do many other things that show

suitability certainly their command of
English would have to improve with time.

They'd have to show
project management skills.

They would be moved up now at this
point there's so much demand for

them that those who are good white
leave even earlier if they were good.

Generally speaking in smaller
towns people stay longer in farms.

So in a Bangalore you'll
see much faster churn.

Of companies like Motorola or Google or

Yahoo which pay above what we produce yet
in forces Bay would keep looking out for

resumes from these companies
are they viewed as fabulous training

grounds you know if you're within a year
of the system you're talking to clients.

That's a good system.

So with brown they accept that.

So what.

That's what again makes it very
interesting that the larger.

Firms are willing to play this role of
patiently ranking each universe City

training the engineer for a year.

When they know they're going to
lose fifteen twenty percent but

that's a cost that they
can afford to bear now so

the question raises to me is if we didn't
have the structure of an industry and

a few large firms dominating
the industry you take the top six.

They have seventy percent of
the industry between them.

You have three thousand companies in
the software industry in India and

seventy percent of the industry's
revenue is generated by the top.

And so that's what makes it possible for

them to afford the social cost of
the ranking them educating them they don't

mind a fifteen twenty percent leave every
year to go to another institution year.

Of.

So corruption from the level
of state regulators

into the best educational
system such as the I T S.

I showed itself in a particular way.

It didn't affect recruitment of students
or recruitment of faculty So those things.

There's a common entrance
exam called the G E.

Joint entrance examination that
all the eighty's administer and

then which is also used by many other
colleges and it's very hard to get into

and then the on that pretty much it
ensures that the ID is a very good.

I mean I had someone from.

Google tell me only two weeks ago he's the
one in charge of the global recruiting and

he says he's from when I
see young graduates and

he said to me the ideas in India period
don't add any value to the students.

It's just that they're so

good when they come into my great
taking that very top layer.

I'm not saying I agree with
that I'm saying this is of you.

And so you come in there and
that quality then goes out you

know the faculty for many years till this
recent pressure of private salaries and

recruiting people away from
the ideas as a result of which not.

In one computer science department in any
of the it is police stuffed they're all

heavily under stuff because they can
only pay fifty thousand rupees and

the government is just last
week announced a revision of

the limits to eighty thousand rupees
hopefully that will keep them.

But what's happening is that the faculty
have always been attracted to

the idea it was the only place you
could do some research and get a fairly

good quality of students so you had a very
dedicated faculty where the corruption

showed was in that number you saw the two
hundred thousand rupee expenditure.

If you go to the institution and
you compare it you find that the private

colleges offer much better infrastructure
the labs have internet access.

Everything is a superior quality and
they're charging forty five thousand to be

the cost of forty five gaieties
despite completely free land all

the infrastructure paid for many years ago
cost two hundred thousand to be so that's

where the corruption is intensive you know
in maintenance facilities infrastructure

we would have you know if you visited any
of the Ids they all look pretty crumbly

even now you know a few may be you know
Delhi has got some sort of face lift.

But they all look terrible.

So there's plenty of corruption but
thanks to privatisation matters much less.

You know.

Yes yes.

Your question is that why would

the software companies are willing to
train people and then lose them right.

Rank them.

Investors.

So this process of ranking
is done by the top ten or

so which together have ahead
of as I said about it.

The top eight have seventy
percent of the market.

The did they don't have those people to
each other much they lose them to those

who are outside the system the big
multinationals the Googles and

saw who basically want
to ready product they're

not willing to invest time in getting
that ready because they're in a rational.

From and a fake one interesting
sidelight of that is I

was asking the recruiters at D.C.'s and
withdraw for the last few months that

in the downturn are you reducing your
recruitment they said no because we have

a one year cycle we recruit Now we're
not going to face the client for

another year so they have to look at
demand one year on end of the door of them

expecting things will recover by then so
so that so

the free ride is taken by the two thousand
nine hundred ninety small software

companies on the ten who wreck
out of the treat other than that.

You know one at the back problem.

Yes to other forms of engineering as you
mean to nearing survives as a field.

So your question is what
happened to the ID industry.

No longer plays this role of being so
important to a system.

I worry about that question as to
whether they would be able to shift

to other fields.

I mean if you asked them they
would say yes because anyway if

a lot of the courses are common that for
the first two years.

They're all taking core courses anyway and
they really only begin to specialize

in the computer science related
fields from the thirty onwards.

So they would have to shift
that component to others.

I think they're hoping everyone's hoping
by then they have reached out and

devils of quality that they can
offer to any any industry but

I don't know the answer to that.

Yes

You know I haven't
thought about it enough.

There are different models around the
world you have de East Asian system where

you have independent centers of research
or I take the Korea Institute of Science

and Technology where they're also doing
teaching now and then you have you know in

Germany also you have some separation in
the US it's to a large extent integrated.

Within the university system so it's
hard to say which one makes more sense.

I don't think they're going to give up
their teaching function as a political

Riyad.

So they would try and
combine teaching with the sides but

I don't have any thoughts on that ANY

Yes yes you're right.

Yeah yeah I don't know
the answer that could cost

me.