1 Billion Customers for Education

By Sanjay Saigal

The sixteenth century universalist poet Kabir captures the high Indian regard for education:

गुरु गोबिंद दोऊ खडे, काके लागूं पाये
बलिहारी गुरु आप की, गोबिंद दियो मिलाये

To whom should I bow, my Guru or the Lord?
I bow to thee, O Guru, for you have shown me God

A host to universities since before the time of Christ, India has long revered learning, which, along with spirituality have been the pillars of the Indian notion of civilization (Sankriti). Despite the history, at the time of independence in 1947, only one in five citizens was literate. In independent India, equitable access to education was considered of first importance, hence the sector came under the purview of the government.

Until economic liberalization in 1991, India's best tertiary institutions were exclusively public funded. These included the well-known Indian Institutes of Technology (IITs) and the Indian Institutes of Management (IIMs). The first private university was recognized in 1995 - today, India has 77. Most private universities are run on unabashedly profit-oriented lines. While the better ones compete with the top public institutions, most do not. Philanthropic support of college and universities is weak, even as the ranks of the wealthy grows in strength.

Since the 1950, scientific and technological education has been the darling of Indian education policy-makers. In the Nehruvian vision, the government controlled the "commanding heights" of the economy. Naturally, business education was not high among the priorities. Yet over time, quality MBA programs gained favor with credential-hungry students aiming for private sector careers. In the last fifteen years, private business schools such as the Indian School of Business (ISB) have begun to compete with the IIMs. (For instance, see this recent ranking of MBA programs by the Financial Times).

Isn't that wonderful? Well, yes and no. 

Consider, for instance, the following data from a report published last year by an Indian employment company, MeritTrac:

  • Recognized MBA programs produce around 70,000 graduates each year.
  • Approximately 20,000 of them may be considered "employable".
  • The annual demand for MBAs is estimated to be 128,000.

To echo Woody Allen in Annie Hall, the food is terrible, and such small portions!

The deficit in 2009, the baseline year of MertTrac's study, was over 100,000 MBAs. Over the least 10 years, the Indian economy has growing at an average annual rate of 7.6%. The number of recognized MBA programs has been increasing, but the number of employable MBA graduates has not, bottlenecked by a shortage of trained faculty. Every year, the Indian industry finds itself in a deeper hole.

The data actually understate the severity of the problem:

  1. The biggest problem is that many, if not most, MBA programs are overly theoretical. Faculty typically lack actual industry experience and the sort of faculty consulting that drives US business school research is not the norm. Industry-academic collaboration on other fronts is still in its infancy. Though the 20,000-odd MBA graduates that MeritTrac considers employable are smart, motivated and well-versed in book knowledge, they don't necessarily know much of the professional world.
  2. Due to the rapid and recent economic expansion, the majority of managers already in the workforce do not have formal business training, MBA or otherwise. This seems like an addressable problem. Short term, specialized management development programs (MDPs) exist. There are few well-designed MDPs that can provide working managers with a 360-degree view of the business landscape like an MBA program can. MBA programs directed to working professionals - so-called Executive MBAs - are expensive in terms of money and time.
  3. The cultural context has been incredibly important in the professionalization of management in America. That context is largely missing in India. The situation has brightened tremendously in the last two decades, but business careers and Western business practices still carry a faint whiff of disrepute. Recent scandals such as Satyam Computers' accounting fiasco and Enron's Dhabol debacle have not helped. Even today, the Union Carbide gas leak in Bhopal, which occurred in 1984, remains in the news.

All this sounds terribly negative. But let us recall: the social premium for education remains as high as ever. By 2020, the average Indian is projected to be 29 years old. The working population is estimated to reach 882 million. (The billion in my title is rhetorical license.) The Indian Ministry of Labor recently estimated that only 6% of workers today have a professional certification. Since much of India's economic activity engages with the Western world -- India has been called "the office to the world" -- new capabilities in professional training cannot be "good enough for government work", they have to be at world standards.

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James Fallows is a national correspondent for The Atlantic and has written for the magazine since the late 1970s. He has reported extensively from outside the United States and once worked as President Carter's chief speechwriter. His latest book is China Airborne. More

James Fallows is based in Washington as a national correspondent for The Atlantic. He has worked for the magazine for nearly 30 years and in that time has also lived in Seattle, Berkeley, Austin, Tokyo, Kuala Lumpur, Shanghai, and Beijing. He was raised in Redlands, California, received his undergraduate degree in American history and literature from Harvard, and received a graduate degree in economics from Oxford as a Rhodes scholar. In addition to working for The Atlantic, he has spent two years as chief White House speechwriter for Jimmy Carter, two years as the editor of US News & World Report, and six months as a program designer at Microsoft. He is an instrument-rated private pilot. He is also now the chair in U.S. media at the U.S. Studies Centre at the University of Sydney, in Australia.

Fallows has been a finalist for the National Magazine Award five times and has won once; he has also won the American Book Award for nonfiction and a N.Y. Emmy award for the documentary series Doing Business in China. He was the founding chairman of the New America Foundation. His recent books Blind Into Baghdad (2006) and Postcards From Tomorrow Square (2009) are based on his writings for The Atlantic. His latest book is China Airborne. He is married to Deborah Fallows, author of the recent book Dreaming in Chinese. They have two married sons.

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