Non-Coercive or Voluntary Societies

Sucheta Dalal writes in the Indian Express (Jan 9, 2006) about a major microfinance initiative by the ICICI bank to target rural customers and provide them economic services. This is the revolution we've been waiting for. Read more..

John Larkin has written a piece on the Wall Street Journal, Jan 04, 2006, titled, "Shrinking Indian talent pool leaves gap." Daniel Gross has produced this on his blog (search for "Not so flat").

This is actually music to my ears. Corporate India has finally realized that they cannot ignore the education crisis anymore. Of course, they can choose to claim helplessness. And they can choose to do something about it.

First, they have to recognize that the government cannot solve this problem. By the time the government finishes setting up committees to study it, other countries would have eaten India's lunch and moved on. So, for survival, corporate India has to act smart.

To be smart, one has to note that the raw material for the service sector is what we call, "knowledge workers." These are in short supply, as they've typically been the top 5% in most of the mushrooming colleges in India (excluding the IITs). Companies swoop down on a campus and try their best to get the top 5%, who know their own potential and don't stick around all that much anyway.

Then, our hope lies in the remaining 95% - if we can take at least 60% of the rest and move them up from a C- to a B+ level, there is hope for corporate India. In other words, what is the alchemist's stone that can convert base metal into gold?

In this case, it is investment in private education. Companies will now realize that it makes sense to get involved with educational institutions and make sure that students get the right psychological, physical and material help they need to make the most of their education. They will need to start funding deserving students and create assistantships, so as to incentivize high performance. Moreover, they can help introduce subjects that are of relevance. In the electronics industry, nanotechnology and semiconductor fabrication (VLSI) can be accelerated and infrastructure upgraded, so manufacturing plants in the future can be setup in India with Indian engineers. Right now, this talent just leaves for the USA. In the software industry, it would make sense to invest heavily into research on software engineering and establishing departments that teach it in a relevant manner. In the BPO industry, it would make sense to invest in domain knowledge. Finance courses would focus on international business practices so graduates would need less training once given a job.

Also, it should slowly dawn on companies that this is a great opportunity for them to invest in differentiating factors, such as intellectual property. If research is funded in India, the fruits of that research can be used by the company to gain competitive advantage. Unless there is a lot of aid money to be had, universities right now don't have the incentive to create a research infrastructure. Moreover, companies can enter into deals with universities giving them first access to graduates of labs or departments that have their funding.

At another level, corporate India can create a consortium to review technical education in India and reform it to create a parallel board to the AICTE - one that can voluntarily be adopted by an institution in order to gain a favored status during placement and funding seasons. This board would be designed with the state-of-the-art knowledge gained from research in education over the years and would encourage critical thinking in students over rote learning, a skill that guarantees that employees can make the jump when technologies become obsolete. Corporate India can also go one step further and look at high school education to ensure that graduates of our schools are equipped with the right thinking skills that help them do well in technical education.

In short, the pain that is being felt by corporate India is a happy one that needs to be looked at as an opportunity. Those companies that have a long-term vision will identify this opportunity and exploit it to its fullest potential and thus improve their chances of survival.

Editor-in-chief Shekhar Gupta writes in the Indian Express, Jan 7, 2006,

"My third cheering story of the week did not even make front-page headlines. I found it buried on one of the commodity pages of Business Standard this Thursday and from my reading at least it seemed as if the reporter had missed the point a bit. The story complained that government-owned sugar mills were struggling to get steady cane supplies because private companies in the state were offering prices higher than the state-mandated minimum support price of Rs 113 per quintal. Some private companies, the report said, were offering up to 15 rupees more than that. Some were even luring the farmer with freebies like tins of desi ghee and sacks of DAP fertiliser (needed in large amounts in this, the rabi wheat season).

NOW this is in a state that was notorious for starving sugarcane farmers by delaying payment for their supplies to its own sugar mills for years together. In fact it was in response to this that Rahul Gandhi had made his maiden intervention in the Lok Sabha to get the cane farmers' "arrears" released. If in that very state the farmers are now not merely being paid on time, but paid more than the minimum support price and also wooed with freebies by private companies, isn't that a story of reform? "

The entire article is an eye-opener on the changing environment in India.