Dr Amit Mitra
Secretary General, Federation of Indian CHambers of Commers & Industry (FICCI), India
Dr Shourie did his PhD in economics from the University of Syracuse; most interestingly he has written 21 real books. If you have not read some of them you have missed something. One was on secularism, very critical, and the one that I like best is the one on governance. It is the only book to my knowledge of case studies of governance in India. He is very critical of the way that we govern ourselves, and does that through case studies. The most important thing is this conference could not have taken place in this hotel but for him. This was a public sector hotel, obviously understandably run down, and he disinvested this as the Minister for Disinvestment. I think that is a tremendous thing that he did. I may also inform you that as Telecommunications Minister he put the private sector opening spin in our telecom revolution. Today we are selling 7.5 million cell phones a month. Whichever company is gaining from this owes something to this guy.
Finally, but most importantly, the only minister I know who was absolved and formally stated to be totally off any investigation because of his integrity by the CBI of India. I do not think any minister has ever been absolved of any charges by the CBI coming on and saying ‘this guy is not it’. So with these words, I request Dr Arun Shourie, MP, to make his very important statement this morning.
Dr Arun Shourie, MP
Former Minister for Communication & Information Technology, India
Friends, in India we get carried away with adjectives, especially if they are used by foreigners or such an important institution. I am happy that after the topic ‘India as a Knowledge Superpower’, you put a question mark; otherwise we might have thought that we had already become a knowledge superpower.
We certainly have the potential to contribute to knowledge. That is a definitive thing. There are several indications of that, and I will come to them, but it is a potential. Many things, including some of the things that were being said earlier have to be done before we can actually realise this potential and translated it into actual contribution, and actual power.
The potential is generally seen by looking at the absolute numbers of people who are in science and technology – we have a very large number of them. Second, the potential is proven by what Indians have already accomplished in IT – please remember that the average age in the IT industry in India is just 26, and they are giving others a run for their jobs – and in the Indian pharmaceutical industry. Over 250 of the major knowledge producers in the world have now thought it fit to locate some of their largest research and development (R&D) centres in India, from Intel, Microsoft, to General Electric, to Symantec, whose anti-virus products everyone uses. All of that is being done. In several of those cases the Indian offices are now larger than their own parent offices, even in the US – for instance, in the case of Accenture. There are new avenues, things that we do not have much knowledge about – for instance in product design. I have been in Germany, and I ask ‘where has this handle been designed?’ and they said ‘in Pune’. So there are these activities.
That this is having results is also evident in many ways, because of this unique combination of improving infrastructure, low costs and high talent. I will give you two or three examples and then say how this does not mean that the potential is now within our hands. An example would be that if you look at the R&D budget of Pfizer, it is about $5 billion. For General Motors it is about $7 billion. The R&D budget of the entire Indian space problem is less than $500 million, but we are able to achieve quite a lot. In the pharmaceutical industry, if you see the success, those of you who know Africa well, an example would be the anti-HIV aids cocktail, three drugs, that are being sold in South Africa for $12k per patient per year. Cipla produce the entire cocktail, and it is now being sold there for $350. This is one of the breaking points in the Doha negotiations. Similarly for psoriasis, the treatment by injection is about $20k per year per patients. In our case, we have developed a drug for only $5 million, which will cost $50 for the year.
I could give a large number of these examples. In literature you read that to design a new auto model in the US costs almost $1 billion, but the entire Tata expenditure on the first car was just $100 to $150 million. So the potential that we have in this regard is really quite amazing. It is for us to grab, but I believe that the current hype about the superpower is premature, and India is just getting to realise the muscles it has. I will give you an example, if you look at the citation indices for principle journals, India is very low down on the list. In a presentation that that Dr Mashelkar made to the Prime Minister and the Scientific Council, he pointed out that even in his own field of chemical engineering, in chemical abstracts every sixth paper was from China. Almost 13 to 14% of the papers in the abstract were from China, and India’s share was about 2%. In the same way we are very low down, not just on patents granted, but on patents filed. These are all indices of the things that should alert us not to get carried away.
There is an immense shortage of skilled manpower, which Sanjaya alluded to. The turnover in the best IT companies is 25 to 30% per year. Many of our salaries are of Singapore levels, and therefore it will impact our competitiveness tomorrow. Many persons are really in sub-optimal jobs. If you heard the chairman of Larsen & Toubro here, Mr Naik, he is always saying, ‘you people in the IT industry are stealing my engineers’. People do the engineering course and IITs for four years or five years, and in the end just take up a sub-optimal job in the IT industry. So there is a great shortage in this way. In IT, which is regarded as the emblem of our being a superpower, you would be astonished at the number of PhDs we produce in IT. We are quite good in many aspects, for instance, in encryption, but the number of PhDs we produce is only about 40 to 50 a year. A small regional university in the US would be producing more than that.
The even more disturbing thing from my point of view, and which will impact on us three to five years from now, is the alarming fall in standards, for instance, in engineering education. A final indication of the difficulties is that it is not enough to have this capacity, but translating it into power. Sanjaya used the word ‘translating economic strength into political power’, but into what all of you know as comprehensive national power, and there has to be a focused application of this knowledge. You see this in the case of defence. We have every indication, the lack of success, in many ways the pathetic results in our Defence Research and Development Organisation, on which the Parliamentary Committee of which I am a member has just reported. The Chinese have been doing so much work in developing what the president had once called – their president said we were developing – an army of hackers so as to strike at the acupuncture points of other societies, which are the integrated networks in infrastructure. In India when I was looking after IT I did a survey of the extent to which we had built firewalls around other integrated infrastructures and it was not there. I have tried to keep in touch with this over the last five years, and the firewalls are rudimentary.
Another instance, which will be well-known to people in this room, would be the lack of expertise we have about our neighbours. Not in high end knowledge, but if you want an Indian expert on Afghanistan, Nepal, Pakistan, Myanmar, Bangladesh or Sri Lanka you will come to a handful of the same four or five names. These are indications not that we cannot do it, but that we have not applied ourselves to really acquiring knowledge and to the purpose of deploying that knowledge for our own national interests. For this, several steps are needed, and I am going to run through two or three of them.
First, in all this talk about education, and Sanjaya gave us some telling figures on the plans on education, I feel that in this populist talk of primary and secondary education it is not outlays that have been deficient, but innovative methods, and the standards in higher education are plummeting in India. For that reason it is not enough to have greater governmental outlays, but to open up the sector. It is the one sector that needs urgent liberalisation in every way, so that we give tax incentives and other assistance to the private sector and to foreign participation in India in this regard. Second, Sanjaya mentioned the teacher shortage. It is not going to go away automatically, and we must use things like information technology and new communication methods, so that you have the best man giving the lecture, which can be broadcast all over the state, and the local teacher only does the tutorial. Also, we ask the IITs and IAMs, which are institutions that have preserved excellence that one of their tasks should be to overcome the teacher shortage, by taking teachers from their own region and educating them and upgrading them in every way.
Third, on the regulatory system. In higher education it is the opposite of unorganised and organised sectors. The regulations are very high, and so are the entry barriers, but after that it is just bureaucratic regulation, and no attention is paid to standards. The whole regulatory system needs to be redone, to break up the universities. The National Knowledge Commission has also said that many of our 350 universities are too large, and we should break them up into 1,500 universities so that they are more manageable, and therefore more nimble. The most important thing is the maintenance of standards. There has been an assault, that began in the political field, and has now come into the media, on entry standards. Standards and excellence are being dismissed as elitist. Intimidation is argument and assault is proof, and mediocrity has become the norm. For that we require a lobby of industry, of education, of defence experts, to say that without maintaining high standards this tripling of the education outlays will only mean, if I may give an example, the tripling of outlays on national employment guarantee schemes. We will just be scoring high on corruption indices.
There are many opportunities, for instance, the opportunity will come from the fact that defence production will have to be opened up to the private sector, and this will spur research. Second, for the first time corporate India is realising the importance of research, because while dual use technology is being given nobody is going to give a rising industrial power non-dual use technologies, because the moment you get them you are competing with the person who is giving you the technology. That will come, and there are unlimited opportunities – the question was raised at the end of the last session – on environment. It is one of the great areas in which India can do pioneering knowledge contribution, even in architecture I have endowed two centres at the IIT in Kankul from the funds we get as MPs, and in designing those buildings we have cut down power consumption by 40 to 45%. These are very large buildings of 50 or 60k square feet. Here is an area in which we can contribute a great deal. So, talent is there, initial successes have been there, great opportunities are there, and probably some factors that are now going to compel India to tap those opportunities. For this, industry, government, everybody has to cooperate. Thank you.
Dr Amit Mitra
Thank you very much Dr Shourie. I think you have made some very important points to go into the questions. You talk of pharmaceuticals, and Cipla’s great work, but Indian companies have now discovered three new molecules, so molecular discovery has begun in India. Second, you spoke of auto design: India has the world’s largest forging company, which is something we are very proud of.
Dr Shourie
They are also now one of the biggest producers of wind power.
Dr Amit Mitra
Exactly, they are one of the biggest producers of wind power, and the world’s second largest producer of memory disks is in India.
Dr Shourie
They have now become the pioneers in solar energy.
Dr Amit Mitra
Absolutely, that is a very important point. They have gone from memory disks to specialisation of solar power panels, which require very high technology.
Dr Shourie
That is because of their great expertise in thin spreading of silicon.
Dr Amit Mitra
Absolutely. I think you brought out the connectivity between that. You have also raised questions that need discussion. We are not producing enough engineers. Your most important point was open up the sector of higher education. We are going to fall short of teachers and skills. Maintenance standards elitist – it is a very interesting political economy question. You do very high maintenance, your are at a very high level, that is elitist. We need to debate that. You said something very important for India’s corporate sector, that the corporate sector is finally feeling the pinch of not having enough R&D. They are at the point where they need R&D. So I think you made some very important points, which I am sure will get debated. You have given the positive, the shortcomings, in an extremely balanced statement this morning. You also referred to Sanjaya’s various issues from the earlier session, which overlap with your thoughts.
