The Oxford Symposium 2014: ‘BRICs and the

Quality gap – how to overcome it’

Rehan A. KhanManaging Director, Abbott India Limited29th August 2014

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Executive Summary

­BRIC­economies­are­important­globally:

▪BRICs will contribute 37% of global growth in 2011-16, increasing their share of global economic output from 19% to 23%

▪Developed nations critically depend on manpower from BRICs in sectors such as IT

However,­there­exists­a­gap­in­quality­of­higher­education­in­BRICs:­

▪Only 2 BRIC universities in Top 100 of the 2011-12 Times Higher Education Rankings

▪Gross Enrolment Ratio for higher education in Brazil, India, China <34% while in US >80%

▪Fewer number of articles/1000 inhabitants: <0.2 for BRICs while >1.1 for US and UK

This­quality­gap­can­be­overcome­by­using­3­key­levers­effectively:

1.Policy:­ensure growth across both, ‘elite’ and ‘mass’ educational institutions

2.Ecosystem: build higher educational infrastructure, strengthen linkage with industry and invest in cutting edge research

3.Technology: use technological innovations to improve access to higher education

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BRICs are important globally

­At­Abbott­Labs,­we­see­emerging­markets­such­as­BRICs,­contribute­to­40%­of­our­sales:­we­expect­that­to­grow­to­nearly­50%­by­2015

­BRICs­make­up­nearly­40%­of­world­population­with­a­rising­middle­class­that­has­an­increased­purchasing­power2

­BRICs­will­contribute­37%­of­global­growth­in­2011-16:­this­will­increase­their­share­of­global­economic­output­from­19%­to­23%1

1 The BRICs: propping up the global economy, International Business Report 2012, Grant Thornton2 CIA World Fact Book

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However, there exists a gap in quality of higher education in BRICs

▪ Only­2­universities­(Peking and Tsinghua universities in China) in the top 100 from BRICs in the Times Higher Education Rankings in 2011-12– US had 51 and UK 12 in the top 100 respectively

▪ The Higher education Gross Enrolment Ratio in Brazil, India and China was below­30%­while­it­was­83%­for­the­US­­and­57%­and­for­UK2

1 A Norwegian perspective on higher education in the BRICS countries; University of Oslo, 5 Dec 20132 UNESCO Global Education Digest 2010: Comparing Education Statistics Across the World. Data from 2008 (India 2007)

­­In­scientific­publishing­(2011),­India­has­the­lowest­no.­of­articles/1000­inhabitants1

0.120.040.200.18

1.14

1.57

­In­terms­of­Relative­citation­index­(2008-10),­BRIC­nations­score­below­911­

9169

5165

137141

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This quality gap is due to 3 reasons: shortage of quality faculty, lack of adequate funding and insufficient R&D

Shortage­of­quality­faculty

5xAverage­faculty­salary

$200,000$40,000

3xTotal­Faculty 26590

1

Lack­of­adequate­funding

1000xEndowment­size $3­Billion$3­Million

4xStudent­fees­per­year $60,000$16,000

Primary­sources­of­funding

Fees,­Endowment,­Industry

Government

2

IIM­AhmedabadHarvard­Business­School

Global­Ranking­(FT­2014)

130

Insufficient­Research­and­Development

100xSpend­on­Faculty­Research

~$110­Mn<$1­Mn

Global­Ranking­in­Research­(FT­2014)

197

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Note: $1 = INR 50; Source: Google

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This quality gap can be overcome by using 3 key levers

Ensure­growth­across­both,­

‘elite’­and­‘mass’­educational­institutions

Policy Ecosystem

Technology

Use­technological­innovations­to­improve­access­to­higher­

education

Build­higher­educational­

infrastructure­and­invest­in­cutting­edge­research

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This quality gap can be overcome by using 3 key levers

Ensure­growth­across­both,­

‘elite’­and­‘mass’­educational­institutions

Policy Ecosystem

Technology

Use­technological­innovations­to­improve­access­to­higher­

education

Build­higher­educational­

infrastructure­and­invest­in­cutting­edge­research

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BRICs spend less on higher education publicly and have a wide quality gap between elite and mass institutions

1 World Bank statistics on Higher Education2 University Expansion in a Changing Global Economy: Triumph of the BRICS?; Stanford University Press; Martin Carnoy et al

0.50.60.7

0.9

1.3

2.6

­­Public­expenditure­on­higher­education1­

­BRICs­have­moved­from­a­free­or­subsidized­public­education­model­to­a­higher­fee-based­

public­and­private­systems

% of GDP▪ BRICs have focused on

improving quality in only few elite institutions, resulting in a wide quality gap with mass institutions

– Underlying assumption is that few high quality graduates are sufficient for economic growth

▪ A Stanford research study2 found that BRICs focus on investing in elite colleges whereas majority students attend mass colleges

– In 2009, 85% of total undergraduates in China and 96% in India matriculated from mass institutions

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In India, this quality gap between elite and mass institutions will have significant adverse impact in the long run

1 Research by Christ University , Bangalore, India and The Indian Express Group2 Toward World-Class Status? The IIT System and IIT Bombay; N Jayaram3 Source: Pitchbook

▪ ~500,000 students appear for ~10,000 seats in the IITs of which 50%2 go abroad for further studies

▪ IIT alumni rank in the top 10 for starting new companies globally

IITs­are­renowned­globally

Alumni­founded­companies­receiving­VC­funding­since­2010

▪ Academically bright students get admitted to subsidized institutions that are of high quality, such as the Indian Institutes of Technology (IITs)

▪ Majority of remaining students join lower quality institutions that have higher fees, especially in technical and professional education

▪ With a severe shortage of quality higher education institutions, India now faces the challenge of educating nearly 30% of its 1.1 billion population

600­

universities

35,000­

colleges

India­has­the­3rd­largest­education­system­in­the­world­but­majority­is­medium-low­quality­

India­has­the­3rd­largest­education­system­in­the­world­but­majority­is­medium-low­quality­

Medium­or­Low­quality1

68%universities

73%colleges

Higher­education­policy­needs­be­used­as­a­lever­by­BRICs­to­ensure­equitable­access­to­quality­higher­education

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This quality gap can be overcome by using 3 key levers

Ensure­growth­across­both,­

‘elite’­and­‘mass’­educational­institutions

Policy Ecosystem

Technology

Use­technological­innovations­to­improve­access­to­higher­

education

Build­higher­educational­

infrastructure­and­invest­in­cutting­edge­research

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BRICs suffer from poor institutional infrastructure in higher education

­BRIC­higher­educational­infrastructure­does­not­allow­imparting­quality­education

High­student­faculty­ratios­(India­at­23:1,­Brazil­at­17:1­while­US­at­13:1)

Disproportionately­high­%­of­students­studying­Science­and­Engineering­(>35%­in­India­vs.­<20%­in­US)

Lack­of­innovative­teaching­delivery­methods­that­leverage­technology­and­peer-to-peer­learning­

Limited­or­low­financial­support­infrastructure

Lack­of­international­faculty,­students­and­partnerships

Source:1. UNESCO Global Education Digest 2010: Comparing Education Statistics Across the World. Data from 2008 (India 2007)2. UGC; “Humanities or STEM? Looking at the Most Popular Majors for US Students”, Jan 11, 2012, Joshua Wright3. EY Report – 40 million by 2020: Preparing for a new paradigm in Indian Higher Education, 2009

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‘University-Industry’ ecosystems in developed economies have created game changing innovations

University-Industry­systems­have­pushed­research­and­innovation,­fuelled­by­industry­backed­investment­and­influx­of­intellectual­resource­from­universities

▪ ‘Silicon Valley’ is a Technology ecosystem in California

– Stanford, U C Berkeley and Cal Tech have promoted cutting edge research

– Revolutionary technology firms such as Facebook, Google, Yahoo and Cisco were built here

▪ Cambridge, UK has a Biotech ecosystem

– University of Cambridge has promoted rapid scientific research by setting up infrastructure & attracting investors

– Over 100 Biotech and Pharma majors are based in science parks at St John’s College, Trinity College and surrounding areas

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The Boston-Cambridge area in Massachusetts has a robust Biomedicine ecosystem

­­­­Skilled­human­capital

ScientistsDrug developers

Entrepreneurs Students

Universities

Hospitals

Large­Biotech

Healthcare­IT

Research­Institutions

Big­Pharma

Biomedicine­startups

Funding

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BRICs need quality higher educational infrastructure: Indian School of Business (ISB) is one such example in India

▪ ISB started with a vision to be an internationally top-ranked, research-driven, independent management institution, that grooms leaders for India and the world

▪ McKinsey designed the strategy and brought together leading corporate leaders and academicians as founders, faculty and potential recruiters

Leading­corporates­across­Banking,­Consulting­and­­Technology­are­

recruiters

Ranked at 30th in

the Financial­Times­Global­MBA­Rankings­for­2014

1996 2014

▪ Over 100 visiting faculty each year from leading universities across the world

Quality­global­faculty

Alumni­network

Diverse Distinctive Fast­Growing

5200­Alumni

32Countries

Source: ISB Website

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Ashoka University is another example of quality higher educational infrastructure that is developing in India

▪ Ashoka University is a not-for-profit that provides Liberal Arts and Sciences education in India

▪ It has been founded by successful Indian entrepreneurs, industrialists and academicians

▪ It has tie-ups with leading global universities such as University of Pennsylvania, University of Michigan and Sciences Po

Academic­flexibility: students can pursue multidisciplinary programs such as Computer Science & Entrepreneurship or Economics & Finance

Needs-blind: allows better access to quality higher education for meritorious but financially challenged students

“We are aspiring to be world class and we will do everything to make that happen”. – Co-founder, Dr Pramath Sinha (ex Partner, McKinsey and Founding Dean, ISB)

Fellows­from­Ashoka­University’s­Flagship­program,­Young­India­Fellowship,­have­started­their­own­ventures,­work­in­leading­corporates­such­as­McKinsey­and­Abbott,­and­study­in­leading­universities­such­as­Oxford­and­Stanford­

Source: Ashoka Univ Website

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This quality gap can be overcome by using 3 key levers

Ensure­growth­across­both,­

‘elite’­and­‘mass’­educational­institutions

Policy Ecosystem

Technology

Use­technological­innovations­to­improve­access­to­higher­

education

Build­higher­educational­

infrastructure­and­invest­in­cutting­edge­research

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Access to quality higher education is a serious issue in BRICs; technology is the only cost effective solution

In BRICs, significant population lives in areas with poor connectivity and finding access to quality higher education is challenging

However, with increasing internet penetration (~30% by 2015), Massive Open Online Courses (MOOCs)

is an innovative way to combat this issue of access

MOOCs allow people an option of quality learning online from professors in leading universities across the world at a very nominal cost

The largest MOOC providers – Coursera, Udemy, Udacity, and EdX – offer free tuition, supplied by universities, to

hundreds of thousands of students at a time

Source: Financial Times, Moocs growth? Head for India, Nov 15, 2013

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EdX was one of the first MOOC platforms and is governed by MIT and Harvard

­

▪ Expand access to education for everyone

▪ Enhance teaching and learning on campus and online

▪ Advance teaching and learning through research

edX has 3 goals

Variety

Subjectssuch as Science, Art and Technology,from leading professors worldwide

Learning

Learning through tools, videos and game-like labs such as the ‘3D virtual molecule builder’.

FlexibilityCourseswith flexibleschedules that can be taken on the go

Peer-to-peer

Social learningfrompeers aroundthe world

How it works

Courses and Faculty

courses in many areas of study, including humanities,

math, computer science, physics

200+faculty and staff

teaching courses and discussing topics

online

400+

certificates proudly earned by edX students

100,000+

Source: EdX website

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MOOCs have become popular in emerging markets such as India

▪ Emerging markets with a young aspirational population and growing internet penetration are a real market for MOOCs

▪ In nations with few high quality colleges, the opportunity to learn from a Harvard professor is immense– For example, unique visitor numbers increased between May and August in 2013 by 5% in India

Majority­of­Indian­visitors­to­MOOC­websites­are­youngTotal unique Visitors, By Country, By Age Group, July 2013

100%

80%

20%

60%

40%

0%

India

0.23­Million

Age 15-24

Age 25-34

Age 35-44Age 45-54

Age 45-54Age 55-64Age 65+

Age 25-34

Age 35-44

US

0.8­Million

Age 13-17Age 18-24

> 150%

101-150%

51-100%

0-50%

<0%

Total Unique Visitors growth

Total=­1­Million

~50%­US­visitors­are­under­34,­with­27%­of­its­population­that­age

~80%­India­visitors­are­under­34,­with­35%­of­its­population­that­age

Source: The Parthenon Group

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However, MOOCs need to overcome language and employability barriers to become successful

With­translation­into­Portuguese­or­Mandarin,­MOOCs­market­could­explode­in­other­BRICs

A­limiting­factor­for­MOOCs­is­language­as­MOOCs­are­currently­primarily­in­English­and­therefore,­more­accessible­to­India’s­population­than­other­BRICs

MOOC­platforms­will­have­to­examine­students­and­that­could­involve­investment­in­physical­centers­in­foreign­lands

­Another­limiting­factor­is­that­employers­currently­don’t­recognize­MOOC­as­a­relevant­degree­for­employability

Source: Financial Times, Moocs growth? Head for India, Nov 15, 2013

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What is the way forward?

The­quality­gap­in­higher­education­in­BRICs­can­be­improved­by­:

▪ Policy: ensure growth across both, ‘elite’ and ‘mass’ educational institutions

▪ Ecosystem: build higher educational infrastructure, strengthen linkage with industry and invest in cutting edge research

▪ Technology:­use technological innovations, such as MOOCs, to improve access to higher education

So,­what­can­Oxford­do­to­help?

Could­Oxford­setup­satellite­campuses­in­BRICs?11

Could­Oxford­partner­with­BRIC­universities­where­part­education­is­completed­at­Oxford?

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­Could­Oxford­share­its­leading­faculty­with­more­BRIC­universities?33

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Rehan Abbas Khan

FirstPenguin1

Rehan.Khan@abbott.com