Saturday, August 30, 2014

Becoming an Impactful Scholar: A 5-Point Individual Agenda

This year I had multiple opportunities to speak to doctoral students and faculty at some of our leading institutions. IIM Rohtak had organized an internal Faculty Development Workshop; IIM Ahmedabad invited me to speak to their new cohort of doctoral students; and we had our own Faculty Development Programme (see picture below) as well as the Conference for Excellence in Research & Education (CERE) at IIM Indore.

Through this blog, I want to share the perspective I presented to these groups.

First, here’s a quiz question. Who are the five people in the picture below?

Anil Gupta is arguably the foremost evangelist of grassroot innovators in developing countries. He has spent the last twenty years documenting their innovations and recognizing the innovators.

Raghunath Mashelkar has had a distinguished career as a scientist and engineer. He led the National Chemical Laboratory with great distinction and later, as Director General of CSIR, raised national awareness of intellectual property rights.

Arogyaswami Paulraj developed the first indigenous sonar for the Indian Navy and later set up the Central Research Laboratory for Bharat Electronics Ltd. He moved to Stanford after taking early retirement from the navy, and is today credited with being one of the inventors of MIMO technology, a critical part of the backbone for 4G wireless systems.

Manindra Agarwal and two of his students at IIT Kanpur developed an algorithm that works in polynomial time to determine whether a number is prime. They thereby solved a problem that had defied mathematicians for years.

Ramachandra Guha is today India’s leading modern historian apart from being an acclaimed columnist and writer about cricket.

What’s common between Anil Gupta, Mashelkar, Paulraj, Manindra and Ram Guha?

For one, of course, they have all been very successful in their chosen fields and received international acclaim. But they have one common characteristic – they all received their PhDs from India, and all of them made their primary intellectual contribution working in India.

It is possible to work in India and do world class intellectual work. We saw another example of this in my previous post on Prof. J. Ramachandran.

So, what do we need to do if we want to emulate any of these successful scholars?

I suggest the following 5-point Agenda:

View Yourself as More than a Teacher

The first important thing is to view oneself as more than a teacher. Ideally, one should see oneself as an engaged scholar who moves seamlessly between creating new knowledge and disseminating it. One has to see research and knowledge creation as core, not as an additional chore. In the management sphere, it is important to straddle conceptual strength, rigour and relevance in any such research one undertakes. See my earlier post on Prof. J. Ramachandran for some insights into how to do this.

Focus & Strategic Intent

The second (and probably equally important to the first) thing is to focus. With the explosion of knowledge today, it is unlikely that one can become an outstanding scholar in multiple areas. Instead, one should choose any one area that has potential impact and dig into that area.

Becoming an acclaimed scholar is a marathon and not a sprint, so one should be willing to be in it for at least the next 5 years, probably even more. Along with focus, one should ideally have a strategic intent to be the best scholar in that (sub-) field of choice and be willing to work hard towards that. Aligning one’s teaching to the focus area to the extent possible would help one synergise different activities.

Of course, if one has a choice, one should be careful in choosing the institution where one works. The key question is, “does the institution support the development of engaged scholars?” Does it allow the time and space, and provide the infrastructural as well as intellectual support to promote such development?

Benchmark against the Best

The third important requirement is to benchmark against the best. Today, Indian institutions may not expect the same quantity and quality of research output as established institutions abroad do. But, to become a well-accepted global scholar, one should take on the same standards as would be expected by a top institution anywhere. For example, a young assistant professor entering an IIM should benchmark herself against the tenure requirements of a top US school.

Continuous Improvement

Becoming an acclaimed scholar will involve considerable stretch. While the aspiration or strategic intent to become one might provide the energy and push to get there, the mechanics of reaching there are still important.

I have been impressed by the idea of deliberate practice. Research on high performing sportsmen and performers shows that they have put in more than 10,000 hours of practice before they reach the pinnacle of their discipline. But, just spending 10,000 hours is not enough – these 10,000 hours need to be spent on continuous improvement, often driven by a coach or mentor who can identify one’s weaknesses and help one iron them out.

This idea of continuous practice can be applied to scholarship as well: take on more difficult research problems, reach out to higher quality publication outlets, and strive to enhance one’s teacher ratings based on feedback.

Having a good mentor is invaluable in this process. Unfortunately, there are not enough good mentors around in India, so one might have to reach out to established scholars in other parts of the world. Fortunately, there are many scholars of Indian origin all over the world who are willing to help.

Manage your time Judiciously

Last, but certainly not the least, is good time management. I have already emphasized focus and aligning one’s teaching and research to the extent possible. As a young professor, everything looks interesting, but it is imperative to be focused and avoid getting into activities that distract from good scholarship. If one has a choice, its good to stay away from routine academic administration at least in the formative years. I would suggest doing the minimum required to be a good organizational citizen, but otherwise staying away from tasks that distract one from the main mission of scholarship.


As I mentioned earlier, institutional support is important for an individual scholar to make his mark. What should be the institutional agenda to support such individual scholarship? That will be the subject of one of my next posts!

[The views expressed here are the personal views of the author.]

Thursday, August 21, 2014

Creating Management Thought Leadership from India

There is a gradual yet perceptible change happening in our top management institutions as far as research and publication is concerned. More faculty are taking research seriously, and targeting top journals to publish their findings.

This shift is the result of three drivers: Firstly, institutional policy changes now place more emphasis on research output as a requirement for promotion. Secondly, a new generation of better trained and research-oriented faculty has joined these institutions. And, thirdly, and perhaps most importantly, there is a growing aspiration to be seen as more than a teacher, i.e. to make a place for oneself among the larger academic peer community.

The Challenge of Thought Leadership

Many observers of Indian management academia have been critical of our failure to achieve thought leadership. What these critics seem to mean is that we don’t have management gurus from India who are world renowned, and whose ideas are eagerly applied by managers everywhere. We have no Michael Porters or Philip Kotlers from India. Of course, there have been India-born management gurus like CK Prahalad or Sumantra Ghoshal, but they made their reputations outside India’s borders.

Thought leadership is not achieved by merely proclaiming oneself as a thought leader. You can be called a thought leader only when others believe you are one!

Thought leadership has some of the characteristics of what we in strategy call a difficult-to-imitate resource. Becoming a thought leader is a causally ambiguous process – it’s difficult to outline an algorithm that will necessarily lead to thought leadership. It’s also somewhat path dependent – you have to be at the right place at the right time working on the right theme. Whether you consider Boston Consulting Group’s Growth Share Matrix, or Prahalad’s “Bottom of the Pyramid” or Vijay Govindarajan’s “reverse innovation,” all of them achieved widespread traction only because they were relevant to real issues that businesses were facing.

Of course, just good and relevant ideas may not be enough. There is often an element of marketing and branding that goes into thought leadership these days.

One barrier to the development of thought leadership from India has been the absence of role models. We haven’t had people we can look up to, working from within India, who have achieved this status. Luckily, that’s changing now.

Emergence of Indian Role Models

An important milestone in the evolution of Indian management thought leadership was crossed when, in December 2013, an article titled “Why Conglomerates Thrive” was published in Harvard Business Review (HBR).

What was special about this? Well, to the best of my knowledge, this was the first time that an article written by business academics based in India was published in HBR.

HBR has an iconic yet paradoxical status in the world of management academia. It is not the typical peer-reviewed, research-based journal full of complex mathematical models or tables of regression coefficients. Yet, it is arguably the most influential management publication outlet as it is read by managers all over the world, particularly in important markets like the US.

HBR may not figure on the “A” lists of leading business schools when it comes to research rigour, and business academics may speak about it disdainfully. Yet I doubt that there are many business academics who don’t have a strong yet secret desire to be have their ideas feature in HBR. Put simply, having your ideas published by HBR is an important step to achieving thought leadership.

I have had the privilege of knowing the authors of “Why Conglomerates Thrive” closely. Prof. J. Ramachandran (JR), the lead author, was my senior colleague at IIM Bangalore (IIMB) from the time I joined there in 1996. The other two authors, KS Manikandan and Anirvan Pant, were both doctoral students at IIMB, and are today faculty members at IIM Trichy and IIM Calcutta respectively.

Inspiration to Indian Management Scholars

JR’s story can be a good source of inspiration to management scholars from India aspiring to thought leadership. A chartered accountant by training, JR graduated from the doctoral programme at IIM Ahmedabad in the 1980s. He had a long spell in the corporate sector (Reliance, Mudra) before joining IIMB as a faculty member in 1991. This was a good time to become a management faculty member, with economic liberalization just taking root and IIMB itself embarking on a journey of change under the leadership of Prof. KRS Murthy (path dependence at work!).

JR’s academic journey started with his focusing on building his reputation as a teacher. He must have done this very well because almost any IIMB alumnus from the 1990s whom I meet asks about him! This is corroborated by his amazingly consistent high teaching feedback scores.

Troubled by the lack of good case studies from the Indian context, JR embarked on writing cases to fill this gap. His cases on the Indian Watch Industry (the eclipse of HMT and the emergence of Titan) and Reliance (co-authored with Sumantra Ghoshal) made a mark, and he received several case awards. Case-writing has continued to be a passion for JR, and his cases on Bharat Forge, ITC and Hindustan Unilever (all with different co-authors) have been recent hits. Teaching, case-writing, and consulting were his focus areas till around 2003.

I am not sure what exactly was the trigger, but around 2003, JR decided to turn his attention to research. (Until then he had appeared somewhat skeptical about publication in peer-reviewed journals because it appeared irrelevant to most managers.)

A few important decisions followed: He decided to submit at least one paper every year to the Academy of Management (AoM) annual conference, the most prominent conference for academics working in “management” (organizational behavior, human resource management and business policy/strategy) in the US. He became active in teaching in IIMB’s doctoral programme and soon had some of the best doctoral students working with him.

Over the last decade, JR remained wedded to three things – relevance, rigour and strong conceptual thinking. This combination of what Van de Ven calls “Engaged Scholarship” has been the distinctive feature of his journey towards thought leadership. JR’s own intellectual contribution may have been more on the relevance and conceptual dimensions but he worked closely with talented and contemporary doctoral students who could bring in the methodological rigour that they had imbibed from their doctoral training.
While many scholars from India have taken the route of collaboration with established names abroad to navigate the treacherous waters of publication in top journals, JR eschewed this and took the risky path of going on his own. There were many disappointments on the way, but his fierce determination driven by confidence in his own ideas enabled him to overcome these setbacks. During this journey, he remained focused on two themes: the evolution of Indian business groups (with a strong belief that the Indian business group has many strengths that are not apparent to the west) and the internationalization of Indian firms.

A key milestone in this journey was the acceptance of the paper “Beyond Institutional Voids: Business Groups, Incomplete Markets and Organizational Form” accepted for publication by the strategy field’s top journal, Strategic Management Journal in late 2013. This was the paper that provided the rigorous justification for the arguments advanced in “Why Conglomerates Thrive.”

What can we take away from the JR Story?

There are several takeaways from the JR story. At the top, I would emphasise the importance of how we faculty see ourselves, i.e. the question of identity. As I mentioned in an earlier post, we need to see ourselves as more than teachers. JR’s experience suggests that we need to see ourselves as engaged scholars, striving for rigour, relevance and conceptual or theoretical clarity in all we do.

This identity needs to be backed up by strong aspiration and drive. Without that we simply won’t have the intellectual and physical energy to overcome the obstacles that will inevitably come in our way. Almost all successful people have a certain perseverance and doggedness that differentiates them from others who give up along the way. Trying to achieve thought leadership is no different.

Choice of problems and focus are also critical. We need to work on problems that are of importance to India but have wider significance. The unique strengths of (Indian) business groups are of interest within our country, but also to managers elsewhere because they call into question some of the “accepted wisdom” on the demerits of conglomerates.

“Bowling alone” is unlikely to work. We need to find good collaborators who complement our skills. JR found them in some very talented and capable doctoral students. Others might find them in colleagues within India or abroad.

I haven’t taken Prof. Ramachandran’s permission to write about this. But I am confident that he won’t mind as long as this acts as an inspiration to many others!

[The views expressed here are the personal views of the author.]

Saturday, August 16, 2014

The Future of Indian Management Education

The annual Indian Management Conclave (IMC) organized by has become an important event to take stock of the state of management education in India and to identify new ways forward. At the insistence of Chairman Amit Agnihotri, I attended the fifth IMC last weekend. Amit had managed to put together a good set of speakers including several from overseas (many through video). Unfortunately, I managed to catch only the second day of the event.

Indian Management Education: Vision 2025

One of the highpoints of this year’s IMC was the release of a document titled “Indian Management Education: Vision 2025” (the photo below shows B-school deans discussing the report). Frankly, I was quite skeptical at first, but upon reading the document I realized that it has some good points. It starts with a useful historical perspective that brings out the steady evolution of Indian management education till the explosive growth over the last two decades. There is a simple SWOT analysis that brings out the current status of different categories of management institutes and programmes.

Indian management education is clearly heterogeneous and not all business schools can or should have the same agenda. Therefore, one thing I particularly liked about this vision document is the attempt to segment Indian management education into 3 distinct segments.

Vision 2025 sees India creating 50 “global” business schools, 500 “national” business schools and 2000 “skill-based” business schools. The global business schools will have one of the three global accreditations, be known for their research and thought leadership, be ranked internationally and have international students as part of their student body. The national business schools are seen as aligning with at least one important dimension of India’s national development agenda and focused on meeting national needs. And the “skill-based” business schools will be linked to the Skills Development Mission of the country and meet clearly defined skills requirements as emerging from new initiatives like the National Skills Framework.

China has done better than India

The Vision 2025 document brings out some sharp contrasts between India and China in the realm of management education. Though China embarked on management education only two decades ago, it has done much better than India in terms of accreditation and global rankings. But the document does not explore in detail why there is this difference. From what I have read and heard, here are a few things that China has done to advance high quality management education:

  • Encouraged reputed international scholars to work in Chinese institutions by creating chairs and special positions;
  • Encouraged collaboration with top international institutions – e.g. China Europe International Business School (CEIBS) at Shanghai;
  • Used dollar-equivalent salaries to attract Chinese scholars living outside China to return to Chinese institutions (this goes beyond management education to all disciplines of higher education);
  • Brought in strong publication requirements in business schools (again, across the higher education system) matched by generous incentives;
  • Used existing universities in Hong Kong and new ones such as Hong Kong University of Science & Technology (HKUST) to attract foreign scholars;
  • Made a special effort to attract journal editors and other academic gatekeepers to spend time in Chinese academic institutions.

In 1999, I attended the inaugural meeting of the Asia Academy of Management in Hong Kong. HKUST, which was one of the hosts of the conference, had just hired Anne Tsui as the Dean of its business school. Professor Tsui was by then an accomplished scholar in the United States and editor of one of the top management journals, Academy of Management Journal. I heard on the grapevine that this was a strategic hire, based on the assumption that this would give scholars in Hong Kong and China easier access to the editor of a top journal.

The contrast with India is sharp. Until Ashish Nanda and Sushil Vachani were recently appointed to directorial positions at IIMA and IIMB respectively, except for a brief spell when renowned Marketing scholar Vijay Mahajan was dean of ISB from 2001-03, Indian business schools have never hired top academics as deans even though the higher rungs of US academia are filled with Indians.

Can 50 Indian business schools break into the global ranks? Perhaps, but the more relevant question is how do you get there? The Vision 2025 document does talk about research and thought leadership. These words have been bandied about for quite some time now, amidst comments from several stakeholders that Indian institutions are “laggards in research” (this phrase is used in this Vision 2025 document as well).

Creating 50 Global Business Schools

The Vision 2025 document takes India as a whole as its unit of analysis. But I see significant challenges at both the national level as well as the individual institutional level if India is to get anywhere near the magical figure of 50 global business schools.

I would like to focus on just two challenges here, and will return to this theme in later posts. Both of these relate to faculty.

If we are to create 50 global business schools, we need at least 3,000 high caliber, productive faculty (assuming 300 students admitted each year to the MBA programme and a student-faculty ration of 10:1). While some institutions like the older IIMs are well endowed on this dimension with a faculty size of about 100 faculty each, there is an acute shortage of faculty who can combine good teaching abilities with the motivation and ability to do good research.

Urgently Needed: A Bold Initiative to Address Shortage of High Quality Faculty

How do we overcome this shortage?

When IIMA was started in the 1960s, India lacked a strong tradition of management education and hence there were few faculty available in management disciplines. IIMA recruited talented young men and sponsored them to do a PhD in the US, including at Harvard Business School. Some of these faculty later became the mainstay of the IIMA faculty body.

When I was a graduate student at Stanford in the 1980s, my roommate who was a lecturer at the National University of Singapore was fully sponsored by NUS to do his PhD. Of course, he later returned to NUS and works there as a professor even today.

If we are serious about this target of having 50 global business schools, we need a bold initiative on a large scale to address the faculty issue. Taking a cue from the IIMA and NUS examples cited above, the government should consider an initiative to sponsor 100 highly talented individuals with Masters degrees from our leading institutions every year to top quality doctoral programmes in the US and selected other countries. In ten years, we will have around 500 well-trained faculty who can spearhead management education in India for the next 25-30 years. Care should be taken to ensure diversity on all counts in this initiative.

Transforming the Identity and Self-image of Faculty

There is a second issue which I believe will need to be addressed if this dream of 50 global business schools is to become a reality: Faculty in these schools will need to view themselves differently from the way many faculty in India do today.

The principal identify of an Indian faculty member is as a teacher. The nobility of teaching others is ingrained in us (even if we as a society don’t extend the same respect to teachers as we did in the past!). In most cases, research is seen as an additional chore, not as an integral part of one’s role as a faculty member.

But, as has been mentioned in the Vision 2025 document, research and thought leadership are integral to creating 50 global business schools. So, this self-image of faculty has to change if we are to get anywhere near this goal. This requires changes in our institutional processes as well as in our doctoral programmes.
Inducting 500 faculty from top doctoral programmes outside India as outlined above should help because foreign PhD programmes in top schools do a good job of moulding their students and creating a strong orientation towards research. But change within our institutions will be needed as well to sustain the momentum of research once these individuals join our institutions as faculty.

My talk at IMC was on “Creating Management Thought Leadership from India,” and that will be the subject of my next post.

[The views expressed here are the personal views of the author.]

Saturday, August 9, 2014

Can China Lead in Innovation?

I just finished reading a fascinating book, Can China Lead?: Reaching the Limits of Power and Growth (Harvard Business Review Press, 2014) by three very experienced scholars from Harvard Business School and Wharton. For a book whose central text (excluding appendices, tables and notes) is just 180 pages, this book is majestic in its sweep as it seeks to cover history, politics, economics and business in China.

The book is not heavy on data, and the conclusions reached are somewhat impressionistic, but there are enough anecdotes and examples to support the main arguments of the authors (Regina Abrami, William Kirby and Warren McFarlan). They have been working in and on China for three decades, written several cases on organizations in that country, and seen at first hand the rapid evolution of China into the economic powerhouse that it is today.

The authors’ broad conclusion is, in keeping with the view of many western scholars, that one-party rule and the need to sustain the supremacy of the military and the communist party will prevent or at least attenuate China’s ability to gain global leadership. Intriguingly, they also suggest that China is not seeking global dominance, and many of the actions of the Chinese government that appear to be in that direction are actually just designed to protect the supremacy of the party at the helm of affairs.

One of the features of this book that attracted me to read it is a chapter devoted to innovation in China, provocatively titled “Planning Innovation.” This chapter follows one with the catchy title of “The Engineering State.”

Engineering in China

No one who visits China (especially from India!) can fail to be impressed by the scale and scope of that country’s infrastructure. Multiple concentric circles of multi-lane ring roads, flyovers and bridges, metro trains and more recently high speed rail links are prominent across all of China’s cities.

What I realized after reading this book is that what we are seeing in China today is not the product of a recent vision, but has its origins in a picture of China drawn by Sun Yat-Sen almost a hundred years ago. The realization of this vision is the result of not only determined project management and control from the top, but a strong belief in engineering and technology. The authors provide evidence to show that the top Communist Party and Military leadership in China is dominated by engineers, and this strong belief in engineering is reflected in the complex projects they undertake (including the controversial but massive Three Gorges Dam) and execute successfully.

China’s Evolving Innovation System

China’s innovation system has evolved rapidly in recent years. Here are the some prominent contemporary features I could put together from this book:

  • China has a large array of technology parks, many of which are in the proximity of universities. Many of these parks are specialized in particular domains and attract start-ups and established companies in those particular domains including biotechnology, nanotechnology, gaming and animation, etc.
  • China is able to attract a good number of its citizens who go abroad to study back to the country, and some of these returnees do start innovative enterprises.
  • Established Chinese firms are good at integrating and adapting technology. While initially they may have “borrowed” these technologies from others, today they are well enough endowed to acquire companies anywhere in the world that can provide them the technological capabilities they need.
  • Some firms in advanced technology areas like Huawei have been able to create a global R&D network much like that of established multinational companies. Huawei’s senior management team includes a former US diplomat and senior managers from industry leaders like Nortel and BT. It’s global R&D is headquartered in Silicon Valley.
  • The Chinese government is determined to achieve independence in what it considers strategic technologies. It wants to restrict technology imports to under 30% of its needs. It is willing to use public procurement to support local technology development. (All this is corroborated by China’s current aggressive stance against companies like Microsoft.)
  • China’s emphasis on high technology to meet pressing local needs is resulting in useful spillover effects. One example is the high speed train program which the authors liken to the US space program in terms of impact. Another example is electric battery technologies for transportation – environmental concerns are driving China to look for alternatives to fossil fuel driven transportation systems.

  • China has in place a strong funding system for university R&D, modeled along the lines of the US National Science Foundation. This book (and other writing on R&D in China) clearly indicates that no investment is being spared in building R&D capabilities in Chinese universities.
  • Over the last 15 years, the Chinese higher education system has undergone a huge transformation. While the initial focus was on scale (resulting in a manifold increase in capacity and hence gross enrolment ratio), universities at the top end have embraced quality research, created new programs and built some of the best university infrastructure in the world. The authors note, in particular, the emphasis of China’s top universities like Tsinghua and Peking on liberal arts (particularly the humanities) to bring in fresh thinking.

Will China’s prowess in engineering + policy measures get translated into technology leadership?

In spite of all these positive developments riding on top of China’s demonstrated prowess in traditional engineering areas, the authors come to the surprising conclusion that China is unlikely to become a leader in innovation in the immediate future.

How did they reach this conclusion? The book suggests that in spite of all these impressive achievements there is still a lack of confidence, and an inclination to see the west as more capable. The Chinese education system, despite all its transformation, remains oriented towards rote learning. But more than anything else, they attribute this to the control system that operates in China. For instance, they point out that a University President is lower down in the pecking order than the Party representative at the University, and hence the Party’s view prevails in academic decision-making. The concept of faculty-driven decision-making does not exist, in their view. They provide examples of good business ideas that couldn’t take off because they came into conflict with the government/party’s notion of stability of the State.

My conclusion: China may lead in certain areas

But, it seems to me that in areas where large investments are required like complex systems technologies, and where national security and safety issues don’t come into conflict, China could very well take the lead in the years to come. They seem to have all the policy ingredients in place. Today, R&D is global, and China with its huge financial endowments is in a position to literally “buy” collaboration from a financially-distressed west. Above all, China has a strong determination to win. So, I don’t necessarily agree with the conclusion the authors have reached in their otherwise well-researched and very informative book.

[The views expressed here are the personal views of the author.]

Sunday, August 3, 2014

Can India Arrest the Slide in its Innovation Ranking?

Over the last few years, the Global Innovation Index (GII) compiled annually by INSEAD, WIPO and Cornell University has become the most commonly accepted global indicator of nations’ innovation performance. So, there has been much angst in India over the last couple of weeks once it emerged that India has fallen 10 places in the last year from 66 to 76. [Link]

About the Global Innovation Index

I have written about the GII in this blog before. Just by way of reminder, the GII measures national innovation performance by looking at a whole set of variables related to both innovation input and output. The innovation input index is a function of institutions, human capital and research, infrastructure, market sophistication and business sophistication. The output index considers knowledge and technology outputs as well as creative outputs.

My main reservation about the way this index is computed is that some of the variables are general business climate variables and not specific to innovation per se. I also wonder whether there is a degree of double counting in the index – at the minimum, I suspect some of the variables they measure are strongly correlated with each other.

But the good thing about the GII is that it has now fallen into a pattern, is fairly stable in the way it is compiled year after year, and therefore should give us a sense of broad trends even if the exact score computed is not sacrosanct.

Why are we slipping?

To see why we are slipping, I took a closer look at the scores of India vis-à-vis China. As the two “emerging market” giants, the world often sees China and India as competitors (though we all know, of course, that China has been ahead of India in the economic sweepstakes). And, to make it even juicier, China’s rank on the GII has been improving unlike ours which has been steadily declining!

There is not much difference in scores between India and China as far as institutions are concerned and this has been the case for the last few years. Not surprisingly, China scores much better than India on infrastructure, but many of the infrastructure variables captured in the GII are broad ones like electricity output and logistics performance, and we know that India has a long way to go on these parameters. So, there is no great surprise here.

On market sophistication (credit, investment, trade and competition), India has actually pulled marginally ahead of China in GII 2014, though we trailed China last year. Many of the parameters that go into this metric are again broad ones that would go into any competitiveness study and are not specific to innovation.
On business sophistication (knowledge workers, innovation linkages, knowledge absorption), China is ahead, but the gap has declined marginally from 2013 to 2014. That’s a good sign, and India is even ahead of China on a couple of sub parameters that add up to this score – state of cluster development and joint venture/strategic alliance deals.

Then, where is the slippage and is it a cause for concern?

Yes there is a concern, because the most serious gaps between India and China are on two critical parameters that are linked intimately to innovation: the input parameter relating to human capital and research, and the output parameter relating to knowledge and technology outputs.

Though we keep emphasizing the importance of leveraging the demographic dividend, and both education and skill development have been flagged for some years now as critical issues, India’s Achilles heel continues to be what is represented by the Human Capital and Research (HCR) parameter of GII.

We are behind China on every single component of this parameter. The three main constituents of HCR are (school) education, tertiary education and research and development. On both (school) education and R&D, the gap between India and China is widening fast. Only in tertiary education is the gap narrowing, and that is because of recent improvements in India’s Gross Enrolment Ratio.

School Education

This assessment of (school) education is corroborated by reports like the Annual Survey of Education (ASER). ASER 2013 shows that while the percentage of children out of school has declined, the percentage of children in Standard V who can read a Standard II text has also declined from 52.9% to  47% between 2009 and 2013. While there have been noteworthy efforts to improve school education including the government’s Sarva Shiksha Abhiyaan (which can take some credit for the improvement in school enrolments) and private efforts like that of the Azim Premji Foundation on the quality side, clearly we have a long way to go before we can ensure a foundation of good schooling to our kids.

Research and Development

The R&D issue is more tricky. India’s R&D intensity has remained stubbornly range-bound between 0.9% and 1% for the last two decades. We pride ourselves on our ability to make do with less as exemplified by the achievements of the Space programme in the public sector, and that of automotive and pharmaceutical companies in the private sector. Yet, our adverse trade balance and poor standing in high technology industries (except for a small number of honorable exceptions) show that we have been unable to develop the sophisticated technological capabilities needed to hold our own in global markets.

There is a “chicken and egg” problem here – some firms don’t invest in R&D because they don’t have the right people to do R&D. And, in those companies where they do have the right people, the top management does not have the confidence to put enough resources behind the team.  Either way, firms fail to develop a sound R&D and innovation capability.

Given these problems, it is not surprising that India lags on knowledge and technology output as well.

I have my doubts about the GII’s methodology in calculating the other output parameter – creative outputs. GII shows a huge swing from 2013 to 2014 on this parameter with India well ahead with respect to China last year, yet lagging China significantly in 2014. Since a country’s creative outputs can’t change that rapidly, I am inclined to just ignore this parameter.


I am not too optimistic about India reversing this downward trend in GII quickly. Some of the announcements by the new government will help enhance economic institutions, investments and infrastructure if they are pursued seriously. But, it is not clear how and when the slide in human capital and research (as measured by the GII) will be arrested. Some of my pet ideas in this direction are in the slide below.

[The views expressed here are the personal views of the author.]