Exemplified by the large US universities, innovation and research undertaken by large number of post-graduate students sows seeds for long-term economic sustainability of nations. China is emulating the US to become the next frontier in higher education, barring the unenviable disadvantage of English language proficiency.
A quick China-India comparison with respect to enrolment in higher education is worthy of note. A look at the statistics indicates that the new enrolment for the Master's programme in engineering and management are about 125,000 and 45,000 in China respectively.
However, in India the number of students enrolled in a Masters programme in engineering is about 20,000, of which the share of Indian Institute of Technology (IIT) is a mere 2,800.
In management, the elite Indian Institute of Management (IIM) altogether have about 1,400 seats for the PGDBM (MBA) programme. The number of students enrolled in PhD programmes in engineering and management in China is about 22,000 and 5,000 respectively.
India graduates less than 1,000 PhD students in engineering. Each IIM graduates on the average 5-7 FPM (PhD) students per year, which makes it very inefficient to even conduct classes.
This stark difference in numbers should set alarm bells ringing for the high-tech industries in India, which boast of huge professional manpower as the reason for their growth and outsourcing opportunities.
Can we withstand yet another beating, this time in higher education, by the Chinese? What are the reasons for such a disparity?
The main reason is the different models of higher education being pursued in these two countries. China has a system of funding large public universities, similar to that in the US.
For example, out of the 795 institutes that provide post-graduate programmes in China, none is privately-owned. These institutions are funded by central ministries and local educational departments.
Most of the centrally-funded institutions are large having 30,000-50,000 students (across graduate and post-graduate programmes). For instance, Shandong University in Jinan, China, consists of about 60,000 students (nearly as big as some of the largest universities in the US).
Fudan University in Shanghai, which hosts the Shanghai Forum every year, consists of nearly 30,000 students. The advantages of large universities are clear. They have state funding, and have large campuses (e.g. land-grant universities in the US mid-west), huge physical and financial resources, a large number of students and faculty.
Researchers have empirically proved that economies of scale exist in higher education, especially in postgraduate educational institutions. In a study on US PhD-granting institutes, the minimum efficient scale was found to be between 11,000 and 30,000 students.
However, India depends merely on seven IITs and seven IIMs to make all the difference to higher education. In a welcome move, six more IITs were set up in 2008 and three more are under consideration. However, these are neither large nor adequate to give quality education to the approximately 138-million youth who are in the age range of 15-25 years.
Since these institutions are autonomous and independent in their functioning, the benefits of economies of scale can never be tapped, resulting in higher long-run average costs, thus necessitating either more funding by the government or higher tuition fees as indicated by the recent hike in fees by some of the IIMs.
Researchers have also proved that economies of scope also exist in higher education and that those institutes who have graduate and post-graduate teaching along with research programmes are more efficient compared to the ones who specialise in a niche area.
Further, large universities having different departments and schools enable the exchange of ideas in a much more fruitful manner across disciplines. For example, most of the US universities have large economics departments outside the business schools from where business students can take specific economic courses, thus benefitting from the faculties' specialisation.
The importance that the Indian government has given to specialised engineering and management institutes has also resulted in the neglect of other social and physical sciences.
The new government should take higher education as one of the priority areas for the development of our country's intellectual capital. Though public universities exist in India, the quality of infrastructure and faculty are worrisome.
It is time that we follow the footsteps of the US and China and create large universities of international standards. As Professor Arthur Bienenstock of Stanford University points out, a good university should have high-quality post-graduate students who want to learn to perform research, an intellectual climate that encourages scholarship, facilities in which teaching and research can be performed effectively, adequate funding, and quality leadership.
Let us try to create institutions of higher learning that benefit from economies of scale and scope and not dilute our educational infrastructure as placement corporations. Only then we will be able to take on the onslaught of China in the not too distant future.
The authors are Research Fellow, Sasken Communication Technologies and Senior Research Fellow, Public Affairs Centre Views are personal.