This Summer IIT Kharagpur,the oldest and largest among all IIT's opened India's first Technology and Entrepreneurship school to promote technology ventures by the technology and business students on campus.With this IIT Kharagpur is close on heels to becoming the next MIT after successfully diversifying into Management (Vinod Gupta School Of Management) and Law (Rajiv Gandhi School Of Intellectual Proprietary Law).All IIT Kharagpur programmes are now top ranked in their respective domain,and with an excellent blend of world class faculty,students and renowned alumni,Kgp sees itself not far from Harvard's, Yale's and MIT's of the day.
Despite all the above ,and producing some of the most noteworthy global alumni in its relatively short span of existence ,what keeps IIT Kgp and other top class Indian universities from becoming truly world class is the lack of funding and adequate infrastructure.Figure this IIT kharagpur has a n annual budget of approximately Rs 100 crores ($20 million) which is nothing when compared to Harvard's $27 billion endowment fund (after it lost about 20% value in 2008 stock market crash).So far IIT's and IIM's have been successful in producing some of the best managers researchers and enterprenuers merely due to the fact that they provided a congenial learning environment to the best minds of the Indian sub continent.
However in order to move to a new era of higher education that not only produces best minds for industry but also cutting edge research,noble prize winners and solves plethora of industrial consultancy requirements we need a massive amount of funding in public higher education system in India.With Kapil Sibal and Co deciding to opt out of any more investments ,the onus is now on IIT's and IIM's to raise their own finances.
IIMs started this some year ago by raising their fees and trying to make it at par with global B schools.IIM Ahmedabad,for long crowned a the mecca of managment education in India would be charging more than Rs 13 lakhs this year.On PPP basis this would translate almost equivalent to Harvard's $100,000 fee for its flagship 2 year MBA programme.The Ministry Of Higher Education states that IIT's and other IIM's follow suit.However the problem with this approach ,although looking soothingly delicious is that like US it would make higher education a baston of few elites and outside the hands of worthy.The very purpose of social and economic equality that IITs were supposed to achieve would be lost.
An alternate way of raising finances for the infrastructure development would be by following suit of what many public and private sector companies have been doing for long.Yes ,the idea is to tap the untamed power of capital and bond markets which have financed the biggest and wildest projects mankind has ever dreamt of.Its time that institutes of higher learning break their bond with no profitability while at the same time creating social value .
IITs can grow on robust and sustainable business models which dont only create shareholder value but remain profitable propositions in the growth of the nation.Its apt time to replace IIT Kharagpur's "Dedicated to the service of the nation" to "Dedicated to the service of nation,shareholders and academics".
To prove my point let me key some key business propositions that these institutes can ta into to create shareholder value after being listed on key brouses across the world
PATENT LICENSING :While IITs and IIMs today undoubtedly produce the best graduates in the world .However its time that they start concentrating more on research and stop being factories producing exotic minds for the corporate world.The vast money raised through IPO's can be used for promoting research facilities.The patents so produced can be licensed to industry.Think the synergy IIT's and industry can derive by working together .
CONSULTANCY SERVICES:Many IIT and IIM professors already extend high value consulting assignments to industry.IITs should form a separate consultancy company that competes with likes of Mc Kinsey and Bain and Co to tap into the billion dollar consultancy business.How many present companies can compete against the combined might of IIT /IIM infrastructure and intellectual capital
ON CAMPUS BUSINESSES : IIT's and IIM campuses boast of large tracts of unused land in many key parts of top class Indian cities.for eg IIT Mumbai has total land use area less than 60%(700 acres total area) in key commercial hub of Hiranandani in Mumbai.Why cant IITs lease out vacant land to develop business joints that benefits students while generating revenue like shopping malls,restaurants and other commercial ventures.
VENTURE CAPITALISM:Many IIT/IIM student start ventures while being freshmen in college.Many IITs have their own entrepreneurship cells that identify outstanding projects and arrange funding from industry or GOI .Besides incubating facilities like office space,mentorship,telephone etc is provided free of cost.Why cant IIT fund these startups and then like an astute trader exit at a later date.Most of the Silicon Valley is credited to have been created by freshmen from Stanford .
MANAGEMENT SEATS:While the very brings frowns on face of many,theres nothing wrong in putting aside a few coveted IIT seats for the rich and famous.How Narayanmurthy would have liked his son to graduate from IIT Bombay and what price would he have paid for the seat?Its a captive source of revenue that could be used for subsidising education of lesser mortals
Finally its time IITs start attracting foreign students on campus.Indians studying abroad are a major source of revenue for UK and US governments .Whats hindering IIT/IIM's from doing that.
Undoubtedly a listing on public brouses would bring three fold brnefits of much needed funding,superior management and a futuristic vision.
Winner Winner Chicken Dinner
Its time to move into a new orbit altogether