How Industry Can Help in Improving IT Education in India

India is on the move. While a lot of different sectors have started growing at good pace, it is IT sector which has really been the driver of growth for last decade or more, and has the potential to lead India for another couple of decades at the very least. There is one small hitch though. We don't have enough trained manpower.

Now, in a country of more than one billion people, saying that we can't grow fast enough because we do not have enough people is difficult to believe, but it is true. While the higher education sector (only the formal sector giving degrees such as BTech, BE, MCA, MSc, etc., and not the training industry like NIIT) produces almost 3 lakhs graduates every year, only 1 lakh out of them is really employable by IT industry. Even with this 1 lakh, the industry has to spend on additional training. And beyond this 1 lakh, industry does hire because it has no option, but the training costs are huge. As a result of this huge mismatch between demand and supply of good quality engineers, the salary costs are going through the roof, and the country's advantage of lower cost is steadily eroding. (We can still continue to grow based on our quality, but if we also had a cost advantage, the growth would continue to be spectacular, as it had been in the past.)

Why is the quality of our graduates so poor. For producing good-quality graduates, you need three ingredients - good faculty, good students, and good infrastructure. A lot of colleges do provide a decent infrastructure for IT education (you really need very little compared to other engineering streams). Students produced by school system could be better, but they are certainly not very poor quality. So, the real reason for poor quality of graduates is lack of good quality faculty in most IT/CS departments across the country.

Why don't we have enough good quality faculty in IT/CS departments in our engineering colleges. Well, one can argue that we aren't producing enough PhDs, or even MTechs, and hence the pool is small. And most colleges end up hiring BTechs, or MCAs. Graduates of one batch may teach the next batches till they find a suitable job. But is it really a problem of insufficient research students. If yes, then I will ask the question, why are there not enough research students. But I will cut all that out, and come to the basic point.

We pay peanuts to faculty. If we give peanuts, we will only get monkeys.

Just compare the salary levels of industry and academia. Even in IITs, the best instutions in the country, the salary of a faculty member is some times lower than the salary that industry offers to its graduates. It can be very demoralizing, and many people tend to leave the faculty jobs for greener pastures. In any case, to begin with, only a few people who really value the academic freedom, or have a keen interest in teaching and research, join the faculty.

So, in my opinion, the biggest bottleneck to the growth of quality education in IT/CSE areas is the compensation package of faculty members. Now, government will not do much in this regards. A government, surviving on the crutches provided by communists, cannot even think of providing differential (market-linked) compensation package in education sector, and increasing salaries of all faculty members in all colleges in all disciplines is just too expensive, and that, of course, will have an effect of others asking for more wages also.

Even in private colleges, the wages are effectively controlled by the government indirectly. Though theoretically, government only determines the lower ceiling on salary, but by tightly controlling the number of seats, and the tution that the college can charge from each student, government has ensured that private sector is unable to pay lucrative salaries to faculty.

It is interesting to note that there is perhaps a need for about 25,000 IT/CSE faculty members in about 2000 engineering colleges in the country. The number of PhDs in these colleges is not even five percent of it. In any sector of economy, with 95 percent shortage, there will be massive crisis. The salaries will be going through the roof. We will be talking about hiring people from abroad. But because of the tight control that the government has on the education sector, nothing of sorts is happening.

In such a scenario, what can industry do to help improve the quality of education. Of course, industry can do all the soft things - application software companies can give software at very low cost, hardware companies can give some more discounts on hardware, other companies can organize training sessions for teachers, provide course material, etc. And all of that undoubtedly helps.

But what is really needed at this time is to find ways to improve the compensation packages of faculty members in these areas, and since government isn't going to do it in the government colleges, and won't deregulate education sector to let market forces play a role in salary, the industry has to think about solving this problem to some extent, and I give below some ideas on what industry can do.

So the basic idea is that industry should plough back some of its profits back into colleges in ways that increase the compensation packages of the faculty there. The obvious question that a company is going to ask is which colleges does one support. Obviously a company cannot support all 2000 colleges. A support for college should be in proportion to the benefit that they get from that college. And this can be worked out in a variety of ways:

Pay back for every student hired. The idea is simple. You hired a fresh graduate (or a student just before graduation). You found her good, and she has worked for you for a year. Now is the payback time. For every such employee, send a thank you note, and a check equivalent to one month salary of the employee, back to the college from where this employee graduated, on the condition that a good percentage of the amount will be distributed to faculty of IT/CSE department(s). This will also encourage the colleges to teach their students the importance of stability and not changing jobs frequently, since they get some cash only for graduates who stay in their first job for at least a year.
Matching donations by employees. The other method is to just give donations to IT/CSE departments of various colleges, irrespective of whether you hired from there this year or not. Now, one could ask HR department to keep track of the names of colleges from where each employee graduated, and contribute to all such colleges in the proportion of the number of employees from that college who work in this company. There is a simple way in which many companies in the US operate. Any donation that an employee makes to her alma mater is matched by the company. Usually there are limits on the matching grant, since no company would want an unlimited liability on this count. Now, the grant to a college which really put in a lot of effort, and its alumni appreciate that a lot, and give gifts to it, will be large, and college which didn't quite do a good job, and its alumni aren't going to donate a paisa, would get no money. So the company does not have to do any complex calculations, and colleges benefit. Each IT/CSE department may have an endowment where such moneys can go, and whose interest will be used for the department, including paying higher benefits/ perks compared to the standard packages of that college.
Set up Chairs and Awards The last two mechanisms for support were primarily based on the premise that a company would like to support colleges from where it is getting the maximum benefit. In some cases, a company may just want to support good-quality departments or good-quality faculty members only.
Companies may set up chairs in the departments. This would involve giving a large sum of money upfront (say, Rs. 50 lakhs). They may provide certain guidelines on selection of a faculty member who will benefit from such a chair. And once a faculty member is selected, the interest of the endowment is used to give an extra honorarium to this faculty member and also take care of some of the professional expenses of the faculty member, like conference travel, etc.
Otherwise, companies may set up their own awards. Every year, they may decide to award 5-10 faculty members (billion dollar companies may want to award 10 or more faculty members every year, while smaller companies may have smaller number of awards). Each award may have some honorarium, and some professional expenses, for a period of say, three years. But there is no one-time endowment expense in this case. Companies can give just the yearly amount to the college to distribute to the faculty member.

In summary, there is a dire need for improving the quality and quantity of faculty members in various IT/CSE departments across the country, so that the industry can continue to get good-quality graduates for its massive expansion. The biggest bottleneck in hiring ruch a faculty is the poor compensation package compared to industry salaries. Government salaries are fixed, and cannot be changed easily. Private colleges are regulated and are allowed to charge only a small tution, and their business model, therefore, does not allow higher salaries. Industry can provide financial support to IT/CSE departments to add on some money to what a faculty member is anyway getting. This support can be in terms of paying for each student hired, or matching grant for donations by their employees, or setting up chairs in specific departments, or setting up awards.

Assuming that the software industry in 2006-07 will be earning at least 20 billion USD, if the companies start spending 0.1 percent of this amount (which comes to 20 million USD or about R. 90 crores) to support higher salaries for faculty (Rs. 2 lakhs extra for 4500 faculty members), the quality and quantity of graduates can go up substantially, and that will allow the companies to grow even further.

You can send me email at: sanghi[AT]gmail.com