Thursday, Nov 27, 2014

It’s not Harvard vs hard work

Investing in skill-building and opportunities for meaningful education is the only way to make hard work count for something. CR Sasikumar Investing in skill-building and opportunities for meaningful education is the only way to make hard work count for something. CR Sasikumar
Written by Bhaskar Chakravorti | Posted: March 4, 2014 3:24 am | Updated: March 4, 2014 9:11 am

We need to ensure opportunities for hard work. And that it is not Sisyphean toil leading nowhere.

The votes are in and we have a winner. After a war of words, the BJP and Congress found common ground; both Narendra Modi and P. Chidambaram cast their votes for hard work. Harvard, that noted refuge for the leisure class — where the most commonly handed out grade is an A, according to a recent admission by its dean of undergraduate education— is the clear loser. While Modi dismissed it altogether, Chidambaram hedged his bets by drawing on the “mere pas maa hai” card, implicitly acknowledging that whatever shortcomings Harvard may have had in nurturing his passion for toil, his mother has filled in the many gaps. “My mother and Harvard taught me the value of hard work,” the finance minister was quoted as saying during his budget speech to the Lok Sabha.

As an academic, it is hard not to feel wistful about the days when over-educated elites dressed up in homespun clothing and walked among the humble. Gone are the days when a Gandhi trained at the Inner Temple or a Nehru from Cambridge or an Ambedkar from Columbia could move the masses at their will. Today, Manmohan Singh’s Oxford PhD would be an effective tool to campaign against his party, if there weren’t already so many others in the toolbox. If it is of any consequence, Rahul Gandhi can proudly advertise that he never actually got a degree from Harvard, though he did attend some classes there (a fact that, no doubt, many of his detractors might bring up).

But enough of that useless nostalgia for the ivory tower. India is, indeed, in a post-postcolonial moment, where time manning the family tea stall should count for more than the hours wasted in existential angst patronising a campus coffee house. Modern India is, finally, a country of makers and doers — the home of the bootstrapped entrepreneur relentlessly seeking opportunity, the hub for disruptive industries that dismantle the global status quo, the birthplace of jugaad innovators who will change the world. Fancy degrees are for the birds.

Wait a minute. I may have got a bit carried away. Unfortunately, the facts on the ground may not give me licence to claim any of these things. Access to entrepreneurial levers and gaining economic freedom is a pipe dream for virtually all Indians; the disruptive (wish we could banish that over-used adjective) industries are not cutting it; and jugaad may be good enough to solve a small local problem but far from what it would take to scale up. Consider each, in turn.

First, economic freedom through entrepreneurship is a pipe dream. Since 1991, India has taken a turn away from its primarily agrarian origins towards a more modern industrial economy. The farmers, the original hard-working entrepreneurs of India, saw their lives changed as their sector has opened up to the wider world and are struggling to keep up. Farmer suicide rates make headlines, blame is assigned to everything from Monsanto to microfinance, but there are no real structural solutions to keeping the small farmers competitive. As more people abandon farms and move to cities in search of new industrial occupations, the picture does not seem to be that much better. According to The Economist, about 85 per cent of jobs in India today are in the informal sector, 11 per cent are casual jobs with formal companies. These are not entrepreneurs with tickets to economic freedom and upward mobility. Most of these hard-workers are in low-paying jobs and their livelihoods are insecure.

Second, disruptive industries are not cutting it. We have reached a point where many of the Indian industries that were on the verge of being global gamechangers are turning out to be out of sync with international business standards. This could mean loss of jobs and less work of any kind. Consider the case of the generic pharmaceutical industry, widely considered to be one of the finest examples of India’s disruptive powers. India supplies 40 per cent of over-the-counter and generic prescription drugs in the US. According to WHO estimates, 20 per cent of the generic drugs produced in India are fake. This has led to alarm bells going off in the US Food and Drug Administration, and emergency visits to India by its commissioner. The king of Indian disrupters, the BPO industry, which had its golden age during 2004-06, with profitability as high as 40 per cent of total revenue, has slowed down to margins of a mere 15 per cent. BPO jobs have left for the Philippines and Malaysia, and even to Mexico and Brazil. Even the dazzling Indian Premier League, which was in many respects an international game-changer, has lost its innovative allure with its associations with match-fixing, a trove of illegal activities and high-profile arrests.

Third, jugaad innovation sounds great, but it doesn’t scale. There are scores of examples of frugal solutions using simple, locally sourced ingredients and skills that find mention in the media. Unfortunately, there are few that find a platform to scale-up in terms of impact, value or job creation. With the exception of a few ventures, most of these have difficulty venturing beyond their local origins. Of course, we know that you have to take many shots to score a goal. But it is not clear that there are that many shots being taken, given the size of the economy. To use one benchmark, counting the number of filings of intellectual property, when China crossed the US in 2011 with 5,26,412 patent applications, India’s count was a distant 42,291.

Surely, the counter-argument to all this would be: just wait. The post-1990s economic emergence is still young. Demographically, India is a young country; just give the youth a chance and the demographic dividend will do wonders. However, the youth need skills to make their energy and hard work count for something. According to a 2012 OECD report, India is projected to produce 24.5 million graduates with tertiary education by the year 2020. Juxtapose that with the recent Aspiring Minds National Employability Report 2013 findings that nearly 47 per cent of graduates in India are unemployable. In other words, with no changes in the education system, nearly 12 million of the 24.5 million graduates in 2020 will be unemployed and unemployable. That still is merely the tip of the iceberg. The UN World Population Prospects 2012 projects that India’s population in the 25-34 age group will stand at 223.6 million, of which barely 11 per cent would have graduate degrees. Forget Harvard, even hard work may be out of reach.

So we are agreed: hard work will win in the end. But we have to ensure opportunities for hard work, and that hard work is not some Sisyphean toil leading nowhere. It does not matter whether India’s youth have to walk through Harvard Yard or attend Central University of Haryana. For this, we need commitments and investment from leadership in both the public and the private sectors. Given the size and potential of India’s youthful demographic bulge, investing in skill-building and opportunities for meaningful education is the only way to make hard work count for something. Hard work counts when it is a ticket out of a life of enduring hardship.

And all those young people are lining up for tickets — now.

The writer is senior associate dean for international business and finance at The Fletcher School, Tufts University and founding Executive Director of Fletcher’s Institute for Business in the Global Context

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