Dinesh Singh By

A few years ago I had occasion to examine the earnings, for a particular quarter, of the IT firm Google. I then did the same for several of India’s giant IT firms, some of whom had been around for more than five decades. I could see a stark and very disappointing contrast. What Google had produced—as profits—in a single quarter, these firms had been unable to make—in that same quarter—even after clubbing their profits together. The reason for such a stark contrast is not far to seek.

Google runs its enterprise on the basis of a search engine that is powered by a mathematical idea. The origins of this mathematical idea owe their roots to the intellectual and knowledge traditions of Stanford University. On the other hand, as far as I can tell, not one of India’s IT firms has much of a connection, in a meaningful manner, with any university or knowledge institution in India. What profits these Indian IT firms make are reliant on that one solitary advantage that India holds over western nations for the moment. As we all know, that advantage comes in the form of cheap manpower that is good at executing the near manual tasks of writing software codes.

And while we are at it, we shall find it of much interest to examine, in a larger context beyond Google, the role that a university like Stanford has played in boosting the economy of the USA. In a well-researched survey, published in 2011, it was estimated that Stanford University had played a very recognisable role in the creation of nearly 40,000 companies. More interestingly, if the total economic size of these companies were to be treated as a single nation-like entity, then that entity would have been recognised as tenth in size amongst the economies of the countries of the world in 2011.

We can get a very good idea of what this means if we acknowledge that the size of the combined revenues of these companies in 2011 was much more than the size of India’s economy. Actually the revenues were a little less than $3 trillion in 2011. It is only now, in 2019, that India has been able to touch $3 trillion, eight years behind those combined companies. The number of jobs at that point in time that were directly owed to these companies was more than 50 lakh. This gives us an idea of the possible role a knowledge system can play in boosting the economy of a nation. It also tells us that the IITs, engineering colleges and universities in India have a long way to go. They need to play a more proactive role that creates and uses knowledge to the advantage of a nation rather than just produce graduates who in any case are largely unemployable.

The unfortunate part is that even though India, in the days of yore, played this game of a knowledge economy to perfection, somewhere along the line India lost its way. In fact, India dominated the world’s economy for centuries, as Angus Maddison records in his monumental treatise on the economic history of the world. Maddison establishes this on the basis of available records from the 1st century AD to the 17th century AD. Actually, there is enough evidence to show that the Indian dominance was in place several centuries before the commencement of the Christian era.

For instance, during the time of Alexander in 326 BC, when he came to conquer India, it was truly an economic powerhouse. There is a story connected with Alexander that also bears this out. After his initial successes in India, Alexander decided against crossing the Beas river when his spies returned to inform him that the powerful Magadhan army, comprising thousands of elephants and an equal number of cavalry, was waiting across the river with its soldiers eager to give battle.

A chastened and demoralised Alexander decided to return back to Greece. However, as the story goes, he found some cause for cheer when, on his way back, Porus gifted him several ingots of the already famous and much-prized wootz steel. It shall be of interest for the reader to note that the famous Damascus sword owed its reputation to this wootz steel from India. All that Damascus used to contribute towards the fabrication of this famous sword was to give physical shape to the steel ingots that were being imported from India.

From Alexander’s time till the time of Michael Faraday, in the nineteenth century, India’s wootz steel held sway across the world. Faraday would only use this Indian steel for his instruments. We can well imagine the kind of wealth, in terms of gold, that the export of this special high-quality steel brought to India. The point is that only India could produce this high-quality steel and that is a telling comment on the fact that knowledge systems had developed metallurgy and put it to use, which in turn boosted the economy.

The Harvard University scholar Joesph Nye, in his book Is The American Century Over?, published as recently as in 2015, examines nations that could be potential challengers to the economic dominance of the United States in the twenty-first century. He lists India as a potential challenger but then dismisses this eventuality for three major reasons. One of these three reasons for India’s inability to match up to the US—as cited by Nye—is that none of India’s universities figure in the top 200 in global rankings. Nye’s prediction for India is based on an unstated but well-acknowledged principle. Unless a country’s knowledge systems are in place at high levels and are tuned to its economic needs, the country shall not ever become an economic powerhouse on a sustainable and long-term basis.

The implication for India is clear. To truly have a strong economy, India needs to make sure that on a long term and meaningful level it has knowledge systems that power the economy. And on this count, Indian universities are not able to deliver. To add to our woes, by and large, the global rankings of Indian universities are steadily declining. For instance, the University of Delhi’s global ranking, in the various systems of ranking, has slipped by several hundred slots in the last three years. Whither India?