1. The Oxford Symposium 2014: ‘BRICs and the Quality gap – how to overcome it’ Rehan A. Khan Managing Director, Abbott India Limited 29 th August 2014

2. 2 Executive Summary ­BRIC economies are important globally: ▪ BRICs will contribute 37% of global growth in 2011-16, increasing their share of global economic output from 19% to 23% ▪ Developed nations critically depend on manpower from BRICs in sectors such as IT However, there exists a gap in quality of higher education in BRICs: ▪ Only 2 BRIC universities in Top 100 of the 2011-12 Times Higher Education Rankings ▪ Gross Enrolment Ratio for higher education in Brazil, India, China 80% ▪ Fewer number of articles/1000 inhabitants: 1.1 for US and UK This quality gap can be overcome by using 3 key levers effectively: 1.Policy: ensure growth across both, ‘elite’ and ‘mass’ educational institutions 2.Ecosystem: build higher educational infrastructure, strengthen linkage with industry and invest in cutting edge research 3.Technology: use technological innovations to improve access to higher education 1 1 2 2 3 3

3. 3 BRICs are important globally ­At Abbott Labs, we see emerging markets such as BRICs, contribute to 40% of our sales: we expect that to grow to nearly 50% by 2015 ­BRICs make up nearly 40% of world population with a rising middle class that has an increased purchasing power 2 ­BRICs will contribute 37% of global growth in 2011-16: this will increase their share of global economic output from 19% to 23% 1 1 The BRICs: propping up the global economy, International Business Report 2012, Grant Thornton 2 CIA World Fact Book

4. 4 However, there exists a gap in quality of higher education in BRICs ▪ Only 2 universities (Peking and Tsinghua universities in China) in the top 100 from BRICs in the Times Higher Education Rankings in 2011-12 – US had 51 and UK 12 in the top 100 respectively ▪ ­The Higher education Gross Enrolment Ratio in Brazil, India and China was below 30% while it was 83% for the US and 57% and for UK 2 1 A Norwegian perspective on higher education in the BRICS countries; University of Oslo, 5 Dec 2013 2 UNESCO Global Education Digest 2010: Comparing Education Statistics Across the World. Data from 2008 (India 2007) ­­In scientific publishing (2011), India has the lowest no. of articles/1000 inhabitants 1 0.12 0.04 0.20 0.18 1.14 1.57 ­In terms of Relative citation index (2008-10), BRIC nations score below 91 1 91 69 51 65 137 141

5. 5 This quality gap is due to 3 reasons: shortage of quality faculty, lack of adequate funding and insufficient R&D Shortage of quality faculty 5x Average faculty salary $200,000 $40,000 3x Total Faculty265 90 1 Lack of adequate funding 1000x Endowment size$3 Billion $3 Million 4x Student fees per year$60,000 $16,000 Primary sources of funding Fees, Endowment, Industry Government 2 IIM Ahmedabad Harvard Business School Global Ranking (FT 2014) 1 30 Insufficient Research and Development 100x Spend on Faculty Research ~$110 Mn <$1 Mn Global Ranking in Research (FT 2014) 1 97 3 Note: $1 = INR 50; Source: Google

6. 6 This quality gap can be overcome by using 3 key levers Ensure growth across both, ‘elite’ and ‘mass’ educational institutions Policy Ecosystem Technology Use technological innovations to improve access to higher education Build higher educational infrastructure and invest in cutting edge research

7. 7 This quality gap can be overcome by using 3 key levers Ensure growth across both, ‘elite’ and ‘mass’ educational institutions Policy Ecosystem Technology Use technological innovations to improve access to higher education Build higher educational infrastructure and invest in cutting edge research

8. 8 BRICs spend less on higher education publicly and have a wide quality gap between elite and mass institutions 1 World Bank statistics on Higher Education 2 University Expansion in a Changing Global Economy: Triumph of the BRICS?; Stanford University Press; Martin Carnoy et al 0.5 0.6 0.7 0.9 1.3 2.6 Public expenditure on higher education 1 ­BRICs have moved from a free or subsidized public education model to a higher fee-based public and private systems % of GDP ▪ BRICs have focused on improving quality in only few elite institutions, resulting in a wide quality gap with mass institutions – Underlying assumption is that few high quality graduates are sufficient for economic growth ▪ A Stanford research study 2 found that BRICs focus on investing in elite colleges whereas majority students attend mass colleges – In 2009, 85% of total undergraduates in China and 96% in India matriculated from mass institutions

9. 9 In India, this quality gap between elite and mass institutions will have significant adverse impact in the long run 1 Research by Christ University, Bangalore, India and The Indian Express Group 2 Toward World-Class Status? The IIT System and IIT Bombay; N Jayaram 3 Source: Pitchbook ▪ ~500,000 students appear for ~10,000 seats in the IITs of which 50% 2 go abroad for further studies ▪ IIT alumni rank in the top 10 for starting new companies globally IITs are renowned globally Alumni founded companies receiving VC funding since 2010 ▪ Academically bright students get admitted to subsidized institutions that are of high quality, such as the Indian Institutes of Technology (IITs) ▪ Majority of remaining students join lower quality institutions that have higher fees, especially in technical and professional education ▪ With a severe shortage of quality higher education institutions, India now faces the challenge of educating nearly 30% of its 1.1 billion population 600 universities 35,000 colleges India has the 3 rd largest education system in the world but majority is medium-low quality Medium or Low quality 1 68% universities 73% colleges Higher education policy needs be used as a lever by BRICs to ensure equitable access to quality higher education

10. 10 This quality gap can be overcome by using 3 key levers Ensure growth across both, ‘elite’ and ‘mass’ educational institutions Policy Ecosystem Technology Use technological innovations to improve access to higher education Build higher educational infrastructure and invest in cutting edge research

11. 11 BRICs suffer from poor institutional infrastructure in higher education ­BRIC higher educational infrastructure does not allow imparting quality education High student faculty ratios (India at 23:1, Brazil at 17:1 while US at 13:1) Disproportionately high % of students studying Science and Engineering (>35% in India vs. <20% in US) Lack of innovative teaching delivery methods that leverage technology and peer- to-peer learning Limited or low financial support infrastructure Lack of international faculty, students and partnerships Source: 1. UNESCO Global Education Digest 2010: Comparing Education Statistics Across the World. Data from 2008 (India 2007) 2. UGC; “Humanities or STEM? Looking at the Most Popular Majors for US Students”, Jan 11, 2012, Joshua Wright 3. EY Report – 40 million by 2020: Preparing for a new paradigm in Indian Higher Education, 2009

12. 12 ‘University-Industry’ ecosystems in developed economies have created game changing innovations University-Industry systems have pushed research and innovation, fuelled by industry backed investment and influx of intellectual resource from universities ▪ ­‘Silicon Valley’ is a Technology ecosystem in California – Stanford, U C Berkeley and Cal Tech have promoted cutting edge research – Revolutionary technology firms such as Facebook, Google, Yahoo and Cisco were built here ▪ Cambridge, UK has a Biotech ecosystem – University of Cambridge has promoted rapid scientific research by setting up infrastructure & attracting investors – Over 100 Biotech and Pharma majors are based in science parks at St John’s College, Trinity College and surrounding areas

13. 13 The Boston-Cambridge area in Massachusetts has a robust Biomedicine ecosystem Skilled human capital Scientists Drug developers Entrepreneurs Students Universities Hospitals Large Biotech Healthcare IT Research Institutions Big Pharma Biomedicine startups Funding

14. 14 BRICs need quality higher educational infrastructure: Indian School of Business (ISB) is one such example in India ▪ ISB started with a vision to be an internationally top-ranked, research- driven, independent management institution, that grooms leaders for India and the world ▪ McKinsey designed the strategy and brought together leading corporate leaders and academicians as founders, faculty and potential recruiters Leading corporates across Banking, Consulting and Technology are recruiters Ranked at 30 th in the Financial Times Global MBA Rankings for 2014 1996 2014 ▪ Over 100 visiting faculty each year from leading universities across the world Quality global faculty Alumni network DiverseDistinctive Fast Growing  5200 Alumni 32 Countries Source: ISB Website

15. 15 Ashoka University is another example of quality higher educational infrastructure that is developing in India ▪ Ashoka University is a not-for- profit that provides Liberal Arts and Sciences education in India ▪ It has been founded by successful Indian entrepreneurs, industrialists and academicians ▪ It has tie-ups with leading global universities such as University of Pennsylvania, University of Michigan and Sciences Po ­Academic flexibility: students can pursue multidisciplinary programs such as Computer Science & Entrepreneurship or Economics & Finance Needs-blind: allows better access to quality higher education for meritorious but financially challenged students “We are aspiring to be world class and we will do everything to make that happen”. – Co-founder, Dr Pramath Sinha (ex Partner, McKinsey and Founding Dean, ISB) Fellows from Ashoka University’s Flagship program, Young India Fellowship, have started their own ventures, work in leading corporates such as McKinsey and Abbott, and study in leading universities such as Oxford and Stanford Source: Ashoka Univ Website

16. 16 This quality gap can be overcome by using 3 key levers Ensure growth across both, ‘elite’ and ‘mass’ educational institutions Policy Ecosystem Technology Use technological innovations to improve access to higher education Build higher educational infrastructure and invest in cutting edge research

17. 17 Access to quality higher education is a serious issue in BRICs; technology is the only cost effective solution In BRICs, significant population lives in areas with poor connectivity and finding access to quality higher education is challenging ­However, with increasing internet penetration (~30% by 2015), Massive Open Online Courses (MOOCs) is an innovative way to combat this issue of access MOOCs allow people an option of quality learning online from professors in leading universities across the world at a very nominal cost ­The largest MOOC providers – Coursera, Udemy, Udacity, and EdX – offer free tuition, supplied by universities, to hundreds of thousands of students at a time Source: Financial Times, Moocs growth? Head for India, Nov 15, 2013

18. 18 EdX was one of the first MOOC platforms and is governed by MIT and Harvard ­ ▪ Expand access to education for everyone ▪ Enhance teaching and learning on campus and online ▪ Advance teaching and learning through research edX has 3 goals Variety Subjects such as Science, Art and Technology, from leading professors worldwide Learning through tools, videos and game-like labs such as the ‘3D virtual molecule builder’. Flexibility Courses with flexible schedules that can be taken on the go Peer-to-peer Social learning from peers around the world How it works Courses and Faculty courses in many areas of study, including humanities, math, computer science, physics 200+ faculty and staff teaching courses and discussing topics online 400+ certificates proudly earned by edX students 100,000+ Source: EdX website

19. 19 MOOCs have become popular in emerging markets such as India ▪ ­Emerging markets with a young aspirational population and growing internet penetration are a real market for MOOCs ▪ In nations with few high quality colleges, the opportunity to learn from a Harvard professor is immense – For example, unique visitor numbers increased between May and August in 2013 by 5% in India Majority of Indian visitors to MOOC websites are young Total unique Visitors, By Country, By Age Group, July 2013 100% 80% 20% 60% 40% 0% India 0.23 Million Age 15-24 Age 25-34 Age 35-44 Age 45-54 Age 55-64 Age 65+ Age 25-34 Age 35-44 US 0.8 Million Age 13-17 Age 18-24 > 150% 101-150% 51-100% 0-50% <0% Total Unique Visitors growth Total= 1 Million ~50% US visitors are under 34, with 27% of its population that age ~80% India visitors are under 34, with 35% of its population that age Source: The Parthenon Group

20. 20 However, MOOCs need to overcome language and employability barriers to become successful With translation into Portuguese or Mandarin, MOOCs market could explode in other BRICs A limiting factor for MOOCs is language as MOOCs are currently primarily in English and therefore, more accessible to India’s population than other BRICs MOOC platforms will have to examine students and that could involve investment in physical centers in foreign lands ­Another limiting factor is that employers currently don’t recognize MOOC as a relevant degree for employability Source: Financial Times, Moocs growth? Head for India, Nov 15, 2013

21. 21 What is the way forward? The quality gap in higher education in BRICs can be improved by : ▪ ­Policy: ensure growth across both, ‘elite’ and ‘mass’ educational institutions ▪ ­Ecosystem: build higher educational infrastructure, strengthen linkage with industry and invest in cutting edge research ▪ ­Technology: use technological innovations, such as MOOCs, to improve access to higher education So, what can Oxford do to help? Could Oxford setup satellite campuses in BRICs? 1 1 Could Oxford partner with BRIC universities where part education is completed at Oxford? 2 2 ­Could Oxford share its leading faculty with more BRIC universities? 3 3

22. 22 Rehan Abbas Khan FirstPenguin1 Rehan.Khan@abbott.com