Dr. Rajesh K Pillania
Professor of Strategy, MDI, Gurgaon
We are firmly ensconced in the knowledge economy. In this knowledge economy, ideas and knowledge wield the workable power. Higher education generally and its offshoots of exports particularly are of strategic importance to any country in the world today. As India aspires to be an economic superpower and Atmanirbhar Bharat, the strategic importance of higher education in general and its exports in particular cannot be ignored any longer. There are many aspects behind it and five key aspects are discussed here.
Big Business Opportunity
Higher education is a big business opportunity. It is a service. Services export are of four types.
Mode 1 — Cross-border trade: from the territory of one member into the territory of any other member, for instance, online education.
Mode 2 — Consumption abroad: in the territory of one member to the service consumer of any other member, for instance, foreign students coming to India.
Mode 3 — Commercial presence: by a service supplier of one member, through commercial presence, in the territory of any other member, for instance, Indian institutions setting up a campus abroad.
Mode 4 — Presence of natural persons: by a service supplier of one member, through the presence of natural persons of a member in the territory of any other member, for instance, Indian professors going for less than a year assignments abroad (WTO,2020).
India thus needs to tap into this big business opportunity. It needs to explore all four modes of exports of higher education.
The Global Higher Education Market was valued at USD 65.40 billion in 2019 and is projected to reach USD 117.95 billion by 2027, growing at a CAGR of 8.25% from 2020 to 2027 (VMR, 2020). It is dominated by the US, UK, Australia, Germany, France.
India is a net importer of higher education, that is, imports exceed exports in higher education. India’s net inbound mobility in terms of the student population for 2017 was -0.285 million. With international higher education costs (inclusive of living expenses) ranging anywhere between 10,000 USD to 50,000 USD annually, that is a USD 8.5 bn lost in potential revenue. India’s share in export is 0.0625, India’s share in import is just 0.008 (UIS 2017). The top five countries from where students come to India are Nepal, Afghanistan, Bhutan, Nigeria, and Bangladesh. Top five countries where Indian students go are USA, Australia, Canada, the UK and Germany (UIS,217)
The strategic role of Higher Education in the important area of Culture
Higher education is a big source of exposing foreigners to Indian culture and taking the tenets of Indian culture for global learning.
Culture is both big business and source of power and is about the influence and attractiveness that a nation acquires when others are drawn to its culture and ideas. It enables a nation ‘to achieve desired outcomes in international affairs through attraction rather than coercion’ as mentioned by Prof Joseph Nye, Dean of Harvard University’s John F. Kennedy School of Government (2004). Culture is among the biggest exports in the US. After aircraft and related equipment, culture is the biggest export of the US, to quote Alan Rugman form his article written in 2003. India was the fifth largest exporter of cultural goods in 2013, with $11.7 billion (topped by China $60.1 billion and the US $27.9 billion). (UNESCO,2016).
Important for Innovation
Innovation is a key driver for economic growth in the knowledge economy. In the discipline of innovation, it is a fact that innovation takes place when diverse cultures and ideas come together. This is known as the Medici Effect (Johansson,2017). Bringing more students to India from diverse countries will open up opportunities for more new ideas and innovations. One of the reasons behind the innovation powers of the United States is its creation of higher education institutions which bring in a lot of talented people to places like Boston and California, two of the biggest innovation hotspots of the US.
Student mobility for Higher Education for India
Necessary for Economic Superpower
India aspires to be self-dependent and an economic superpower. It cannot happen just by following higher education and research from the west. By doing so, we are playing a follower’s game and we are perpetually simply catching up. We need to learn from them but not just copy them. We need to invest in creating research centers and higher education institutions where latest breakthrough research happens that opens up new education streams and industries. We need to invest in this difficult but critical segment and not get lost in the low hanging fruits of fast income from foreign students. Institutions like MIT and Harvard execute an important role in the successof education sector in the US. A similar role is played by the sort of success of Cambridge and Oxford universities.
Even for higher education teaching, we need to move beyond just offering courses that are offered in the west. We need to create more unique courses and degrees rooted in Indian tradition. The world today recognizes India’s strengths in yoga, meditation, and Ayurveda, to name a few. We need to create unique and innovative courses and degrees with relevance for the current times. This is largely unexplored territory but has a huge potential for India.
Significant for Building Brand India
Higher education has strategic importance in creating Brand India. Great institutions in India help in building brand India such as our IITs. When students come and study in a country, they tend to generate a lifelong soft corner and appreciation for the host country as the years they spent generates fond memories, friendships, and career opportunities.
To summarize, we have discussed briefly the five key strategic aspects of higher education in general and the role of education exports in particular. The important takeaway is that it is high time we realize this strategic importance of higher education and leverage it effectively.
(The author acknowledges the research support given by Ms. Anupama Kumar in writing this article)
WTO(2020), Definition of Services Trade and Modes of Supply, WTO website:https://www.wto.org/english/tratop_e/serv_e/cbt_course_e/c1s3p1_e.htm (Accessed on May 20, 2020)
UNESCO (2016). Report on Globalization of Cultural Trade, UNESCO website: https://en.unesco.org/creativity/sites/creativity/files/pdfglobalisation_of_cultural_trade_a_shift_in_consumption.pdf(Accessed on May 22, 2020)
Joseph S. Nye Jr.(2004), The Benefits of Soft Power, Harvard Business School Working Knowledge, Website: https://hbswk.hbs.edu/archive/the-benefits-of-soft-power (Accessed on May 21, 2020)
Johansson, F. (2017). The Medici Effect, with a new preface and discussion guide: what elephants and epidemics can teach us about innovation. Harvard Business Review Press.
UIS (2017). UNESCO Institute for Statistics (UIS) Website: http://data.uis.unesco.org/ (Accessed on May 21, 2020)
VMR (2020). Higher Education Market Size And Forecast. VMR website:https://www.verifiedmarketresearch.com/product/global-higher-education-market-size-and-forecast-to-2025/(Accessed on June 2, 2020)
The author is Professor of Strategy with Management Development Institute, Gurgaon.