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“Private Higher Education: Opportunities and Challenges” – Remarks at the Higher Education Summit of the Federation of Indian Chamber of Commerce and Industry

New Delhi, India

Sugata, thank you very, very, much for that overly generous introduction. You fail in only one respect and that was management of expectations with respect to the quality of my remarks. Let me just say that I think it is of the greatest importance for Harvard that we expand our contacts in India and South Asia and that we strengthen our study of all issues relating to India and South Asia. Harvard University could not be more fortunate than to have someone like Sugata Bose leading our South Asia Initiative and I would be so bold to suggest that the University’s good fortune is also India’s good fortune. Thank you, Sugata, for everything that you have done and everything that you are going to do.

It is a great honor and a privilege to have a chance to speak at this conference and to follow so many distinguished speakers already. As I contemplate the task of following the many challenging speakers who have already spoken, I am reminded of a meeting I attended in the government when someone said, “This meeting is not over. Everything has been said, but everyone has not yet said it.”

And I am very mindful that I find myself again in the occupational hazard of the university president. The occupational hazard of the university president is that you are called on to speak in many different places – to a group of theoretical physicists one day, a group of divinity scholars the next day, to a group concerned with the constitution the third day, and a group concerned with the higher education in a particular nation on a fourth occasion. When you come right down to it, those things have nothing in common save for one thing – that on every single occasion everyone to whom I am speaking knows more about the subject of my address than I do, so I approach this topic with a certain humility here today.

I want to do three things and then, if the organizers will allow just a few moments, I can respond to whatever questions are on people’s minds.

First, reiterate the importance of higher education and private higher education for India. Second, offer some observations on why higher education in the United States has been successful and its implications for India. Third, say something about the issue of higher education as an export, which is something that I think needs more thought here in India.

First, the importance of higher education. Montek [Singh Ahluwalia] said it very well. We need to move beyond the traditional debate between primary and secondary education on the one hand and tertiary education on the other and what the balance between them should be. The answer is that everywhere in the world as we move towards a knowledge economy we need more of both. And that is surely true in India.

To discuss the question of how much more investment India needs in higher education is like the question of how much weight should I lose. It is not a critical issue starting from where we are right now, because we know which direction movement has to take place. Nor can there be any serious doubt that if objectives are to be achieved, there need to be increases both on the private side and the public side.

I was impressed by some figures that I was given suggesting that the U.S. and India have in common that about 70% of all education is publicly financed and 30% privately financed. But a sharp distinction between the U.S. and India occurs at the higher education levels – only 20% of Indian education is financed privately where as more like 50% of American education is financed privately, suggesting the desirability on grounds of balance of moving towards increased higher education. One of the reasons why this is so important? I would suggest three: Wisdom – education is in many ways the foundation for civil society and the basis for democracy; prosperity – there can be no question that increasingly higher education is central to prosperity and creating the kind of leaders of institutions that can drive an economy forward. Going back to Abraham Lincoln’s insight in starting the land grant college system in the United States, this has been recognized for a long time. Third, opportunity – the question of equality of opportunity is of central importance at a time of widening inequality in both my country and yours. And without providing a strong basis for individuals born in any circumstances to move to higher education there is not the possibility of creating the kind of equality of opportunity based on merit and excellence on which the legitimacy of our society depends. More and better higher education that my good friend Montek suggested – of the highest kind.

Second observation. Five lessons from the American experience for you to consider in strengthening your higher education system. First, the most important guarantor of both quality and adequate investments in American higher education is competition. All of us in American higher education, particularly at the highest levels, see ourselves as engaged in a brutal competition.

Sugata, as a member of the History Department, is constantly engaged in thinking about which outstanding historians from other universities we could – with appropriate tactics, appropriate salaries, with an appropriate offer – bid away from another institution. Even within the University, it is not uncommon for an outstanding social scientist to be recruited by both our Kennedy School and our Faculty of Arts and Sciences or for an outstanding biologist to be recruited by both our Medical School and our FAS. And we regard it all as good. Not as something to be discouraged, not as something to be managed, but something to be seen and treated as a spur forward. If there is a single reason why American education has excelled, it is the brutal competition for students, for faculty, for grant funds, that drives American institutions forward. And that is a central reason why private higher education is so important. At the risk of touching on a controversial issue, I will observe that this speaks in a fundamental way to the relative merits of two kinds of support.

Direct public support for institutions and direct public support for students. At the federal level in the U.S. we rely primarily on direct federal support for students who can then take that support to the institutions they choose who then compete to attract the best students.

We allocate federal financial aid funds in the way that we allocate federal research funds – on the basis of competition and peer review, not on other bases. And these judgments support the competition and drive our excellence.

Second lesson. American higher education depends on flexibility and the capacity to respond. Unlike what takes place in the primary and secondary level, there is in the U.S. no standard for what constitutes a necessary curriculum. No mandate as to how the academic calendar is to be organized. No set of requirements for what a university must provide.

There is a capacity for flexibility, and there is strong support for the kind of leadership that responds to changing conditions. The phenomenon that Dr. Ahluwalia referred to – of the concern of being able to move with sufficient flexibility and activity – is not absent in academic life. But the culture of American private institutions, in which leaders are selected not by members of the faculty or student body or staff, but by independent trustees, is a powerful spur to quality. And where we have run into trouble has increasingly been where government has not been able to resist the tendency to start to run universities in ways that are too much like the way they run departments of motor vehicles. Success depends on flexibility. That means for example that at Harvard and other great universities there are no fixed salary scales. When an extraordinary professor gets an extraordinary opportunity, we are in a position to change her salary. People of different ages or in different fields, because of conditions in the marketplace, have salaries that can differ by a factor of two or three. Students who want to change their curriculum or forge a major that cuts across two different fields are permitted to do so. The emphasis is on flexibility.

Third lesson of the American experience. Universities must be places based on the authority of ideas, rather than the idea of authority. Let me tell you a story. One of the things that I have enjoyed doing most during my time as president of the University is teaching a freshman seminar. And I meet each week with 15 students and offer them a seminar on issues related to globalization.

Two years ago, in about week five of the seminar, I asked the students to read the honored lecture that I had given to the American Economics Association several years before about global capital flows. And as was absolutely common as I did each week, I asked one of the students to introduce the reading by giving his reaction to the reading. And this 18-and-a-half year-old in his fifth week at Harvard said something like the following: “And then there was the lecture by President Summers – it was kind of interesting but the data did not really prove the conclusions.”

And I stopped him and I said, you know, in a moment I am going to argue that the data actually do prove the conclusions a little more than you suggest, but this is really a remarkable and a wonderful thing and it wouldn’t happen in very many places that someone who has been here for all of five weeks would tell the guy who had the title “President” – who had been in charge of this stuff for his country – that he was all wrong and that he had thought about it and that is what he concluded. And that nobody would regard it as a big deal. And that is something that is absolutely central to the success of academic life. There is no question that should be impossible to ask, no subject that should be beyond the scope of inquiry, no issue that should be regarded as finally settled, and no one who should be above or beyond debate. That is a culture, that is an approach, that is a view that is very difficult to maintain in any institution, anywhere. And yet for the most creative ideas to come out, for students to be best trained, it is something that is absolutely essential. And it is something that we fight at Harvard to preserve.

Fourth Lesson. For all of this to work, there must be generous philanthropy. Our ability to maintain an institution like Harvard, the United States’ ability to maintain a system of private higher education, depends on philanthropy. It depends on wealthy individuals who recognize their obligation to an institution that gave them their start, or to giving something back to society, or to promoting a cause that they believe in. It depends on a government’s set of policies, ranging from tax deductions to an attitude taken by public officials that celebrates and welcomes, and is unthreatened by, individual generosity. It depends on harnessing the fact that people like to be recognized for their success – by being prepared to name professorships and scholarships and buildings for those who provide generosity.

Sugata was introduced as the Gardiner Professor of History at Harvard. I know nothing about the situation, except with a very high degree of confidence I know one thing and that is at some point there was a Mr. (or Mrs.) Gardiner who made a generous contribution to Harvard University that Harvard University has recognized by labeling Professor Bose’s position as the Gardiner Professor of History. No one will succeed in establishing a system of private higher education that does not accept and welcome philanthropy.

That is a challenge for would-be philanthropists in this country, where I note the number of those included in Forbes magazine’s list of billionaires has increased substantially in recent years, but it is also a broader challenge for institutions to learn to work with philanthropists.

My final observation. Successful universities focus on research and on professional education as well as on undergraduate study. Some of the greatest contributions that American universities have made are in the upgrading of the medical profession and in the training of the legal profession. They increasingly, and this is something that I put great emphasis on during my time at Harvard, strengthen the contribution that universities make to professions that are absolutely central to our global system, but that do not involve the largest financial rewards for those who go into them. Professions like public health, like government service, education. That is why I am so excited while I am here to support Dean Barry Bloom and Business School alumni leader Rajat Gupta in their efforts to work with the Gates Foundation with the government in India to support and develop a network of public health schools here at a time when the field of public health, I believe, is of profound importance and the right kinds of institutions like public health schools can make a great difference to the broader society.

At the same time, we need to recognize that universities have as their objective not just training students, but providing new knowledge. One of the reasons why I thought the South Asian Initiative that Professor Bose is leading is so very important is that as I look at the United States today, I do not think that there has been a moment when we have both so misunderstood the world and been so misunderstood by the world. Part of that is an obligation of our education system to address in the way we train students. But part of it is the obligation of institutions like Harvard to promote the kind of understanding of societies all over the world that can ultimately lead to a more enlightened approach by American institutions and by the American government. I guess the students that Professor Bose trained are very important. The courses that Professor Bose offers are very important, but actually in selecting Professor Bose to be a member of the Harvard faculty we place an equal or greater emphasis on his capacity to contribute to human understanding, through his research and through his writing. And so, as universities contemplate their role, they must also recognize the broad contribution that their faculty makes beyond the training of students – to their professions and to the broader area of knowledge.

My third broad topic, and this will be a briefer one.

Education as an export. I was struck earlier on my trip here, and it was not something I had known about, but what I learned about medical exports from India – the number of people who come here to be treated in one way or another in your medical facilities. And I thought about the implications for higher education. This is an important issue for the United States. Last year, we played host to 565,000 students from the rest of the world. And if you take no account of any multiplier effect from the spending they engaged in while they were in the United States, they contributed some $13 billion to the American higher education sector. And so it seemed natural to me to ask the question, what was India’s record in this regard? I asked the question because it seems to me with the number of outstanding institutions of higher education, with a language that is in common with the United States, with a national experience that is likely to be so defining of the way the global system evolves in the 21st century, that India should and can be a magnet for American students and students from abroad more generally. What I learned was that of 191,000 American university students who traveled abroad last year, just 1,157, a little bit less than one percent, about half a percent, traveled to India. Despite speaking English, despite having a population 50 times that of Australia and New Zealand, India attracts less than one-tenth of students who choose to study abroad in Australia and New Zealand. If one makes the comparison with other countries that do not have the obvious advantage of being able to offer instruction in English, India attracts only half as many American students as the Czech Republic and twice as many as Hungary. I would suggest that there is a major opportunity here for Indian higher education. Potential benefits to the Indian economy of developing it as an export are obvious. But there are more fundamental benefits as well. First, if my own experience is any guide, foreigners that come and spend any time in India will want to come back. They will tell their friends about the beauty of India and the warmth of India’s people and many will decide to come back later in life and to visit. Second, foreigners who study here will inevitably make long-lasting connections with their India counterparts. They will forge lifelong relationships that over time will change the attitudes of our nation and other nations towards India.

I can tell you that no small part of the influence and strength that the United States has in conducting its global policies over the last few years has derived from the thinking about America that has come from those who spent six months or a year or two years in American universities. It is something that any rising super power should consider.

Third, there are remarkable economic opportunities in this country, and those who come here and study them will see those opportunities and be more likely to exploit them to their benefit, and, I would suggest, to the benefit of the Indian economy. There will be those I am sure who will respond to this suggestion by saying that India’s universities are already full and that there is not enough university capacity in India even to serve those in India who need higher education without setting aside spaces for foreigners. There are those who will argue that at a time when many thousands of Indians are traveling to the United States, should we be trying to keep them in India rather than recruit foreign students? My response is a simple one and it is the basis of economics. By attracting tuition dollars and euros, by attracting the money that foreign students will inevitably spend on housing and other living expenses, Indian institutions can potentially develop a new and reliable stream of revenue that will support their domestic expansion and enable them to teach more rather than fewer Indian students. I have no doubt that by welcoming more students from abroad, India can accommodate more students from home.

Let me conclude by again congratulating the organizers of this conference. When the history of this period in India’s life and in our global life is written some decades from now, there will be much that will go into it. But I suspect that the products of universities – the ideas, the formative experiences for those who will go on to lead our societies, ideas that will go from being exotic bits of esoterica to conventional wisdom as they always have – will be a large part of that history. And so, the decisions that your country makes, the decisions that you make regarding your universities and your system of higher education, will be of the greatest importance, significance, and, I believe, positive influence for India’s future and for the world’s.