Academy-Industry Cooperation: Towards a New Convenant for Indian Business Competitiveness

Abstract

The role that knowledge plays in competitiveness in the market place, has increased dramatically over the last two decades. This has been arguably one of the most significant economic trends of the late 20th century - a process linked closely with the rapid internationalization of business and finance, and the emerging dominance of knowledge-intensive companies in the global economy. In India, the business leadership has now recognized the need for knowledge, mainly because the economic liberalization policies of the 1990s have exposed Indian companies to the threat of competition. The competitiveness-enhancing knowledge that business firms require is mainly of two types - organizational and technological. The first category of knowledge is that embodied in managerial, organizational and strategic skills, while the other is technological knowledge. On both these dimensions, Indian companies find themselves confronted by the need to change, in order to adapt better to the altered rules of the game. From where will Indian companies source their new requirements of knowledge? By virtue of their charter and mission, the activities of Indian management institutes or institutes of technology are dominated by an applied orientation. Hence, one may expect that such institutions are most likely to be prepared to meet this need. Does it then make sense for Indian business organizations and such academic institutions in India to forge mutually beneficial cooperative arrangements? Answers to these questions, focusing on management institutes, are explored in this paper.As far as Indian academic institutions dealing with management and technology are concerned, they too are confronting a vastly changed scenario, and are reorienting their focus of activity. Increased costs, together with constrained support from the government, have made these institutions much more attuned to market demands. Their response to the changed situation is reflected in the pattern of their teaching, research and training activities. In the leading management institutes for example, there has been a conscious effort to increase market relevance via more and varied executive training programmes. The quality of their core post- graduate (MBA level) degree/diploma programmes is increasingly Professor of Economics & Social Sciences, Indian Institute of Management Bangalore judged, internally and externally, by the salaries that their graduates command in the job market. Many management institutes have sought, in other ways as well, to move closer to business and industry. This trend is exemplified by the presence of leading industrialists on campuses, as guest speakers and more prominently, as Chairmen of the governing boards of these institutions. From these synergic trends, one may be tempted to conclude that the pattern and prospects of cooperation between Indian business and management academia are on an optimal trajectory. As we argue below, such a conclusion is unwarranted. Much more progress needs to be made, if the full potential of mutual gains is to be realized. To assess the trends in terms of their significance and long term implications, it is necessary to examine this issue from a strategic perspective. The context is given by the twin processes of liberalization and globalization, and we need to ask in what way the institutional objectives of business and academic organizations can be served by deeper levels of cooperation. This is attempted in this paper. The remainder of the paper is organized as follows: The next section takes the question of why academy and industry should cooperate. The discussion in the section is in two parts. Part I examines the industry perspective with particular reference to its current demand for knowledge. Part II considers the issue in relation to the need for strategic knowledge. It focuses on the knowledge that management institutions currently provide to industry. It goes on to examine how the present may change towards greater collaboration. The paper ends with a brief conclusion.