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In decades past, research & development in India was not really tied to the economy; an isolated industry didn't feel any need for it. Now, the integration of the Indian eco-nomy with the global economy has created a dependence on R&D for some segments. And in the future, its value will only increase as countries that have the ability to innovate will be better placed to compete in the global marketplace. Due to this changed scenario, there is a need to strengthen our R&D ecosystem. R&D is globally done in three types of organisations - universities, government-owned labs and company labs. The last is outside the purview of public policy (except perhaps fiscal incentives), but the first two are influenced a great deal by government policies and investment. Global experience tells us that out of the two, except for some focussed R&D related to defence, space etc, the efficiency and effectiveness of the university is higher. Most research output comes from there, and most of the Nobel prize winners work in academia. Furthermore, besides the direct R&D output, universities also produce PhDs and Masters who form the main resource pool for corporate as well as government research centres (and, of course, for the uni-versities themselves). Unless this university nucleus does well, it's not possible to build a strong R&D ecosystem in a nation. In the US - which has the most vibrant R&D ecosystem - the importance of universities was clearly articulated in a seminal report in the late 1940s by Vannevar Bush, which led to the creation of the National Science Foundation. Over the years, there has been a dramatic increase in federal funding to R&D in academia: of a total of $110 billion, academia gets the lion's share of more than 30%. In India, the critical importance of R&D in academia is not appreciated and investment is extremely inadequate. Of the central government expenditure on R&D, only about 5% goes to higher education, while government bodies get about 90%! This lack of funding is a key factor in even our good universities being teaching-only places, and the continued weakness of our R&D ecosystem. This must be remedied. Large investments in R&D in universities must be supplemented by methods that will push these organisations to excel. And the best way to do that is fostering competition. Consequently, the second area which needs reform is strengthening of competition at all levels in the R&D set-up. While it is known that competition gets the best out of business organisations, it is not fully appreciated that it is also extremely important for universities. In the US, competition has been built in at all levels. There is competition to get good students - all the main universities vie for them. There is strong competition to attract the best faculty - universities go out of their way to get good faculty and vigorously compete even with corporate research labs (incidentally, they often win this competition). And there is strong competition for research funding. Contrast this with the system in India. There is little competition for getting research funding - government labs simply get their funds while the number of academic institutions with the capability to truly conduct R&D is so small that there is no pressure. Now, with the emergence of corporate research labs in India, there is at least an emergence of external competition for recruiting faculty in some sectors. Competition among universities can be strengthened considerably by having independent and rigorous evaluation on a regular basis using a proper framework that compares Indian universities and their departments with each other, as well as with universities across the world. These evaluations (perhaps with rewards like government grants tied to them) will generate a sense of competition between the universities and, if done in a proper manner, can also provide universities with some directions for improvement. Establishing a centre like the Centre for Measuring University Performance in the US can be a major step in this direction. It should be clear that supporting a competitive spirit among universities will necessarily require them to have much more autonomy and control. An organisation cannot compete if it does not have basic tools like the ability to decide compensation, incentive structure, etc. Here, the argument that since the government provides most of the funding, it must exercise control, does not hold; universities in the US, Europe, Singapore, Australia etc are heavily funded by the government, yet they are very autonomous in deciding their salaries, their incentives and processes. It is essential that we build a large and vibrant R&D ecosystem in the country. This requires universities to be at the epicentre of that ecosystem - and that in turn requires a large number of research universities that are autonomous and well funded for R&D. It also requires that an independent and rigorous evaluation framework be built for assessing university performance, which will push them to compete and provide the much-needed drive for improvement. Malik is Arthur J Chick professor, University of California, Berkeley, and Jalote is director, IIIT-Delhi.

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