INDIA'S WHIZ KIDS (int'l edition)
Inside the Indian Institutes of Technology's star factory
Victor J. Menezes,
the 49-year-old newly appointed co-CEO at
Citigroup's corporate
and investment banking branch, vividly
remembers his
grueling college years in India--and Professor
M.S. Kamath's
electrical engineering class in particular.
Menezes recalls
Kamath as ''the most dreaded professor'' on
campus 30 years
ago at the Indian Institute of
Technology-Bombay.
His class was the hardest to get into.
And once in, students
wondered what hit them. Kamath's
grading system
was a punch in the nose for students who
fancied themselves
as the best and brightest in India. Often,
only one student
per test got an A--the top scorer. The
second-best score
got a B. Everyone else got Cs, Ds, or Fs.
But Kamath had
his reasons. Now retired and living outside
Bombay, he brushes
off his legendary reputation as a campus
terror: ''I used
to tell my students, 'IIT is a center of
excellence. I
don't want you to be third-rate products.'''
Far from it. Some
of the most prominent chief executives,
presidents, entrepreneurs,
and inventors in the world are
graduates of
IIT, India's elite institution of higher
learning. Its
impossibly high standards, compelling the
mostly male student
body to average fewer than five hours of
sleep a night,
produce numerate graduates who are masters at
problem-solving.
Familiar with Western ways due to India's
colonial past,
they have spent their academic years studying
in English, which
gives them an edge over other Asians
competing for
jobs in global corporations.
While IIT has
been producing talented engineers, scientists,
and managers
for four decades, the school has taken on a new
prominence lately.
With Menezes' ascension at Citigroup on
Nov. 1 and the
appointment of 45-year-old Rakesh Gangwal as
US Airways Group's
new CEO on Nov. 18, IIT counts two more
alums among the
highest ranks of global business. They join
Rajat Gupta,
who has led McKinsey & Co. for four years, Vinod
Khosla, the co-founder
of Sun Microsystems Inc., and hundreds
of others now
working in the top ranks of U.S. corporations
and Silicon Valley
powerhouses. (BUSINESS WEEK has an IIT
connection. Graduate
Vasant Prabhu is president of the
Information and
Media Services unit of The McGraw-Hill
Companies, BUSINESS
WEEK's parent.)
FORMER PRISON.
Wall Street firms rely on Institute grads to
devise the complex
algorithms behind their derivatives
strategies while
big multinationals call on them to solve
problems in new
ways. When recruiting from colleges for its
annual crop of
consultants, McKinsey hires a significant
number of the
school's graduates every year. Many more write
the software
and design the chips and peripherals that
Silicon Valley
sells to the world. One example: The founders
of Internet browser
Junglee.com--all IIT grads--made fortunes
in August by
selling their company to Amazon.com, the online
bookseller, for
$180 million.
The rise of IITians,
as they are known, is a telling example
of how global
capitalism works today. The best companies draw
on the best brains
from around the world, and the result is a
global class
of worker: the highly educated, intensely
ambitious college
grad who seeks out a challenging career,
even if it is
thousands of miles from home. By rising to the
top of Corporate
America, these alumni lead all other Asians
in their ability
to reach the upper echelons of world-class
companies.
It's not just
that entrepreneurs have forged a path through
high-tech arenas;
corporate executives have proven proficient
at managing companies,
too. Cost-cutting by US Airways'
Gangwal, for
example, helped pull the airline back from the
brink of bankruptcy
and increased revenues fourfold.
In that regard,
the story of these Indians provides a model
for other Asians
to emulate--and an example for U.S.
companies and
universities to ponder. For India has created,
out of limited
resources, a class of executives and
entrepreneurs
who manage to combine technical brilliance with
great management
skills. And the Indian government, to its
credit, has not
tried to keep these first-class students at
home. In many
ways, the IIT grad is the hottest export India
has ever produced.
To mold them,
the schools put these 18-year-olds through an
experience akin
to boot camp. Theories learned by rote--a key
element of Japanese
education--are only part of the
experience. ''Students
should see the problem and conjure up
a solution, not
only memorize a theory,'' says Deepak Phatak,
professor of
computer science at IIT-Bombay. The focus is on
hands-on learning.
IIT maintains workshops where students
even learn how
to make machine tools and operate rotation
motors, the kinds
of crafts relegated to trade schools in the
U.S.
When he helped
found IIT in 1951, Jawaharlal Nehru, India's
first Prime Minister,
wanted an elite that could build the
great state-sponsored
power plants, dams, and bridges so
badly needed
in the newly independent country. The planners
drew on Massachusetts
Institute of Technology as a Model and
on UNESCO for
funds to build the first campus, in Kharagpur,
near Calcutta,
in a former British prison for Indian
political detainees.
Five other campuses followed, in Kanpur,
Delhi, Bombay,
Madras, and most recently, Guwahati. At
various times,
the U.S., Britain, the former Soviet Union,
and Germany have
all provided backing.
FREE REIN. The
schools have kept their edge by staying out of
India's partisan
politics. ''It is the most uncorrupt
institution in
India today,'' says Kartik Kilachand, a New
York-based consultant
and IIT alumnus. IIT has an autonomous
board that doesn't
have to kowtow to state bureaucracies. The
Indian government
pays most of the $3,000 it costs annually
to educate each
student. Famous alumni in India include B.K.
Syngal, chairman
of Reliance Telecom, Nirmal Jain, managing
director of Tata
Infotech, N.R. Narayanamurthy, founder of
software developer
Infosys, and Yogi Deveshwar, CEO of Indian
Tobacco.
IIT's huge campuses
are vastly superior to other Indian
universities
but spartan compared with Western counterparts.
Many of the faculty
have U.S. degrees and are stars in their
fields, such
as V. Rajaraman, who has helped New Delhi
formulate its
software policy. Professors double as
administrators,
limiting India's notorious bureaucratic
malaise.
More than 100,000
Indians aspire to enter IIT each year,
sitting for the
grueling entrance exams every May. Students
typically spend
two years in preparation. Of those, just
2,500 are admitted
to the network of campuses. Fewer than
2,000 make it
to graduation each year. ''The process of
selection is
absolutely draconian,'' says McKinsey head
Gupta.
Once in, it gets
tougher. Aman Parhar, 22, a biochemistry
major at IIT-Delhi,
was a high school star. ''But here,
everyone is as
smart or smarter than you are,'' he says.
Textbooks are
so expensive that an entire class of 25 often
has to share
a single book. Students routinely stay up until
3 a.m. to study--or,
in IIT lingo, ''mug.'' But they get
plenty of attention.
Faculty-student ratios, at 1:6 or 1:8,
are among the
world's lowest. MIT's is 1:11.
TECHNOBRATS? Tales
abound of the secrecy and ritual of IIT's
dorm life. Students
have their own exclusive slang, where
''crack'' means
a job well done, and ''fundoo,''("it should read funda's) short
for
''fundamental,''
means great. The jobs and salaries grads
command make
them highly prized in India's contractual
marriage market.
While some of
the swagger gets beaten out of them by the
rigors of the
system, these students retain high expectations
for their careers.
Below the surface of being ''well mannered
and polite,''
according to Rukmini Bhaya Nair's book on IIT,
Technobrat, students
are ''ruthlessly competitive and have an
annoying complacency
at having 'arrived' at age 19.''
This attitude
often leads to disappointment with the
opportunities
India has to offer. Thousands of graduates have
emigrated to
the U.S., causing the Indian government anxiety
over the brain
drain of its brightest. A full 30% of the
graduating class--over
500 students--headed to the U.S. for
graduate degrees
and better job opportunities in 1998. In the
more popular
computer-science programs, nearly 80% leave for
Silicon Valley.
So routine is the exodus that at IIT-Madras,
the local campus
postman and bank clerk provide unsolicited
advice on the
best U.S. schools to attend. When acceptance
letters arrive,
the postman waits outside the student's door
for a tip--a
large one if it's from a highly regarded
university such
as Stanford. While IIT does offer graduate
programs, students
know that an advanced degree from a U.S.
institution is
the entry ticket to an American or global
corporation--and
big bucks.
The U.S. also
benefits enormously from the influx. AnnaLee
Saxenian, an
associate professor at the University of
California at
Berkeley, recently conducted a study of Silicon
Valley's new
immigrant entrepreneurs. According to Saxenian,
of an estimated
2,000 startups in Silicon Valley, 40% are
Indian-spawned,
and of those, half are by IIT grads.
The influx began
in earnest in the 1970s as Indian students
graduated from
such schools as Stanford, MIT, and Carnegie
Mellon and became
a vital source of brainpower in the
research labs
of Hewlett-Packard, Intel, IBM, and Texas
Instruments.
They then played founding roles in Sun
Microsystems,
Cirrus Logic, and numerous other high-tech
powers.
Yogen Dalal, an
IIT alumnus and partner with prominent
venture-capital
firm Mayfield, says the Valley has ''a
critical mass
of IIT alums who can finance and guide the new
generation.''
Suhas Patil, who founded chip design innovator
Cirrus Logic
in 1984, is now a prominent ''angel'' investor
who provides
early capital and business connections for
Indian-owned
startups. Another angel is Kanwal Rekhi, who
founded and sold
add-on board maker Excelan and who served as
chief technology
officer for Novell Inc. Among the dozen or
so startups Rekhi
helped launch are Ambit Design Systems, a
developer of
chip-design software, and info-tech consulting
firm CyberMedia.
SCHOOLYARD LESSONS.
U.S. graduate schools actively seek out
the institute's
grads. California Institute of Technology
''writes to us
regularly, asking us to recommend students for
scholarships
they have available,'' says Kharagpur campus
Professor Badriprasad
Gupta, who is vice-chairman of the
entrance-exam
committee. Amitabha Ghosh, director of
IIT-Kharagpur,
recalls the dean of the University of Maryland
at College Park,
entreating him to ''send his entire
graduating class
to Maryland'' and promising them all
financial assistance.
Even the French and German governments,
faced with declining
numbers of engineers, are trying to
attract grads
through exchange programs. IIT graduates
frequently find
U.S. graduate schools a breeze by comparison.
India's math-focused
education gives students a leg up on
American students,
who depend heavily on calculators in the
learning process.
India has a long tradition of conceptual
mathematics,
and schoolchildren are forced to master
multiplication
tables early on. The math advantage helps:
Gangwal of US
Airways, renowned in the aviation industry for
his speedy mental
calculations, says ''people always pegged
me as being this
terribly analytical guy who can run numbers
in his head.''
Yet it was Gangwal's number-crunching that
helped cut through
the morass at the airline.
Another factor
of campus life is India's diversity of
languages, ethnic
groups, and castes. ''You learn how to
manage across
them,'' says Citigroup's Menezes, who managed
to thrive in
Citibank's cutthroat environment. ''You couldn't
survive any Indian
schoolyard unless you figured out how
different people
think and behave.''
Recently, IIT
grads in the U.S. have been formalizing their
powerful network.
Two years ago, Indians and Pakistanis in
the San Francisco
area formed The Indus Entrepreneurs. Easily
half its 1,000
members are IIT grads. ''We help each other
and provide role
models,'' says Desh Deshpande, an IIT-Madras
alumnus whose
computer-networking company, Cascade, recently
was sold to Ascend
Communications Inc. for $3.7 billion.
Now that they
have the means, alums also want to help their
alma mater. Rekhi
last year donated $2 million to the school
and urged fellow
alumni to follow suit. Says Mayfield's
Dalal, who has
given $10,000 to kick off an alumni-sponsored
endowment fund:
''We want to make it right for the next
generation.''
GOVERNMENT CUTBACKS.
Their help could not have come at a
better time.
New Delhi has been reducing funding to
institutions
of higher learning such as the IITs by 25% since
1993. Alumni
help is taking its place: Vinod Gupta, for
example, founder
of Nebraska-based database American Business
Information,
recently built a $3 million school of management
for IIT-Kharagpur.
McKinsey's Gupta is active in setting up a
business school
to open in 2001 in India, in conjunction with
the Wharton School
at the University of Pennsylvania and
Northwestern
University's Kellogg School.
The IITs have
also been teaming up with industry on
development.
IIT-Kharagpur patents a dozen new products each
year. Companies
such as Intel and Philips Electronics, which
are big recruiters
at the IITs, have funded endowments and
scholarships.
They have even bankrolled computer and
electronics laboratories
in order to keep IIT grads up to
snuff on the
latest technology.
The bottom line
for students and grads is that India has
produced a world-class
university at surprisingly little
cost. By nurturing
the schools, the government stands to reap
huge rewards
as these grads invest in India and draw it
further into
the circle of global trade and prosperity. Much
like Taiwan-born
engineers in the U.S., IIT grads are well
positioned to
set up ventures in their native country.
''These Indians
will play a key role in the resurgence of
India,'' says
Vijay Sahni, country head for Arthur Andersen's
India operations.
It's not quite how Nehru thought it would
be. But this
school is vital to India's place in the world.
By Manjeet Kripalani
in Bombay, with Pete Engardio and Leah
Nathans Spiro
in New York and bureau reports
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Updated Nov. 25, 1998 by bwwebmaster
Copyright 1998, by The McGraw-Hill Companies
Inc. All rights reserved.