University Bytes

Prof. Krishnamurthy V. Subramanian

Professor of Finance, Indian School of Business

17th Chief Economic Adviser, Government of India
Former Executive Director, International Monetary Fund

1. India has traditionally viewed universities as centres of education. As India aspires to become a developed economy by 2047, should universities instead be recognised as strategic economic institutions that create productivity, innovation, entrepreneurship, and national competitiveness? What policy shifts would accelerate this transformation?

Absolutely. Universities are not merely part of the education system; they are part of the economic infrastructure of a nation.


India@100 is fundamentally a story about productivity. To become a developed economy by 2047, we cannot simply add more labour and capital. We need to become dramatically more productive. Universities can drive that transformation through human capital, research, innovation, entrepreneurship and better managerial capabilities.


But for this to happen, every university must develop a unique competitive advantage, which comes from differentiation. We should not try to make every university a smaller version of every other university. Each institution should identify where it can become genuinely exceptional and build its faculty, curriculum, research and partnerships around that advantage.


Research should also have a distinctly Indian ambition. I would describe it as I-3 research: solving Indian problems at India scale at Indian price points. India has problems of enormous scale, and finding solutions that are affordable at Indian price points can generate knowledge and innovations that are valuable across the Global South, and often globally.


The policy shift required is therefore greater autonomy, competition and accountability. Give universities freedom over people, programmes, research and partnerships, but hold them accountable for outcomes. Excellence cannot be created through uniform rules.


2. India possesses one of the world’s largest youth populations. What will differentiate countries that merely have a demographic dividend from those that successfully convert it into sustained economic leadership? What role should universities play in creating that competitive advantage?

A demographic dividend is not a dividend that automatically arrives because a country has young people. It is an opportunity that has to be converted into productivity.


The difference between countries that succeed and those that do not is whether their young population becomes a highly productive population. That requires human capital, jobs, entrepreneurship, infrastructure and institutions that enable people to realise their potential.


Universities have a particularly important role because they should create capability, not merely credentials. Students need analytical reasoning, communication, creativity, technological fluency, problem-solving and, above all, judgment.


But there is another role that I think is underappreciated. Universities must give young people credible optimism.


For anything good to happen, credible optimism is necessary. For anything negative to happen, even flimsy pessimism is sufficient. A young person who believes that the future can be better is willing to invest, experiment, take risks and build. A young person who believes the future is hopeless will not.


So universities must not merely prepare students for the economy that exists. They must give students the capabilities and the confidence to build the economy that should exist.


3. Artificial Intelligence is transforming industries faster than traditional education systems can adapt. Beyond integrating AI into classrooms, how should universities fundamentally redesign learning?

AI changes the economics of knowledge. Knowledge is becoming abundant and increasingly inexpensive. Therefore, universities cannot continue to compete primarily on transmitting information.


The scarce capabilities will increasingly be judgment, creativity, critical thinking and adaptability.


I would therefore redesign education around four things: thinking, creating, deciding and adapting.


Fundamentals actually become more important in an AI world. If AI gives you ten answers, the advantage lies in knowing which one is correct, what assumptions lie behind it and what question should have been asked in the first place.


Education should therefore become much more experiential: projects, cases, research, entrepreneurship and real-world problem solving, with AI as an amplifier rather than a substitute for thinking.


And universities must become lifelong-learning institutions. A four-year degree cannot be expected to remain sufficient when technology can transform an occupation in four years.


Most importantly, students need credible optimism about AI. We should teach them not to fear that AI will replace them, but to become the people who know how to use AI to create vastly more value.


4. Universities often invest significant effort in improving global rankings. While rankings matter, how should institutions balance international reputation with solving India’s most pressing economic and societal challenges? Can these objectives reinforce rather than compete with one another?

Yes, but only if rankings remain a measure of excellence rather than the objective being optimised.


There is also a more fundamental problem: whenever a metric becomes high-stakes, people eventually learn to game it.


For example, if universities artificially generate citations by encouraging students or researchers to cite working papers produced by their own faculty, the institution may appear to have greater research impact without actually producing greater external intellectual influence.


I would therefore look at what I would call an External Citation Ratio: the share of an institution’s citations that come from genuinely independent external researchers, after excluding self-citations, institutional citations and tightly connected citation networks.


A more sophisticated version would compare:


External citations ÷ total citations


with the institution’s field-adjusted global peers. A university with very high overall citations but an unusually low external-citation share should trigger scrutiny. One could also examine citation concentration: how much of an institution’s citation count comes from a small network of papers, faculty or affiliated authors.


This is not proof of gaming; it is a diagnostic for citation inflation. The broader principle is important: universities should be rewarded for genuine intellectual influence, not for learning how to optimise a ranking formula.


And India’s research opportunity is enormous. Rather than merely chasing citations, we should ask: Did the research solve an important problem? Did it work at India scale? Was it affordable at an Indian price point?


That is how Indian universities can achieve global reputation through Indian relevance.


5. As global supply chains, research collaborations, and talent mobility are being reconfigured, India has a unique opportunity to emerge as a global higher education hub. What strategic priorities should universities and policymakers pursue?

India has a genuine window of opportunity, but becoming a global higher education hub requires us to compete globally, not merely expand domestically.


There are five priorities.


First, quality at scale. We need many more globally excellent institutions.


Second, global talent. Universities need the autonomy to recruit and retain outstanding faculty and attract international students.


Third, frontier research with Indian relevance. Areas such as AI, biotechnology, health, climate, energy, advanced manufacturing and public policy offer enormous opportunities.


Fourth, university-industry entrepreneurship ecosystems. Universities should create companies, technologies and intellectual property; not just graduates.


Fifth, I-3 research: solving problems at India scale and Indian price points. That can make India a knowledge hub not just for India, but for the entire Global South.


And there is an important strategic advantage India possesses: scale itself can become a research advantage. If we can solve difficult problems for 1.4 billion people at affordable prices, we are likely to have solved problems that matter to much of the world.


6. If you had the opportunity to introduce just one transformative reform in India’s higher education ecosystem - one capable of fundamentally improving the country’s long-term economic trajectory - what would it be, and why?

I would give universities substantially greater autonomy, accompanied by hard accountability for outcomes.


Higher education is fundamentally about people and ideas. Both are difficult to manage through centralised rules. Universities need the freedom to decide whom to hire, what to teach, what research to pursue, how to collaborate with industry and how to reward excellence.


But autonomy without accountability does not work either. The principle should therefore be simple:


Control inputs less; demand outcomes more.


Let universities compete. Let them develop their Unique Competitive Advantages. Let them compete for faculty, students, research funding, international students and entrepreneurs.


And then hold them accountable for what they actually produce.


If I had to reduce the reform to one sentence, it would be: replace permission with performance.


7. Many university leaders today are navigating unprecedented disruption - from AI and changing learner expectations to global competition and financial pressures. What advice would you offer Vice Chancellors and institutional leaders who aspire not merely to build successful universities, but to build institutions that meaningfully shape India’s future?

I would tell them: do not build the university that is optimal today; build the university that India will need ten or twenty years from now.


First, have a clear Unique Competitive Advantage. Every great institution stands for something distinctive.


Second, be relentlessly ambitious about quality. Mediocrity is not a viable strategy in a world where talent and ideas are increasingly global.


Third, embrace AI rather than defend the status quo. The question is not how to protect today’s model of education, but how to reinvent it for a world where knowledge is abundant.


Fourth, connect the university to the real economy. The best universities should be ecosystems connecting students, faculty, entrepreneurs, industry, government and society.


And finally, give young people credible optimism.


For anything good to happen, credible optimism is necessary; for anything negative to happen, even flimsy pessimism is sufficient. Universities therefore have a responsibility that goes beyond imparting knowledge. They shape how an entire generation thinks about its future.


A university should tell a young person, credibly: the future is not predetermined. You have the capability to shape it.


That, ultimately, is what a great university does. It does not merely prepare people for the future.


It gives them the knowledge, capability and optimism to create the future.