The Other MIT
Manipal Institute of Technology and other second-tier schools like it are India's real tech secrets

Rajendra Kumar Nayak considers himself a lucky guy. Sipping his favorite 60 cents milkshake at a trendy coffee shop in Manipal, India, he's rejoicing about the job he'll start soon, following his recent graduation from the Manipal Institute of Technology (MIT). Nayak will work as an industrial engineer at Wipro Fluid Power (WIT) in Bangalore for $390 a month -- a lucrative salary by Indian standards. But Nayak, 22, isn't simply lucky. He's gutsy and smart. The son of a steelworker, he gambled in 2001 by taking out a $7,000 loan and heading to Manipal. Four years later he's graduating first in his class. "MIT was expensive, but worth it," he says.

Nayak is an example of the breed of ambitious young engineers who will power the next phase of India's tech and industrial boom. And Manipal Institute of Technology is one of the leading Indian colleges educating this next generation. For decades the famed campuses of the Indian Institute of Technology were just about all the world knew of the country's technological genius. But lesser-known colleges such as MIT will be playing a key role as India continues on its fast-growth path. This second tier of some 2,240 engineering schools -- 55% of them public institutions, the others privately run -- aren't nearly as exclusive as the IITs, which snap up just 2% of the 200,000 candidates who take its demanding entrance exam every year. Graduates of IIT's seven campuses rarely top 3,000 annually. The second-tier institutes educate far more Indian engineers -- some 207,000 graduated in 2005 -- and fill an important need.

A YOUNG NATION 
To keep up its 30%-plus annual growth in tech services, India requires more than 65,000 newly graduated engineers a year, according to software trade body Nasscom. New Delhi's Institute of Applied Manpower Research figures the country also needs about 10,000 engineers annually to fuel growth in other industries, including autos, chemicals, construction, metals, and energy. Moreover, since 35% of India's 1 billion people are under age 15, national demand for everything from roads to power grids to PCs will skyrocket, making the need for engineering skills urgent. Nasscom predicts enrollment in Indian tech schools will jump by 70%, to 600,000, by 2008.

Of the second-tier institutions, MIT is one of the most prestigious. It's part of a sprawling network of 53 private professional colleges called the Manipal Academy of Higher Education, located on India's southwestern coast. Founded in 1953 as a medical school by Dr. Tonse Madhava Anantha Pai, the academy trains its 30,000-strong student body in everything from hotel management to software development. "We have to give our people skills if India is to be a global power. We can't depend on the government alone to do that," says Ramdas Madhav Pai, the academy's chancellor and the son of its founder.

Like other top-notch engineering schools such as PSG College of Engineering in Tamil Nadu and Pune Institute of Advanced Technologies, MIT goes out of its way to ensure that graduates are prepared to move straight into jobs. Companies such as Motorola Inc. (MOT) and network-storage outfit EMC Corp. (EMC) often recruit Manipal students in the final weeks of their penultimate year. Once a student accepts an offer, the college creates final-year electives geared to his or her prospective job.

Infosys (INFY), Tata Consultancy, Wipro, and Satyam Computer Services, (SAY)which together hired more than 40,000 engineers in 2004, take such cooperation a step further. They provide course material and train lecturers on developments in areas such as chip design, radio frequency identification, and network management. The collaboration pays off in shorter in-house training once graduates become employees. "We've brought down our training program to 52 days today from 76 days three years ago," says S. Ramadorai, chief executive of Tata Consultancy.

Although it's not as exclusive as IIT, Manipal is not easy to get into. Some 12,000 candidates applied for the 600 seats up for grabs last year. Compared with subsidized "IIT-ians," who cost the federal government $18,500 each by the time they complete their four-year degree, MIT students must pay $9,000 tuition for four years. That can be tough in India, where a typical urban middle-class household earns $800 monthly. With some 100,000 Indians heading to the country's 975 private engineering colleges, the student loan market is beginning to show signs of life. A 2005 mechanical engineering graduate from PSG College, Ramu Lakkumanan, is the fourth child of a paddy farmer in coastal Tamil Nadu. He took out a $700 loan to ease finances at home. The first graduate in his family, he is training to join Tata Consultancy.

Manipal Academy's Pai is striving to give students value for their money. His goal is to build an IIT-like campus that would cost students a fraction of what an IIT education costs the government. Currently the institute is working on a project to build a $7.6 million innovation and incubation center to house labs of Hewlett-Packard (HPQ), Philips Electronics (PHG), EMC, and Infosys. All told, Manipal Academy is investing $23 million over three years in new facilities. Part of the funds for expansion come from the Academy's 9,000 foreign students, who pay two to four times what Indians pay.

Other private institutions are experimenting too. At PSG College, the faculty is planning a new "play-and-learn" approach, in which classes are broken into 20 minutes of lecture and 30 minutes of hands-on training. "To simulate real-life situations, we want students to meet customers, and [we want] faculty to spend two summer months with companies to solve their problems," says P.V. Mohanram, dean of PSG's mechanical engineering department.

India needs more cutting-edge educational institutions if it is to keep advancing as a technology-service provider and make the big shift to high-value manufacturing for global companies. Experts worry that only a third of India's second-tier engineering institutes provide an education that meets the benchmarks of major global corporations, forcing employers to spend big bucks training fresh graduates. One reason is underpaid faculty. A professor with 15 years' teaching experience in a second-tier engineering school takes home $575 a month, less than one-eighth the salary of a software designer with similar experience. "The divergence between industry and academia is getting so acute that faculty recruitment is getting extremely tough," says S. Vijayarangan, principal of PSG.

All these issues explain why India must keep striving to raise its engineering education standards. One way to do that would be to encourage more cooperation between the IITs and other institutions. A first experiment in such collaboration -- between three local colleges and IIT Bombay -- will begin soon in Maharashtra. The colleges will follow the IIT syllabus and work together on research projects. "India needs 10 times more graduates of IIT quality. Only then will we be globally competitive," says P. Rama Rao, a former vice-chancellor of Hyderabad University. Rao is coordinating the project and pushing bureaucrats to replicate the model with IITs and colleges in Madras, Kharagpur, New Delhi, and Kanpur. If such efforts succeed, India's brainpower is likely to keep surprising the world.

By Josey Puliyenthuruthel