Twelve years ago, in 2008, it was clear that the labor arbitrage–based IT services industry that had made India a player in the global technology market was facing a threat. The key issue was supply-demand equilibrium. India’s engineering education system simply could not keep up with the demand for talent.
Engineering schools below the top tier (IIT, IISC, and a few others) were struggling due to lack of faculty. Anyone who knew any engineering had multiple multinational companies dangling job offers in front of their nose. Why would they go teach in a small engineering college in a small town?
Against that backdrop, we started a for-profit private company to train engineers in India.
At the time, Susan Hockfield was the president of Massachusetts Institute of Technology (MIT). MIT had also taken a leadership role in the Open Course Ware (OCW) movement, systematically putting every lecture by the institute’s faculty online, freely accessible from anywhere in the world.
We convinced Dr. Hockfield to take equity in the company on behalf of MIT, and let us do the project under the MIT India brand, extensively leveraging OCW content. We could, however, grant only certificates, not MIT degrees.
When we launched MIT India in 2010, we were handsomely financed by contracts from Intel, Infosys, Cadence, Autodesk, Tata Motors and IBM, and raised hardly any outside financing until much later, when we were ready to scale. In addition, companies like Cadence and Autodesk donated CAD tools which our engineering students could learn with.
Our model was simple. We worked directly with major corporations interested in hiring trained engineers. Our customers, thus, were the companies, not the students or parents.
To the youth of India, however, we brought a different value proposition. We carefully recruited a set of high potential students who had only a high school education but who were not going onto great colleges or universities. These students, upon acceptance into the MIT India program, were already guaranteed a job at the sponsor company, for which we were training them. They participated in a rigorous curriculum focused on the engineering discipline of the sponsor’s choice. For example, Tata Motors, had us train mechanical engineers, while Intel had us train chip designers.
We had six centers in our first year of 500 students each, aligned with one of our sponsors. They were geographically dispersed, and most certainly not in Bangalore, which was already bursting in its seams. IBM’s center was in Kolkata, Tata Motors’ was in Thane, Cadence and Autodesk were in Kanpur, Infosys was in Indore, and Intel was in Kharagpur.
We solved the faculty issue by recruiting a group of talented engineers who were passionate about teaching, and offered them market salary that they would normally get working for MNCs. And our faculty followed MIT syllabus, OCW content, problem sets, exams, and so on.
As batches of students finished our two-year intensive program, we renewed our contracts with the sponsors, recruited new sponsors, and opened up new centers all over India. These contracts were extremely lucrative for us and allowed us to finance great infrastructure, afford and attract faculty, and address the engineering education crisis that India would have otherwise faced had we tried to work within the government-approved channels.
We made a few key strategic choices that made it possible for us to build the $6 billion a year company that we have today with 1,200 MIT India centers, each teaching two batches of 500 students. Each year, we train a total of 600,000 engineers.
First, we framed the engineering education problem as a problem of the corporations who need to recruit talent and asked that they pay for a quality solution. They did.
Second, we did not allow compensation to be a deterrent for hiring talented faculty. We paid them handsomely, such that they did not feel they were making a career sacrifice by teaching. This enabled those with passion for teaching to choose an academic career.
Third, we chose to do this under the MIT brand umbrella, gaining instant credibility among the sponsors, the faculty and the students.
With that, we created one of the most powerful engineering workforces in the world.
A call to Indian entrepreneurs everywhere, Vision India 2020 challenges and inspires readers to build the future now. In this “futuristic retrospective,” author Sramana Mitra shows how over the next decade, start-up companies in India could be turned into billion-dollar enterprises. Vision India 2020, which encompasses a wide range of sectors from technology to infrastructure, healthcare to education, environmental issues to entertainment, proves how even the most sizeable problems can be solved by exercising bold, ambitious measures. Renowned in the business world, author Sramana Mitra conceived Vision India 2020 from her years of experience as a Silicon Valley strategy consultant and entrepreneur. Well aware of the challenges facing today’s aspiring entrepreneurs, Mitra provides strategies, business models, references, and comparables as a guide to help entrepreneurs manifest their own world-changing ideas.
This segment is a part in the series : Vision India 2020