A lot has been written in the press lately about the Punjab government’s decision to provide land to the Indian School of Business (ISB) for its second campus at Mohali. Some of the arguments and general angst about the absence of a national land use policy are valid. The argument that public land must be put to the best public use is also completely understandable. Let us, therefore, understand why governments allot land for educational use and why educational institutions need large tracts of land in urban areas.
The role of any enlightened state government today is to attract industry, capital and create employment, growth and prosperity in the state. Many state governments — Andhra Pradesh, Gujarat, Punjab and Tamil Nadu in particular — are encouraging large employers to set up establishments in their states. These employers also need strong supporting infrastructure, like healthcare, education, entertainment to make their companies successful. Apart from attracting investments, governments have also begun to realise the social benefits of having high-quality educational institutions, since they act as a hub for attracting other talent-driven industries. That has been amply borne out by the ISB’s campus at Gachibowli, Hyderabad.
Twelve years ago when construction started on the Hyderabad campus, there was no industry within 5 km of the site. Today, about 100,000 professionals are employed on the one-mile stretch outside the campus. This, in turn, leads to a large amount of indirect employment in supporting services such as food, entertainment, schooling and medical care. Obviously, ISB is not directly responsible for this large job and societal wealth creation, but as with many educational centres across the world, the presence of a top-quality educational institution encourages many more companies to establish external economies. Boston, Stanford and Austin in the US, and Cambridge in the UK are examples of how great businesses have been built around educational institutions.
The Andhra Pradesh government has succeeded in attracting an Indian Institute of Information Technology, a new Indian Institute of Technology (IIT), the Indian Institute of Management, Ahmedabad (IIM-A) and some private educational institutions to make Hyderabad a major education hub to support the growing industry. The Punjab government is keen to replicate the same virtuous cycle by encouraging the creation of the 300-acre Knowledge City, where it is planning to locate not just ISB, but also an Institute of Science, one for nano-technology and another one for biotech, presumably all on the same basis of land allocation. All these institutions will create enormous synergies and benefit local industry.
Why do educational institutions need low-cost land? First, to clarify, ISB is not a commercial institution. It is a not-for-profit organisation for which all contributions made by donors, whether individuals or corporations, are philanthropic in nature. Any surplus is ploughed back into the institution and not a single rupee is distributed to any of the donors as a return on their “investment”. In that sense, ISB, like any other not-for-profit educational institution, is a “public purpose entity”. ISB has been provided 70 acres (not 100) of land on long lease (and not outright sale) by the Punjab government. The terms of the lease agreement prohibit ISB from financially benefiting in any way from the use of the land other than for educational and research purposes. In fact, in the best sense of a public-private collaboration, the government has also achieved its investment objective with the donors and ISB investing '250 crore for the development of the Mohali campus in Punjab in the next year or so.
The other important factor is that ISB is not a pure teaching institution. It is a research-driven institution and all the research that its faculty does is available in the public domain, free of cost. It does not do any privately sponsored research. Providing high-quality research infrastructure (databases, software, research manpower) requires funds which cannot be generated through fee income alone. The sustainability of a research-focused institution that does not “sell” its research output would be in serious jeopardy if it also had to spend large sums of money on acquiring land in the first place. That is why a public-private partnership makes a lot of sense — with the government contributing the land and private donors the funds for building infrastructure and hiring high-quality faculty.
ISB’s research is not conducted for solely for the benefit of industry. It has also started research projects on public sector leadership and different aspects of affordable innovation that directly benefit the poor — low-income housing, employability and skilling and microfinance. The Mohali campus will focus on four areas of national importance — health care, manufacturing, infrastructure and public policy.
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That brings us to the last point about why today’s educational campuses cannot be too far from the city hub. Attracting high-quality faculty (and students) requires an existing ecosystem in reasonably close proximity to provide access to industry. Strong industry-academia interaction is critical for building a thriving academic institution. Similarly, high-quality essential services such as schooling for children and medical care have to be provided to attract the best talent. If a campus is too far away, the institution will have to provide these facilities, diverting scarce funds to services that are not core to the provision of high-quality education.
Also, an educational institution’s life-span does not cover years or decades but centuries. A hundred years from now, 70 acres may be limiting and the campus will certainly have high-rise buildings, amidst an urban cluster. Much before that, like other great universities that started as standalone institutions, the IITs, the IIMs and ISB may well become full-fledged universities covering multiple disciplines and programmes, catering to thousands of students. Every major university in the world is facing a severe shortage of space because the initial estimates of land were grossly inadequate.
Great institutions are not just about square feet of space, they are also about an ambience that encourages learning, and knowledge discovery. We need to be in an urban area, but a dense, urban cluster is not the most desired choice for such a great learning environment. Hence the need to create a “green, peaceful learning zone” near the city.
Ajit Rangnekar is dean, ISB and Savita Mahajan is associate dean, ISB and chief executive, ISB-Mohali