CEO Asia Update Luncheon

I had the privilege a couple of weeks ago attending a talk by Thomas Friedman, the Pulitzer Prize winning columnist and author of the book “The World is Flat: a Brief History of the Twenty-First Century”. In the talk and the book he described the voyage of discovery he had in 2004 when he traveled to India, specifically Bangalore, and saw the extraordinary developments occurring there. He noticed the extent to which tasks involving information and communications technology were being outsourced to India, including not only call centres but also accounting and many other tasks that could be handled by work flow solutions on the internet. He noted the extent to which multinational companies were establishing significant activities there and taking advantage of the enormous human capital in India. The title of the book came from a conversation with Nandan Nilekani, the CEO and Founder of Infosys, a huge Indian information technology company employing close to 50,000 people and having activities in many parts of the world. Nilekani described the way in which the internet and methods of accessing and transmitting information on it had allowed new business practices which had extended beyond outsourcing to insourcing, extensive transnational collaboration between small and large groups and the development of new businesses based in India or China, influencing the whole world. He described the leveling of the playing field which had occurred as a result of the new technology which meant that the traditional economic power base of the huge multinationals based in the west and supplying and profiting from the rest of the world had altered. This came as a shock to Friedman. He was smart enough to see the paradox of Columbus sailing west in 1492, discovering Indians and deciding that the world was round compared with his own voyage east, discovering Indians and deciding that the world had become flat! The old world had in the best Hindu tradition had a rebirth as the new world.

In February this year, our Dean of Engineering, Tam Sridhar, an expatriate Indian who studied for his Masters degree at the Indian Institute of Science in Bangalore and then for his PhD at Monash University and who has had a very distinguished academic career in the Faculty of Engineering at Monash led a delegation from Monash on our own voyage of discovery to India. After a previous reconnaissance visit, he wanted to convince us that Monash should be part of this renewal of the old world. Tam and I were accompanied by our DVC (Research) Edwina Cornish and our Dean of Science, Rob Norris and significantly by the Vice-President Technology of BHP, Megan Clark who heads the world-wide research and development program for BHP.

I suspect that the antennae of Australia have not been quite so directed towards Al-Qeda as the US. Our location in Asia and our necessity to look beyond our shores have ensured that we take a bit more notice of what is happening in India. So the revelation for us may not have been quite so stark. None-the-less, the take home message is the same. A lot is happening in India and we should be part of it.

Like Friedman, we visited Infosys. Inside their compound, beyond the chaos of a still dysfunctional road and transport system lay a state of the art, beautifully landscaped company headquarters, research laboratories and training site for one of the world’s most successful companies. Our young people are smart enough to know that this is where the action is. I was pleased to find a Monash student there amongst the interns from around the world who compete to gain a place at Infosys. We also visited a home-grown, highly successful biotechnology company, Biocon, founded by a graduate in brewing from Ballarat University, and a number of other startling places, public and private, research and production.

But the most significant visit from my point of view was to the John F. Welch Technology Center of General Electric. This is the largest of three research laboratories of GE, the largest company in the world. Like Infosys, it is a wonderful state of the art compound set in rolling green lawns and with fantastic facilities for the employees, a whole world away from the noise and chaos outside. There are over 2400 employees here, mostly researchers, almost all of them Indians and many with PhDs from the USA. Research is not confined to IT – far from it. They are heavily into chemical engineering, materials, nanoscience and microelectronics and their equipment is state of the art. We asked the CEO why GE had established its major research laboratory here. He said that the original plan had been to establish a significant but much smaller laboratory in India with about 500 employees. The then CEO of GE, the remarkable and Jack Welch visited and transformed the scale of the exercise. As expressed to us the rationale goes like this. It is much less expensive to do research in India – capital infrastructure and labour are about a fifth the cost of the USA and Australia, but that is not the primary reason for establishing such an extensive research centre in India. The primary reason is the human and intellectual capital which is so readily available and the excellent information and communications technology infrastructure. There are of course problems but they can be overcome. Water is polluted so they have their own water purification plant. Power plants are antiquated and power failures are common so they installed their own generator. And of course the road system remains chaotic so their employees live nearby.

We met a number of other people in our voyage to India. They included C.N.R.Rao, a world renowned chemist who has had his own institute formed in his honour and who is the Chairman, Science Advisory Council to the Prime Minister. He was the primary author of the Rao Report on the approach to foreign universities seeking to operate in India. This places restrictions that would limit the operations of fly-by-night for profit operators but he made the clear distinction that institutions such as Monash would be more than welcome. We also met M.M. Sharma and Ramesh Mashelkar. M.M.Sharma is a revered chemical engineer who is on just about every influential board and for 10 years was an adjunct professor at Monash. He also advises the Prime Minister on science and technology. Ramesh Mashelkar is the Director-General of CSIR, India’s equivalent of CSIRO. All were urbane individuals of glowing intellect. They made clear to us that a genuine scientific partnership between Monash University and one of their leading scientific institutes would be more than welcome. In Delhi, we met the Head of the Ministry for Science and Technology, Dr Ramamurthy, an enthusiastic man who spoke with passion at about a thousand words per minute. He was enthusiastic about our plans and said that the Indian Government would support them.

We also met the Minister for Science and Technology, The Honorable Kapil Sibal, who had that week been promoted to the Cabinet. He met us in his own home without “minders” and most impressively, despite being a lawyer, he showed a great understanding of the challenges and opportunities facing India in science and technology and embraced our enthusiasm to partner with a leading Indian institution to help build scientific and technological collaboration between our countries.

So what is our proposal and what is its rationale? Well I would like to start this part of the talk with a brief summary of Monash’s international strategy. Monash is determined to be a great international research intensive university. In order to achieve this, international collaboration is vital. Of course we have all the international research linkages one would expect from a large research university. These are largely based around individual researchers developing collaborations with cognate researchers wherever they are in the world. We also have a particular liaison with King’s College London and a developing relationship with the University of California San Diego and with the University of Newcastle-on-Tyne.

But we want to go beyond these usual international research collaborations. We believe that situated in Australia which, with its 0.3% of the world’s population and 2% of the world’s research productivity can easily be by-passed and ignored. Our philosophy is based on the premise that if we wait for the world to come to us, it will be a long wait. Instead, we have adopted the strategy of reaching out and engaging the world in a physical sense.

Our campuses in Kuala Lumpur and Johannesburg are part of this strategy. As they mature, they will become major nodes of our Melbourne-based research institutes in areas such as nanoscience and materials and biomedical science (in Malaysia), African studies (in South Africa) and sustainability, including energy and the environment, public health, regulatory affairs, e-research and global movements in both Malaysia and South Africa. But it is resource intensive and time consuming to build a full university campus in another country from scratch and we do not wish to start another undergraduate campus until these two are mature and self-sustaining. We cannot wait that long to become seriously involved with India so we are adopting a strategy of cutting to the chase and developing a joint research academy with the Indian Institute of Technology Bombay (IITB) in Mumbai. This institution was chosen because of its very high scientific standing in science and technology and its enthusiasm to engage with us. The research academy will have a shared governance arrangement between our two institutions, will have a separate physical presence on or near the IITB campus in Mumbai and staff will have joint appointments with either Monash or IITB or both. Conditions of employment will attract the best staff and the joint reputation of our institutions will attract the brightest PhD students. Importantly, in contrast to the situation in Australia, large multinational companies are investing in research in India and we expect to attract substantial industry funding. We already have assured funding from BHP-Billiton. We are hopeful that we will obtain funding from the Indian government and the Australian government but we are also prepared to make a commitment of our own to ensure that the program is successful. We believe that this physical presence in India will build collaborations, allow us to tap into the enormous intellectual capacity of the young people of India who are seeking research training opportunities. The focus of the joint research and research training will initially be in advanced computational engineering, clean energy, water, nanotechnology and its applications, biotechnology and stem cell research but these will be refined as planning proceeds. We signed an MOU with IITB in the presence of the Prime Minister in Mumbai in March and the definitive business plan will be finalized by the end of the year.

We have a somewhat less ambitious plan with a similar underlying philosophy with China. Again, we have of course a number of collaborative programs already. But we are planning joint research laboratories with the Shanghai Institute of Biological Sciences with joint laboratories in both Shanghai and Clayton.

The recent report of the Working Group on China and India reporting to the Prime Minister’s Science, Engineering and Innovation Council in June identified the enormous rate of investment in science and technology occurring in China and India and the need for Australia to increase its investment and to engage seriously with these developments in our region. There is a high risk of marginalization and merely becoming a huge mine fuelling the economic boom in the two countries. But there is also a great opportunity and with help from government and industry, Monash University is determined to grasp it.

Thank you for your attention.