November 10, 2019The Intersectiontechnologyeconomicspublic policy

India needs foreign talent to indigenize defence equipment

Acquiring foreign human capital can accelerate product development cycles and help us gain cutting-edge technologies

Mint This is from The Intersection column that appears every other Monday in Mint.

At a recent discussion in one of our defence institutions, defence analyst Bharat Karnad made a striking point: that indigenization of defence equipment will remain an elusive goal if India’s procurement policy relies on offsets, and while requiring a foreign manufacturer to invest a certain fraction of the purchase value in an Indian firm might generate some employment, it will not result in the transfer of cutting-edge technology. If we want to leapfrog up the value chain, Karnad argued, we must insist that the foreign manufacturer bring in top talent into the country. In other words, what we really ought to be buying is human capital even if what we are ordering is fighter aircraft, missiles or combat rifles.

Indeed, the issue of human capital is almost completely absent from the debate on defence policy. This, despite one of the most remarkable success stories of indigenous defence production being the result of the kind of approach Karnad advocates. India was among the few countries—outside the Western powers—to develop a supersonic fighter plane in the late 1950s. The HF-24Marut project started in 1955, started test flights in 1961, and was inducted into the Indian Air Force in 1967. That’s a mere 12 years to go from drawing board to production in a country that was still struggling with mass poverty and had only a handful of good engineering colleges, producing perhaps a couple of thousand engineers every year.

India managed to achieve this feat because Jawaharlal Nehru’s government imported Kurt Tank, a German engineer who had designed fighter aircraft for Nazi Germany and was at a loose end in Juan Peron’s Argentina, where he had moved after the war. After a short stint at Madras Institute of Technology, Tank was employed by Hindustan Aeronautics Ltd (HAL) in Bengaluru, where he set about building the supersonic Marut. His team consisted of 18 German designers and over 800 Indian engineers and technicians. For unfathomable but not unfamiliar bureaucratic reasons, the Indian government decided against investing in a British company that produced the appropriate engines, resulting in an underpowered aircraft that the Indian Air Force couldn’t use as a frontline fighter. Even so, the Marut played an important role in the 1971 war as a ground attack aircraft. Oh, and by the way, one of the promising students Tank taught at Madras was a young man named APJ Abdul Kalam.

The Marut story highlights the importance of talent acquisition as a vital ingredient in the development of indigenous defence technological capacity. China’s leaders figured this out in the late 1980s, and after the fall of the Soviet Union, employed a number of Russian experts in its defence industries. While China’s blatant violation of Western intellectual property gets a lot of credit for its rapid military modernization, the role of foreign advisors and engineers is less known.

To succeed in the indigenization game, it is necessary to play the talent game well. In an important study of global talent flows published in 2016, Sari Pekkala Kerr, William Kerr, Caglar Ozden and Christopher Parsons showed how a few countries disproportionately benefit from skilled migration, none more so than the US. It alone accounts for more than a third of the world’s high-skilled migrants. In 2013, over half the science, technology, engineering and mathematicsworkers and 70% of software engineers in Silicon Valley were foreign-born. US institutions dominate the Nobel prizes for chemistry, physics, medicine and economics, but more than half the American winners in roughly the past four decades were foreign-born.

It gets even starker when it comes to inventors; the US gained almost 200,000 inventors from abroad between 2000 to 2010, of whom 60,000 came from China and 40,000 from India. Even European Union countries lost tens of thousands of inventors on a net basis to the US.

Now, it is hard for any other country to match the US as a talent magnet, but the world’s richest countries are trying hard. So is China. In recent years, it has not only relaxed residency rules for high-skilled professionals, but is actively courting foreign researchers, university professors and students. Humanities and social science professors might find the political atmosphere in China stifling, but engineers and scientists are more easily attracted by professional opportunities and lavish research funding.

Around a year ago, India lifted the need for prior clearance from the ministries of home and external affairs for hiring foreign faculty, and while there’s some sense in official circles that our best universities must acquire an international character, the country remains far from conducive to foreigners. Bureaucratic red tape and corruption not only push talented Indians to migrate abroad, but also deter high-skilled foreigners from coming to India.

There are many more The Intersection columns here

We often hear India has all the talent required to produce indigenous defence equipment, and that the shortcomings lie in the system”. What this view misses is that people like Tank can accelerate development cycles, upgrade the skills of the domestic workforce and inspire people like Kalam.

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