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R A K E S H B A S A N T A N D PA R T H A M U K H O PA D H YAY
private funding of higher education through the establishment of privately owned educational institutions, which now constitute the majority of institutions in professional and technical education.
Relative Importance of Different Linkages The creation of knowledge and the creation of enterprises are, at this time, relatively weak channels of interaction between industry and academia. The universities produce few patents, and even the generation of publications is limited and is concentrated in a few universities. As for enterprise creation, the role of educational institutions can better be described as nurturing rather than creative—facilitating existing entrepreneurs in pursuit of their goals. A select few academic institutions are collaborating with a limited number of pharmaceutical and biotechnology firms to develop technologies. In this context, the growing interest of high-tech industry, especially IT, in remedial or supplementary education and in participating in the improvement of educational institutions indicates that the strongest link at this time between higher education and high-tech industry in developing countries such as India is likely to be through the labor market.
Labor Market Linkages To investigate the nature of the labor market linkage, we analyze unit-level data from the 61st round of the National Sample Survey (NSS) for 2004–5.19 If the labor market links between higher education and high-tech industry are strong, one would expect that persons with higher education would have a higher propensity to be employed in high-tech industry.
Defining High-Technology Industries Following the classification by the Organisation for Economic Co-operation and Development (OECD) of industries as low tech, medium tech, medium-high tech, and high tech, we grouped 60 manufacturing industries into three categories.20 Stehrer and Wörz (2003), in their analysis, use four categories, according to technology level: low, medium low, medium high, and high. This grouping is not as disaggregated as the OECD’s, and a comparison of the two shows that several groups categorized as medium tech by the OECD are under high tech in the other categorization. At the three-digit industry group level, reclassification of the OECD high-tech designation into medium high and high tech might be too arbitrary. Consequently, for our purposes all manufacturing industries categorized as medium-high tech in the OECD classification are considered high tech. The “high-tech equivalent” in the services sector is categorized as financial and ITrelated services. Anecdotal evidence suggests that in recent years a large proportion of persons with higher education have joined these sectors, especially those who have