A report in the latest issue of Business Today (BT) highlights the sad state of affairs in India’s b-schools. The 4000 plus b-schools in India have collectively produced 36 articles between 2009 and 2012, in the 24 journals tracked by UT Dallas as the leading journals in management. Compare this to the 276 articles produced in the same period by the Wharton School. The BT article made several observations about why this sorry state of affairs: shortage of funds for research, shortage of staff leading to higher teaching workloads, lack of data, lack of appraisal systems that incentivize research, and the lack of ability of faculty members to conduct research.

While these reasons are all valid, the government today is providing funding for research and the b-schools have begun to incentivize research in their appraisal systems. At a recent conference a couple of months ago in Bengaluru, I spoke to several academics from the IIMs which suggested that, today, funding is available and the IIMs are emphasizing and incentivizing research. I believe that what is holding back research output is the capability issue.

Why do many of the members the b-school faculty in India lack the capability for research? One key reason is the salary structure set by the Government of India, which has resulted in a flight of talent from academia. A salary structure, which at the top of the scale gives a senior faculty member a salary of roughly Rs. 100,000/month (US$ 1,800), is well below that offered elsewhere in the world including in neighboring countries such as Pakistan and Bangladesh. It is also below the starting salaries of the more talented students from the better b-schools, who are at the very beginning of their careers. Indeed, the argument that poor salaries lead to a flight of talent is consistent with the fact that ISB is the most productive school on the research front, having produced 22 of the 36 articles published nationwide– ISB pays an internationally competitive salary and has been able to attract world class research talent.

Thus, if Indian b-schools have to become more research productive, then on the one hand, the Government not only needs to step up to the plate with funding for research, as it already appears to have done, but also cut the shackles of the salary limits that it sets, and fund the Government establishments, such as the IIMs, more liberally with regard to meeting competitive salaries for research capable and productive faculty, and, on the other, the private sector has to start investing in b-schools through endowments, as is done in the US, to support both the research budgets and the higher salaries, that are needed.

Without increasing the salaries of existing research capable faculty to competitive levels, so that they invest in research rather than consulting, and without increasing salaries to attract new research capable faculty to the b-schools, the funding provided as research budgets by the Government or the private sector will be dissipated on less impactful and visible projects, and the next survey, such as the one published in BT, will look no brighter.