Indians are naturally gifted in cutting costs, the “Jaipur leg” being one of the many examples. We can do almost anything at a fraction of what it costs the western world. But when it comes to taking world leadership a step forward by innovating, we usually shy away. We prefer to copy and not create.

Unfortunately, Indian business schools are no different. Many are adapted from western MBA programs without even a semblance of doing anything different. It costs $160,000 to do an MBA in a top Ivy League US b-school, but the same costs just below $30,000 in a leading Indian b-school. So once again, the Indian focus is purely on cost-reduction and not innovation.

More pointedly, there are two key constituents in a b-school – faculty and students. Schools in the US are able to attract the best faculty from around the world. The b-schools at Harvard, Cornell, Chicago, Carlson and INSEAD, for instance, have Indians on board as Deans. In India, do we even think of hiring an American as the dean? Indian schools have a 100% Indian starcast. Management gurus whose books we grew up studying – Porter, Kotler, Prahlad, Gladwell, Collins, Peters – are all American and the single Indian name on the list also worked for an American university and not Indian.

Though I fully recognise Indian teaching talent, surely we could use other world-class faculty of other nationalities. The real question however is – do we wish to pay the salaries they would demand?

Most Indian b-schools do not understand that the very best faculty are creators of knowledge and not just teachers. They are thought leaders and are devoted to an environment of research. However, research and innovation require time and cost investment, sometimes with no tangible outcome. World-class universities have world-class faculty who need the budgets to fund their research. Indian b-schools do promote research, but by using quantitative performance indicators they prevent groundbreaking innovation. Faculty is rewarded on the number of journals they publish in and not on creating just one pathbreaking management idea.

When it comes to student recruitment (admissions), the story is no different. INSEAD, a leading France-based b-school has a policy of restricting any one nationality to just 10%, making for a rich and diverse classroom. Top Indian b-schools successfully recruit high quality Indian students, but hardly any effort is put into attracting top students from other countries. Their 100% placement records ensure a steady flow of applications every year and thus, they have very little reason to innovate. This is not to suggest that their programs are sub-standard but merely to point out that they have not tried anything new. Is this a wise strategy to becoming world-class?

The thinking in other developing and developed countries is very different – they yearn to become world leaders. Their strategic focus revolves around innovation. Harvard, for instance, created the well-established case study method of teaching whereas Stanford built strengths in entrepreneurship as a result of which Stanford has more startup billionaires as its alumni than any other school in the world. London Business School leverages its location in London as being the top financial centre of the world. Closer home, the strategy revolves around maintaining the status quo.

What about the role of government? What is their contribution towards promoting innovation and the quest to becoming world-class? The Singapore government for instance, has a vision of building a world-class education system and thus, attracts world-class faculty who are paid global salaries. The Indian government however, epitomises the Indian way of thinking – low cost at any cost. Fees are controlled, salaries are controlled and the babu thinking is all-pervasive.

Yes, it’s important to understand that we are a country with a per-capita income of just 10% of the western world, but it begs the question – how will we raise the standard of living if we don’t change the mindset of the upcoming generation of Indians or don’t produce leaders who create world-class products and services? Someone has to fund the education sector – either the government does it or if they lack the resources, they must take a step back and encourage private sector investment. Sadly, the current policies are not framed to allow that.

The quest to becoming world-class starts with a hunger to be world-class – a mindset which says that we wish to be leaders and not mere followers. We need individuals who are daring and are courageous enough to experiment. We need a team of gifted people who have the mental horsepower to innovate. Sadly, the Indian business education continues to remain at version 1.0. To become world-class, you need to evolve to business education 2.0.

Will Indians pay for the higher costs of education as a result of world-class quality? Evidence shows that Indians spend $20 billion every year going overseas to study, and not all find jobs in western countries. The reason to go abroad is also the superior quality, not necessarily jobs. Also, we can see that the IIMs have increased their fees from Rs 4 lakhs six years ago to Rs 16 lakhs now without a drop in applications. ISB Hyderabad’s program costs $45,000, but they have no shortage of applications. In other words, students will pay for world class quality if they get it.

The author Nitish Jain is President, SP Jain School of Global Management, Singapore and the grandson of the original Mr SP Jain who started the SP Jain Institute of Management and Research at Mumbai. He holds an MBA degree from Cornell University.