FACTOR PRICE EQUALIZATION IS NOT EQUIVALENT TO A RACE TO THE BOTTOM. Should I take joy in the realization that higher education in India might be confronting some of the same troubles as its U. S. counterpart? Via Daniel Drezner, two articles that highlight the economic laws of conservation as they apply to outsourcing. First, in the New York Times, the Principle of Increasing Opportunity Cost.

India is bumping up against an improbable challenge. In a country once regarded as a bottomless well of low-cost, ready-to-work, English-speaking engineers, a shortage looms. India still produces plenty of engineers, nearly 400,000 a year at last count. But their competence has become the issue.

A study commissioned by a trade group, the National Association of Software and Service Companies, or Nasscom, found only one in four engineering graduates to be employable. The rest were deficient in the required technical skills, fluency in English or ability to work in a team or deliver basic oral presentations.

(Presumably that addresses the urgency of training Indian engineers to compete in the global economy or some stuff-and-nonsense of that sort. The domestic labor market might be another matter.)

Industry's response is what one might expect in the face of an upward-sloping supply curve.

The university systems of few countries would be able to keep up with such demand, and India is certainly having trouble. The best and most selective universities generate too few graduates, and new private colleges are producing graduates of uneven quality.

Many fear that the labor pinch may signal bottlenecks in other parts of the economy. It is already being felt in the information technology sector.

With the number of technology jobs expected to nearly double to 1.7 million in the next four years, companies are scrambling to find fresh engineering talent and to upgrade the schools that produce it.

Some companies are training faculty members themselves, offering courses tailored to industry needs and improving college labs and libraries. They are rushing to get first choice of would-be engineers long before they have completed their course work. And they are fanning out to small, remote colleges that almost no one had heard of before. The country’s most successful technology concerns can no longer afford to hire only from the most prestigious Indian universities. Nor can they expect recent graduates to be ready to hit the shop floor. Most companies require in-house training of anywhere from two to six months.

The reaction of employers: put pressure on India's less-famous universities (is the mid-major now a global property?) to become more like the prestige schools.

They grilled professors and administrators: How many faculty members have doctorates? Why did so many students have incompletes by the time they entered their fourth and final year? What software programs do they use for the class in mechatronics — a combination of mechanics, information technology and electronics?

They tested the students’ ability to reason and speak, tossing out debate topics, like democracy versus dictatorship, and science quiz questions, like what happens to an iron rod put in a beaker of nitric acid.

They sampled the offerings at the college library and the English language lab.

The exercise was part of an elaborate process by the company to assess whether this campus, the K. S. Rangasamy College of Technical Education, can be added to the pool of colleges from which to recruit.

In the past, Tata Consultancy Services needed only to turn to the top engineering schools in the country: the nine campuses of the Indian Institutes of Technology and a few others gaining admission can be more difficult than getting into the Ivy League. Today the list includes 209 institutions, many of them, like this one, brand-new private colleges that have emerged to meet the need. Mr. Rangasamy, the college’s founder, is himself the product of the Indian economic expansion. His factories produce tablecloths and bedsheets for Kmart and Marriott.

No access-assessment-remediation-retention here!

In the end, the Rangasamy college did not fit the company’s bill. The team found deficiencies in the way basic subjects were taught and deemed the students to be average.

Higher education is still available only to a tiny slice of India’s young. No more than 10 percent of Indians ages 18 to 25 are enrolled in college, according to official figures. Nearly 40 percent of Indians over the age of 15 are illiterate.

The article focuses on the development of programmers and engineers. The challenges confronting the common schools (the causes of school-leaving are probably much more severe than their U.S. counterparts) are for another day. It concludes by observing that India's college graduates are often prospering beyond their wildest dreams.

And in Boston, a more realistic prosperity is returning to the high-tech businesses.

Global demand for technology products, from cell phones to MP3 players, also is boosting Massachusetts tech firms, which make the equipment for manufacturing such products. Booming electronics companies in China, for example, need the advanced manufacturing and testing equipment designed and made in Massachusetts. Those equipment sales have helped make China the state's sixth largest foreign market, as well as one of its fastest growing.

Sales to China and other Asian nations account for at least 70 percent of sales for Axcelis Technologies Inc., of Beverly, a maker of semiconductor manufacturing equipment, according to Mark Namaroff, senior vice president of strategic marketing. The company, which employs about 1,000 in Massachusetts, has reported double-digit revenue growth this year, while adding about 50 manufacturing jobs.

Exports of knowledge products to China, forsooth!

On tap for tomorrow's advanced theory class: the factor price equalization theorem. Tangent planes, normal vectors, and product prices. It's only a race to the bottom if nobody's buying, folks.