In the coming decade, we will see universities in developing countries like India emerge from being teaching shops to research universities. The shift would be facilitated by rise of academic entrepreneurship and funding from local industries. For example, the Indian Institutes of Technology are considered premium engineering institutes in the world, and admission to the IITs is highly selective, a student has a higher probability of getting into MIT than IIT. But it is still a teaching university as it primarily awards a bachelors degree in technology, very few students go on to a Masters or Phd degree. Paucity of funds makes research almost impossible. Unlike the US where we take for granted industry support for research in the universities, there is no lifeline that pumps money for research to most universities in India. Local industry leaders till now did not have deep pockets or a need to innovate to support universities. However, it is changing as companies from India and China try and compete in the global arena they will be forced to innovate, and look to partnership with universities to provide them the impetus to innovate.
One more thing that is missing in India is an academic project turned money maker. India has not had its google as yet. A PhD thesis that becomes a successful company. Once this happens, more students will be interested in pursuing a Masters or a PhD degree.