Cost control deterring innovation of R&Ds in India
By siliconindia   |   Thursday, 26 August 2010, 21:49 IST   |    3 Comments
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Cost control deterring innovation of R&Ds in India
Bangalore: While R&D centers in India has evolved at a rapid pace over the last 10 years, the leadership teams of these centers have not seen the commensurate growth. While they have moved up the value curve they are still not making any top-line impact despite the existence of a sizeable opportunity. Despite the rapid pace at which the Indian R&D industry has evolved over the years, the perception of globalization practitioner's in the headquarters regarding the R&D system in India has not changed much from 2007. The cost scenario continues to play a significant role as a driver of globalization till date. Though there has been some improvement in terms of innovation focus, it is still not the major driving factor and in fact many of the global centers are underutilized for innovation. Zinnov Management Consulting firm's study on 'Global Leadership from India', found that Cumulative opportunity in domestic and emerging markets is indeed more than developed markets and these clusters of emerging geographies have very similar needs that can be tapped into easily. With the vast availability of skilled workforce, R&D centers in India can derive global market innovations at a significantly lesser cost "Though India offers a significant cost arbitrage when compared with the costs in U.S. and Europe, the R&D centers in India are losing out on certain key aspects because of excessive focus on cost. While cost control is the top priority, aspects like innovation, competency creation and leadership roles often get over looked," says Pari Natarajan, Chief Executive Officer, Zinnov Management Consulting. "While a few companies have been fairly successful in uplifting the maturity of the centers in India, others should also start looking beyond cost control to bring in global leadership and innovation capabilities at the center which would help them move up the value chain and become critical centers for the parent organization," he added. The study also found that the opportunities are plenty in India - across Enterprise, Government, SMB and consumer for the much desired growth. The current level of maturity of R&D related work in India for many of the centers definitely has a scope of improvement, given the strong R&D ecosystem that India has been able to build over the last 25 years. There is an urgent need for MNC R&D centers to focus beyond cost efficiency and aspire to become global strategic partners.

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