Indian firms spend less than 1 percent of profit on R&D
By siliconindia   |   Tuesday, 18 January 2011, 00:11 IST   |    16 Comments
Printer Print Email Email
Indian firms spend less than 1 percent of profit on R&D
Bangalore: According to the recent survey by Associated Chambers of Commerce and Industry of India, Indian firms spend less than 1 percent of their net profit on Research and Development (R&D) which continues to be lower than their global counterparts. About 45 percent of the companies working in the sectors like automobiles, software and pharmaceuticals said that they spend less than 1percent of their annual profit on R&D, the survey said. Number of companies participated in he survey has not been mentioned by the chamber. To increase the momentum of the product development and innovation, and boost their product amidst global competitors, around 27 percent of the companies have started working on investing upon Research and Development, finds the chamber. Majority of Chief Executive Officers are of the opinion that to become globally competitive, Indian firms have to start spending on R&D and focus upon new product innovation. Government should take an initiative of formulating policies that would help companies to have more R&D centres and expand the existing ones so as to enhance research and Development activities in India. ASSOCHAM also highlighted that CEO's of several companies emphasizes on making the Corporate Social Responsibility mandatory to strengthen the product of the company and make it more people friendly. Among other issues ASSOCHAM draws the concern over decreasing skilled manpower in almost every sphere which is responsible for paralyzing the industry in country. Basic challenges faced by 46 percent company CEO's in present scenario are the rising material costs and unavailability of skilled man force. The bottomline is companies should start taking investments on Research and Development activities more seriously so as to prosper in their related fields.

siliconindia