Technology sector transforms into a major R&D machine

Bangalore: When the world thinks of the Indian technology sector, it imagines a nation of call centre workers and low level computer programmers administering databases and updating websites. Few observers, even in India, realize that the Indian technology sector has rapidly transformed into a giant R&D machine. A host of brand name global multinationals have set up their own R&D operations in India. Intel designed its six core Xeon processor exclusively in India.

IBM has over 100,000 employees in India and they are performing significant roles in most of its software development projects. Cisco is developing cutting edge networking in Bangalore, reports Economic Times. Adobe, Cadence, Oracle, Microsoft and most of the large software companies are developing their mainstream products in India.

In a parallel development , many of the original outsourcing names, such as Infosys, Tata Consultancy Services and HCL have climbed the value chain and are now providing this type of creative and far more valuable R&D work for global multinationals on an outsourced basis.

Semiconductor design, aerospace, and medical devices are all segments where large Indian outsourcers provide core R&D work for MNCs, work that was previously considered sacrosanct and never performed by entities outside the corporate veil.

Equally important are the arrival of Indian MNCs who are explicitly tackling global markets, such as Tata with its dirt cheap Nano car that the company is now positioning for a European market entry and Reva, which recently announced it was planning to build an electric car factory in New York state to enter the U.S. market for electric vehicles.

Suzlon, a large player in the wind power space, is yet another Indian MNC selling in foreign markets.
What has been missing to date in India, however, is early stage venture activity and the type of grassroots entrepreneurism that is the hallmark of American capitalism and Silicon Valley.