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India is over-hyped as an innovation hub
By siliconindia
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Saturday, 20 September 2008, 17:40 IST
Bangalore: India is perhaps holding a better position among major IT exporting nations presently, but as far as the innovation of new products is concerned the country is far behind the other largest IT destinations, reports IDG news service.
Sudin Apte, an analyst at Forrester Research, and Vinay Deshpande, a computer developer, said that subsidiaries of most of MNCs do product maintenance and testing and the development of small components of products in India.
"We do not think out new products or architect products in India, we get to do the coding for new products, and are mainly involved in maintenance or making improvements to legacy products," says a software engineer at a multinational vendor of banking software in Bangalore.
Deshpande said, "The situation is a lot better than it was some years ago, but most Indian operations of multinational companies are still far away from defining and architecting products. A lot of the product innovation in the country is coming from small and medium-size Indian companies."
An executive of the Indian subsidiary of a technology company opined that multinational technology companies typically claim in their advertisements and press announcements that they are doing innovative product development in India. That image helps companies attract employees.
For multinational companies, lower cost of staff and the availability of talent are the advantages in establishing offshore development operations in India. "But innovation, which is thinking out a product or having ownership of a product, does not happen at the Indian subsidiaries," said Apte.
"When technology companies have outsourced to Indian companies, they have usually contracted for staff on a time and materials basis, which reflects the kind of work that is getting done in India," he added.
Contradictorily, some of global companies such as Intel and Texas Instruments have started to develop new products in India. For instance, Intel designed the first six core microprocessor at Intel's Bangalore center.
Deshpande further added "Having tried Indian staff on support work with good results, some of the companies are taking the risk of doing product development as well in India."
"Companies having development centers in India will benefit if they start focusing on product innovation. Indian outsourcers will also have to focus more on their capability to deliver product innovation, rather than promote their companies as mere low-cost service providers," Apte concluded.
