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R&D gives India its big boost in the tech world | R&D gives India its big boost in the tech world |
(about 7 hours later) | |
By Shilpa Kannan BBC News, Nashik | |
"We are a software dhaaba," says Ashwin Kandoi, describing his technology company. | "We are a software dhaaba," says Ashwin Kandoi, describing his technology company. |
A dhaaba is a roadside eatery that can pretty much make anything a customer wants. | A dhaaba is a roadside eatery that can pretty much make anything a customer wants. |
That's the idea behind Winjit Technologies, started eight years ago by Mr Kandoi and his partner Abhijit Junagade. | That's the idea behind Winjit Technologies, started eight years ago by Mr Kandoi and his partner Abhijit Junagade. |
Located in Nashik in India's western state of Maharashtra, it began with a budget of less than US$200 - but now employs over 100 people and exports to 40 countries. | Located in Nashik in India's western state of Maharashtra, it began with a budget of less than US$200 - but now employs over 100 people and exports to 40 countries. |
The core of their organisation is a tiny research and development (R&D) lab. Here they make everything from simple products - like games - to custom-made programs for multinational clients. | The core of their organisation is a tiny research and development (R&D) lab. Here they make everything from simple products - like games - to custom-made programs for multinational clients. |
One of their biggest successes has been an e-management tool. | One of their biggest successes has been an e-management tool. |
It was made for employees of a inter-governmental organisation to efficiently spend donor funding during disaster relief work. | It was made for employees of a inter-governmental organisation to efficiently spend donor funding during disaster relief work. |
Made at one-tenth of the cost of similar programs, it is now used in eight regions across the globe. | Made at one-tenth of the cost of similar programs, it is now used in eight regions across the globe. |
The United Nations Office for Disaster Risk Reduction used the same technology for its One Million Safe Schools and Hospitals Campaign - a global advocacy initiative to make schools and hospitals safer in disasters. | The United Nations Office for Disaster Risk Reduction used the same technology for its One Million Safe Schools and Hospitals Campaign - a global advocacy initiative to make schools and hospitals safer in disasters. |
They recently filed their first patent application for a product called 'I-Winjit' - a technology that lets tablet computers recognise objects - for example a toy elephant - placed on the screen. | They recently filed their first patent application for a product called 'I-Winjit' - a technology that lets tablet computers recognise objects - for example a toy elephant - placed on the screen. |
When it identifies an object it delivers information, sounds and images related to it - in this case pictures and sounds from an Asian jungle. | When it identifies an object it delivers information, sounds and images related to it - in this case pictures and sounds from an Asian jungle. |
Big R&D spenders | Big R&D spenders |
This firm represents the big shift happening in India at the moment. | This firm represents the big shift happening in India at the moment. |
Small garage-sized outfits across the country are working on cutting-edge research and exciting new product development. | Small garage-sized outfits across the country are working on cutting-edge research and exciting new product development. |
But the key driver of R&D activity in the country is large multinationals. Offshoring has grown into an industry worth US$9.3bn a year that is growing by 23% annually. | But the key driver of R&D activity in the country is large multinationals. Offshoring has grown into an industry worth US$9.3bn a year that is growing by 23% annually. |
According to a Zinnov Management Consulting study, nearly half of the world's largest R&D spenders have centres in India, where researchers and scientists collaborate to produce innovative new products. | According to a Zinnov Management Consulting study, nearly half of the world's largest R&D spenders have centres in India, where researchers and scientists collaborate to produce innovative new products. |
Business software specialists SAP Labs were among the first multinational companies to use India as a location. | Business software specialists SAP Labs were among the first multinational companies to use India as a location. |
They set up in Bangalore in 1998 after deciding to extend their labs beyond Germany and the US west coast. | They set up in Bangalore in 1998 after deciding to extend their labs beyond Germany and the US west coast. |
The centre does both research work and software development. | The centre does both research work and software development. |
The company's India operation is one of the fastest growing subsidiaries within SAP worldwide. Compared to 11% globally, SAP in India registered over 60% revenue growth in the first quarter of 2012. | The company's India operation is one of the fastest growing subsidiaries within SAP worldwide. Compared to 11% globally, SAP in India registered over 60% revenue growth in the first quarter of 2012. |
They're not alone; global multinationals such as Microsoft, IBM, Cisco, Oracle, Adobe and Intel all have centres in India. | They're not alone; global multinationals such as Microsoft, IBM, Cisco, Oracle, Adobe and Intel all have centres in India. |
Another big innovator, Xerox, has a lab in India. Through a concept called Open Innovation, the company not only employs researchers but works with scientists and researchers from top Indian academic institutions. | Another big innovator, Xerox, has a lab in India. Through a concept called Open Innovation, the company not only employs researchers but works with scientists and researchers from top Indian academic institutions. |
Chinese telecom company Huawei has invested $400m over the past 10 years in India, and is planning to invest an additional $150m in a new R&D campus in Bangalore. | Chinese telecom company Huawei has invested $400m over the past 10 years in India, and is planning to invest an additional $150m in a new R&D campus in Bangalore. |
Zynga, makers of hugely popular online games like Farmville and Mafia Wars, have opened an office in Bangalore with over 200 employees. | Zynga, makers of hugely popular online games like Farmville and Mafia Wars, have opened an office in Bangalore with over 200 employees. |
And Google's engineering teams in Bangalore and Hyderabad were responsible for some key features of Google Drive, the search giant's recently-launched cloud storage service. | And Google's engineering teams in Bangalore and Hyderabad were responsible for some key features of Google Drive, the search giant's recently-launched cloud storage service. |
In retail too global companies are looking to India for their R&D facilities. | In retail too global companies are looking to India for their R&D facilities. |
Tesco Hindustan Service Centre is a unique facility where thousands of Indian engineers, architects and other graduates work together on key business services for Tesco operations globally. | Tesco Hindustan Service Centre is a unique facility where thousands of Indian engineers, architects and other graduates work together on key business services for Tesco operations globally. |
This includes everything from property design, business and financial operations, and mobility solutions. | This includes everything from property design, business and financial operations, and mobility solutions. |
Pharmaceuticals is the other big sector where global R&D is moving to India. | Pharmaceuticals is the other big sector where global R&D is moving to India. |
In April, India's largest drug maker Ranbaxy Laboratories launched Synriam, a treatment for Malaria. They claim this is India's first new drug. | In April, India's largest drug maker Ranbaxy Laboratories launched Synriam, a treatment for Malaria. They claim this is India's first new drug. |
Dr Sudershan Arora, president of R&D at Ranbaxy says: "The country ... has a large pool of treatment-naive population with diverse disease patterns, [which make it easy for] recruitment [for research]." | Dr Sudershan Arora, president of R&D at Ranbaxy says: "The country ... has a large pool of treatment-naive population with diverse disease patterns, [which make it easy for] recruitment [for research]." |
"These are some of the inherent strengths that have made global pharmaceutical companies view India as a preferred destination for activities associated with R&D, drug research, clinical trials etc." | "These are some of the inherent strengths that have made global pharmaceutical companies view India as a preferred destination for activities associated with R&D, drug research, clinical trials etc." |
Global laboratory | Global laboratory |
But new drug discoveries are very rare and some critics say the bulk of the research done in India is low-end testing work. | But new drug discoveries are very rare and some critics say the bulk of the research done in India is low-end testing work. |
One reason is that public funding for research is still very poor. | One reason is that public funding for research is still very poor. |
India spends around $15bn (£10bn) annually on civilian research programs - less than that of several smaller Asian countries. Singapore spends over 2% of its gross domestic product and South Korea 3% on R&D. | India spends around $15bn (£10bn) annually on civilian research programs - less than that of several smaller Asian countries. Singapore spends over 2% of its gross domestic product and South Korea 3% on R&D. |
Yet R&D in the private sector is thriving. The Indian market is being looked at as a global laboratory to develop and test products that can be replicated across other regions. | Yet R&D in the private sector is thriving. The Indian market is being looked at as a global laboratory to develop and test products that can be replicated across other regions. |
"Today, India is a key market for emerging market innovations," says Chandramouli C S from Zinnov Management Consulting. | "Today, India is a key market for emerging market innovations," says Chandramouli C S from Zinnov Management Consulting. |
"The uniqueness of our market, like price sensitivity, needs a new solution-oriented approach, which engineers in India are well-positioned to solve." | "The uniqueness of our market, like price sensitivity, needs a new solution-oriented approach, which engineers in India are well-positioned to solve." |
Examples are the under-$40 mobile phone that Motorola has developed, or the MAC 400 - an electro-cardiography device "designed, sourced and manufactured in India" by GE Healthcare. | Examples are the under-$40 mobile phone that Motorola has developed, or the MAC 400 - an electro-cardiography device "designed, sourced and manufactured in India" by GE Healthcare. |
The device took 18 months and only half-a-million dollars to develop. | The device took 18 months and only half-a-million dollars to develop. |
This shift towards being a global laboratory gives India a huge advantage in attracting more R&D centres. | This shift towards being a global laboratory gives India a huge advantage in attracting more R&D centres. |
Added to this, labour in India is cheap. An engineer here can be hired for as little as US$5000 a year. A team leader or a lead engineer would make an average of US$30,000 annually. | Added to this, labour in India is cheap. An engineer here can be hired for as little as US$5000 a year. A team leader or a lead engineer would make an average of US$30,000 annually. |
Some estimates suggest that there are over 250,000 Indian engineers working on global R&D. | Some estimates suggest that there are over 250,000 Indian engineers working on global R&D. |
Developing complex products needs technical staff, engineers, scientists and designers - and India produces millions of them. Companies looking to produce products faster also find they can do this working in India. | Developing complex products needs technical staff, engineers, scientists and designers - and India produces millions of them. Companies looking to produce products faster also find they can do this working in India. |
And in the aerospace and defence industries, the Indian government often requires that products are made here, which in turn brings in more R&D. | And in the aerospace and defence industries, the Indian government often requires that products are made here, which in turn brings in more R&D. |
But working in India is not without its challenges. | But working in India is not without its challenges. |
Wages have been going up in recent years, inflation is a big worry and operational costs, at least in the big cities like Bangalore and Delhi, are high. | Wages have been going up in recent years, inflation is a big worry and operational costs, at least in the big cities like Bangalore and Delhi, are high. |