India’s Underutilised Knowledge Power

by Indra

Dec. 28, 2006

India has nearly 200 national research laboratories, an equal number of research establishments in the central sectors, another 1300-odd recognized R&D units in the industrial sector, besides the R&D facilities with India’s university system that constitutes of 237 universities, 39 ‘deemed’ universities and 10 institutes of national importance. DRDO and CSIR have established its reputations.

India’s institutions add around 200,000 people to the science and technology pool every year that is already the world’s largest. What are all these institutes and its manpower engaged in? Are the facilities available being utilizing to the optimum? Can it be made more efficient and productive to add more revenue or to create more employment? NASSCOM estimated the global KPO market to reach $17 billion by 2010, and is confidant that India will bag about 70% of this business.

However, the NASSCOM scope of KPO considers only the traditional areas such as financial processes, legal work, human resources, in which India is already doing pretty good business. Why can’t India leverage its scientific establishments to pitch in the task and join KPO providers group that can multiply the Nasscom revenue estimates many a times?

As reported, India can’t compete with China that invest $136 billion on R&D. But how do the majority of the Indian scientists compare with their Chinese counterparts in output of researches and its quality? And how can they be made more motivated in their work? Why can’t the scientists community improve their performance to match that of Chinese?

A recent research on the world’s top 1,000 R&D spenders, consulting firm Booz Allen Hamilton identified smart spenders, who spent a smaller percentage of revenues on R&D than industry peers (over a five-year period), but still performed better. There was one Indian company in that list of 94 — Tata Motors. “Indian engineers, with an unbeatable combination of skill and frugality, may show the way ahead. Indian companies are spending less, but are getting more research done per dollar spent.” But is it true for the scientists and research workers in government institutions?

Over 500 of India’s largest listed companies put together spent less than a seventh of what Ford Motor. Though a loss-making automaker, Ford spent last year on its R&D $8 billion that happens to be the world’s largest. These 500-plus companies put together would rank 75 in the list of the world’s largest R&D spenders (put out by the Financial Times in its annual R&D Scoreboard). It’s a poor show. Ranbaxy Laboratories, the India’s largest spender, would not make in the global top 300. India must spend more, and it is happening too. While only three companies spent more than Rs 100 crore on research four years ago, today there are 14. Research investments have grown from Rs 2,405 crore to Rs 5,333 crore in that period. And now, 16 companies have the guts to pour over 10 per cent of revenues into research.

And interestingly, the centre of gravity in research is shifting to India and China. According to Booz Allen Hamilton, growth of corporate R&D in the two countries (17 per cent) outpaced North America (5.2 per cent) and Europe (2.3 per cent).

In the past four years, the automotive industry’s (excluding component makers) spending on R&D has increased from Rs 243 crore to Rs 954 crore. The industry also invests 1.5 per cent of revenues in R&D that was just 0.68 per cent four years ago.

And one can see that in new platforms on Indian roads like Tata Motors’ Indica and Ace, and the forthcoming Rs 1-lakh car, and Mahindra & Mahindra’s (M&M) Scorpio. However, it is unfortunate that the huge facilities of R&D is neither used for BPO nor for developing some real useful products that can revolutionise the quality of life of the majority of Indians.

But more surprising is the indifference of our media that hardly covers even the excellent success stories of our scientists.

Return to previous Page