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EE Times on Indian R&D Centers

Posted on Tuesday, Mar 18th 2008

EE Times reports on India’s status as an off-shore R&D destination:


The rate at which multinational companies are establishing R&D centers in India has slowed significantly, according to a study on the outsourcing of R&D.

For the next 18 months, larger R&D centers will focus on increasing their staffs, but the study found that few technology companies will establish new R&D centers in India.

Study sponsor Zinnov Management Consulting Pvt. Ltd. said it found that the managers of existing multinational R&D centers are coping with rising costs, attrition and low productivity, especially compared to research centers in the U.S. Moreover, the study found that many Indian-based R&D centers have had problems ramping up their operations.

There are an estimated 594 multinational R&D centers in India employing 146,760 workers. Most are in Bangalore (312), followed by Pune with 96, the New Delhi area with 87, Hyderabad with 55 and Chennai with 39. Of these, 115 focus on telecom and networking, 75 on semiconductors and EDA tools and 48 on consumer electronics.

Ninety-three new centers were established in 2004, but that total dropped to just 24 in 2007.

With the majority of R&D centers (283) employing more than 100 workers, the annual cost for smaller Indian operations has risen between 8 and 15 percent. Annual attrition rates range from 8 to 20 percent.

Worker productivity at smaller Indian R&D centers was up to 40 percent lower, said Pari Natarajan, chief executive of Zinnov Management Consulting.


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I still say, if India is so innovative (as opposed to begging for the crumbs from European & American projects), where is the Indian Microsoft? Oracle? Google?

The view of India from the west is that they’re like “hey Westerners, we can’t come up with any good ideas, but do you have any ideas that you want implemented really cheaply?”

You can’t survive for long by competing only on cost. You must innovate & productize. Invest in R & D, yes “R” as well as “D”. Take risks. Compete.

Dan Wednesday, March 19, 2008 at 3:10 PM PT

I think the point people are making is that India has NOT been very innovative. You should read more of the discussions on this site.

Sramana Mitra Wednesday, March 19, 2008 at 7:13 PM PT