India has potential to become R&D hub

Source: The Times of India, Jun 21, 2012

A study says India has become a key contributor in global research and of growth in the Asia-Pacific region, playing host to one-third of top 1000 R&D spenders in the world.

The study done by market advisory firm Zinnov, ‘Global R&D Benchmarking Study: FY2011’ analyzed trends in R&D investments globally.

After witnessing a decline in global R&D spending in FY2010, the study says the FY2011 has seen an increase in spending and the potential for India to be among the top nations for R&D has only gotten stronger.

Commenting on the study, Sidhant Rastogi, director – Globalization Advisory, Zinnov, said: “The sentiment on the role of R&D in driving the future continues to remain positive across geographies, supported by the significant increase in R&D spending in FY2011. Global R&D investments have grown by 8.2% as compared to previous year FY2010. This growth has been primarily driven by organizations in the semiconductor, industrial and consumer hardware and electrical & electronic sectors”.

“India definitely has the right potential to become a key R&D hub, not only in software for which it has gained recognition globally, but also in other verticals such as aerospace, automotive and defense”, he added. One of the key highlights of the report is that there is a talent pool of 220,000 in MNC subsidiaries in the country, and these MNCs have spent $7-7.5 billion on the headcount in India in FY2011 alone. The study also found that the opportunity areas for India to attract R&D investment span over 13 sectors, with software being the most invested-in sector. Global net sales and global R&D spending have grown at 13.55% and 8.2% respectively with the contribution of spend divided across North America, European Union and APAC regions.

The total R&D investment globally is on the rise, and the North America and EU region continue to dominate. The contribution of R&D investment from across geographies is 36% for North American companies, 34% for European Union headquartered companies and 7% for APAC companies. Though the APAC regions contribution (as a percentage of global R&D spend) is seemingly small, what is noteworthy is that within the region R&D investments have increased a significant 28% as against the previous year.