OWNERSHIP A MUST TO HOLD R&D EDGE

Thanuja BM, Bangalore
Financial Chronicle

Moving up the value chain and being seen as “value centres” rather than mere cost centres is the latest mantra of multinational R&D centres in India, according to Zinnov, a management consultancy firm.

“Several companies are moving towards complete ownership model where the India teams own a part or full products as well. Few of the large companies have almost 90 percent of their teams working on products they completely designed, developed and delivered from their India centres. Small and mid-sized firms that predominantly used India as extended teams have either closed operations or moved on to better engagement models,” said Glen Serrao, engagement manager, Zinnov.

The trend towards complete ownership of products needs to be accelerated for India to maintain its edge in R&D offshoring.

“Distributed engineering teams are not working for new product development and companies that tried doing top-down innovation have failed. Now, companies are moving towards strong local leadership that will facilitate bottom-up innovation,” added Serrao.

Innovation is the key for the continued growth of R&D offshoring in India, said Zinnov CEO Pari Natarajan. Though, there are some innovations happening in products for global focus, more needs to be done if India is to compete with South Korea, China and Taiwan.