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Last Updated: April-June 2008
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India is continuously attracting people, ideas and technologies from
around the world, owing to its world class educational institutions,
a robust intellectual property regime and a rich talent pool - at
a very competitive cost. Given the world's 3rd largest scientific
and technical manpower, India's research
and development capability spans a wide spectrum of industries,
and its science and technology
grows well above the global average. Indian output of science - measured
by the quality and quantity of Science Citation Index papers - has
also been growing at a CAGR of 8 per cent in the past three years
(the world average was 4 per cent). Significantly, the country also
aims at putting training
and education of quality talents at a prominent strategic position. And, with MNCs setting up India centres and offshoring design tasks to India, it is also emerging as a design
and engineering hub - predicted to touch US$ 43 billion in 2015 (from US$ 3.2 billion in 2005). |
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| Design and Engineering |
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Indian designers have caught the attention of leading companies from countries like US, Germany, UK, France, Italy, Japan. While MNCs like Whirlpool, GE, LG, Philips Bosch, Dell Computer Corp., Ford Motor Corp., Toyota Corp., Ferrari, Honda Motor Corp., Rambus Inc. and Wind River Systems Inc are setting up India centres, others like Reckitt, Boeing, Airbus are offshoring design work to Indian design houses.
India is emerging as a global design hub as MNCs increasingly outsource industrial and engineering design tasks to diverse industrial sectors like semiconductors, aerospace, automotive, farming equipment, power generation and consumer electronics among others.
- Caterpillar (construction machinery) has set up its design hub at Chennai.
- Intel (semiconductors) is working on chipsets in Bangalore.
- Apple has approached National Institute of Design (NID) to work on a handheld computing device.
- Ranbaxy (pharmaceuticals) is working on new shapes and colours for the capsules.
- Some Nokia (telecommunication) mobiles are designed here.
- Whirlpool Corp. (consumer durables) is asking Indian design houses to develop new washing machines.
Automobile Design
India is one of the few countries outside the US, Europe, Japan and Korea with a proven capability to design and build automobiles.
- Tata have designed and developed its small cars, Nano and Indica, in India.
- Maruti Udyog engineers after working on designing Swift, SX4, Zen Estilo and Concept A-Star, are likely to design Swift Sedan, Splash and Kizashi.
- Bangalore's Harita Infoserve Ltd. is developing interior parts and conducting computer tests on components for General Motors Corp.
- Plexion Technologies has worked on the interior design and windows for a DaimlerChrysler bus.
- Mahindra & Mahindra have successfully designed and built its car, Scorpio as also multi-utility farm vehicle, Shaan, which has captured 6 per cent share in US market.
General Motors, Hyundai, Toyota, Ford Motor, Ferrari, and Honda Motor are all boosting Indian outsourcing, as are key component makers such as Robert Bosch, TRW Automotive, Visteon, and Collins & Aikman. By 2010, the Indian automotive design and engineering services industry will cross US$ 1 billion (from US$ 270-300 million in 2005); and the employee strength of India-based automotive design vendors will reach 40,000 (from about 12,000 in 2005).
Aviation Design
Design in aerospace is another area in which India has tremendous potential to grow. Engineering and design services which have shown tremendous opportunities to being outsourced to India include control system design, embedded development, high level aeronautical system design, simulation, testing devices, cockpit equipment support software, air traffic management systems, and composite structuring.
- HCL Technologies is working on various systems like flight management and landing gear for Boeing 787. It has also worked on the Airbus A 380, with their tier 1 suppliers.
- Infosys Technologies has worked on designing part of the Airbus A 380 wing along with Triumph Composite Systems.
- Apart from Airbus, Boeing has also been outsourcing design work to Infosys. The tech major also works with Spirit Aerospace, which was earlier part of Boeing.
- Boeing has entered into an agreement with the Indian Institute of Science, Wipro Technologies and HCL Technologies, to develop network technologies.
Aerospace majors like Lockheed Martin, Boeing, Thales, Pratt & Whitney, Bombardier, Rolls Royce, among others have all shown a keen interest to participate in this segment. National Association of Software Service Companies (NASSCOM) estimates the Indian aerospace technology outsourcing market to reach US$ 1 billion by 2009 from US$ 150 million in 2006.
And with the government making it mandatory for aircraft manufacturers to source 30 per cent of the value of the aircraft from Indian vendors, and the attraction of expected contracts in both defence (US$ 10 billion) and civilian aircraft ( US$ 75 billion in next 10 years), this segment has received a further boost for growth.
Semiconductor design
The US$ 3.25 billion semiconductor design services market in India is expected to reach US$ 14.4 billion by 2010, according to a report by ISA-Frost and Sullivan. Most of India's high-end design activities are being conducted at captive centers, with approximately 50 percent of the design activities being carried out in the areas of wireless and wired communications. Consumer electronics represents the next-largest application.
The nearly 200 semiconductor companies operating in India include Texas Instruments, IBM Microelectronics Inc., Advanced Micro Devices Inc. (AMD), Intel Corp., Broadcom Corp., Cisco Systems Inc., Microsoft Corp, HCL Technology Ltd., ST Microelectronics, Sankalp Semiconductor, among others.
With the Indian electronics production expected to reach US$ 58 billion by 2010 from US$ 10.99 billion in 2005 (a CAGR of 26.4 per cent), the chip design segment is witnessing huge growth. The India's chip design industry market revenue is expected to reach US$ 2.1 billion by 2010, rising at a CAGR of 29 percent, up from US$ 596 million in 2005, iSuppli Corp. (a market research firm) predicts.
Engineering services
Engineering services has the potential to become the next big thing in India after IT and BPO. According to NASSCOM and Booz Allen Hamilton study, while the global engineering services outsourcing (ESO) market is expected to grow from US$ 10-15 billion in 2006 to US$ 150-225 billion in 2020, India's share in global ESO market is estimated to increase to 25-30 per cent by 2020 from 12 per cent in 2006. This would take India's ESO market size to US$ 50 billion.
ESO includes product design, research and development and other technical services across sectors like automotive, aerospace, hi-tech/telecom, utilities and construction/industrial machinery.
This industry has already been showing robust growth rates. Engineering services and products exports have grown from US$ 3.14 billion in 2004-05 to US$ 4 billion in 2005-06 and further to US$ 4.9 billion during 2006-07. In fact, export of engineering design services alone is estimated to account about US$ 1.4 billion.
In fact, in recognition of the standard of engineering education in the country, India has been inducted into the prestigious Washington Accord which will enable engineering degrees of India being accredited in U.S. and recognised internationally.
Frugal Engineering Hub
As Stephen J Rohleder, COO, Accenture says, ‘The innovation that comes out of India is going to constantly challenge not just the price points but the thinking of the western world.’
With Tata’s Nano making it among Times's 'dozen most important cars of all time starting from 1908 to the present', global majors have been lining up across diverse sectors like automobile, mobiles and computers to utilise India's competitive advantage.
While Renualt, Nissan, Hyundai, Ford, Fiat and Honda are looking to build a small car in India, transnational companies like Nokia, LG, Motorola, are increasing their investments to enter this burgeoning market.
Government Initiatives
The Designs Act 2000 has put in place a framework for documentation, classification, representation, registration, acceptance, inspection, cancellation, certification and legal redressal. The Union cabinet has also approved the National Design Policy in 2007 with the aim to globally position and brand Indian designs and making ‘designed in India’ a by-word for quality and utility. The policy also envisages:
- Setting up of specialized Design Centres of ‘innovation Hubs’.
- Enhancing the status of the National Institute of Design (NID) as a global centre of excellence and setting up two-three undergraduate design centres.
- Launch the Good Design Mark to promote domestic designs.
- Setting up of new institutes and sector-specific design education centres.
- Setting up an India Design Council (IDC).
An ISA-commissioned Frost & Sullivan study predicts that revenue from the Indian design market will grow from US$ 3.2 billion in 2005, to US$ 43 billion in 2015 – making for a CAGR of 30 per cent.
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| Science and Technology |
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Science and technology has been in the forefront of transforming the Indian economic structure helping India evolve as a globally competitive economic powerhouse. With the world’s third largest scientific manpower, Indian science and technology are growing well above the global average.
While the Indian output of science, as measured by the quality and quantity of Science Citation Index (SCI) papers, has been growing at a CAGR of 8 per cent in the past three years, the world average was only 4 per cent. Its technical workforce has also increased rapidly –moving from one million to two million in just three years. Instrumental here are India’s world-class institutions: 162 universities award 4,000 doctorates and 35,000 postgraduate degrees; coupled with 40 research laboratories run by the Council of Scientific and Industrial Research.
Space Technology
India is one of the few countries with expertise to conceptualise, design and manufacture satellites and the capability to launch them into space. In fact, it has the largest constellation of remote sensing satellites in the world. Also, the Indian Space Research Organisation (ISRO) is the world's third non-US supplier of 1-metre imageries and holds nearly 25 per cent of the US$ 120-million global free-play imageries market.
2007 achievements: Successful orbiting and recovery of a space capsule (prelude to the development of space recovery capsule), launch of Cartosat-2 (a remote sensing satellite with resolution capacity below 1 metre), and successfully testing indigenously developed cryogenic upper stage among others.
Future projects: a lunar mission, a project for manned space outing around 2015, development of space recovery capsule (which would lay the foundation for future returning missions) and establishing indigenous regional GPS by 2012 among others.
Renewable Energy
- India has the largest number of biomass gasifier systems in the world
- India is the 3rd largest producer of solar photovoltaic cells in the world
- India is the world's 4th largest wind power user.
- India has the 9th largest solar thermal power generation in terms of million units per sq. m.
India was the first country to be accorded the status of a Pioneer Investor and was allocated an exclusive area in the central Indian Ocean by the UN for exploration and utilisation of resources. India has already sent 13 scientific research expeditions to Antarctica and has two permanent stations in Antarctica. In May 2007, India got approval from the Antarctic Treaty Consultative Committee (ATCM) to construct its third station at Larsemann Hills in Antartica.
Intellectual Property
India – with one of the most stringent patenting regimes after Japan and Germany – has been granting an average 50 patents a day – comparable to advanced intellectual property regimes such as the US and the EU (as a proportion of patents granted to the number of applications). Even the trademarks registered touched a record 326,000 during 2004-07, from around 167,000 in the previous years.
The prominence of India in the Intellectual Property Regime can also be seen in the Indian Patent Office being granted the prestigious status of ‘International Searching Authority’ (ISA) by the World Intellectual Property Organisation (WIPO). This puts India in the 14-member, exclusive group of countries recognised as world leaders in the field of IPRs.
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| Research & Development |
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India is attracting a continuous flow of people, ideas and technologies from around the world, owing to world class educational institutions, a robust intellectual property regime and a rich talent pool of technical manpower available at a very competitive cost.
With 2.5 million IT, engineering and life sciences graduates, and the world's 3rd largest scientific and technical manpower, India's research and development (R&D) capability spans a wide spectrum of industries: agriculture, biotechnology, energy, nanotechnology, information technology, space, defence, automobiles, aviation, pharmaceuticals, theoretical physics, and statistics among others.
Global R&D hub
- Microsoft has built its largest development centre outside US in India.
- GE's centre in Bangalore is the company's largest research outfit outside the US.
- Dell has established its biggest research and development centre outside the US in Bangalore.
- The Daimler-Chrysler Research Centre in India is one of three centres the company has outside Germany.
- SAP Labs India is the largest R&D hub and support presence for SAP outside Germany.
- Royal Shell Group has its second largest R&D centre - Shell Technology Centre - in Bangalore.
- India is the largest R&D centre for Cambridge Silicon Radio (CSR) -- a provider of personal wireless technology -- outside the UK.
- The University of Oxford will set up its first research centre outside UK in association with the Confederation of Indian Industry in India.
- Intel's largest R&D centre outside the US is located in Bangalore.
- Sandvik AB, the Swedish precision tools and mining equipment major, will make India its global hub for knowledge sourcing.
Achievements
- India is the only developing country and the 6th worldwide to design, manufacture and launch its own satellites.
- About 165 institutions in the country are engaged in genetic engineering research, comprising 55 in transgenic work, 25 in therapeutics and 85 in basic research.
- India is one of the few countries that have developed stem cell lines as part of the stem cell network.
- In the pharmaceutical sector, India has the largest number of FDA approved plants after the US.
- Indian Institute of Technology (IIT), Chennai, has developed the world's first nano-material based water purifier.
- In the automobile segment, R&D expenses of six auto companies of Indian origin increased 70 per cent to US$ 351.45 million in 2006-07 - from US$ 112.49 million in 2003-04.
Road Ahead
According to Batelle, the world's largest independent research and development organisation, Indian raised its R&D spending from US$ 36.11 billion in 2005 to US$ 38.85 billion in 2006 and US$ 41.81 billion in 2007.
And, in 10 years, the global R&D activity will be split into thirds between the US, EU, and Asia - dominated by China and India - in terms of efforts, funds and activity.
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| Training and Education |
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'There's no question about the availability of talent in India’, says John Thompson, CEO, Symantec.
Foreign Institutes in India
Promoting their executive education, the deans of elite, overseas business schools have come to India – seeking a big revenue boost, and a chance to understand the concerns of a developing economy.
- Fuqua School of Business at Duke University has tied up with IIM Ahmedabad to offer a global leaders programme.
- The Indian arm of Citigroup is working with The Tuck School to train its executives.
- IIM Bangalore offers an advanced master's programme, in collaboration with the City University of Hong Kong, SDA Bocconi-School of Management in Italy and Anderson School of Business Los Angeles, USA.
- Harvard Business School will start an executive education programme in India next year, targeting companies with global ambitions to address what it believes is the typical challenge in the booming economy--managing hypergrowth.
- France-based ESCP-EAP European School of Management plans to hold executive education programmes for corporates in India.
Indian Institutes go Abroad
A number of Indian B-schools have established offshore campuses and the Middle Eastern nations and Singapore are clearly emerging as favourite destinations.
- Xavier Labour Relations Institute (XLRI) in Jamshedpur offers an executive education programme in Dubai and now has a campus in Singapore.
- Institute of Management Technology (IMT) and SP Jain Institute of Management and Research (SPJIMR) also have campuses in Dubai.
- The Management Development Institute (MDI) in Gurgaon is in advanced talks with the government of Qatar to open a branch in the capital city of Doha.
- Entrepreneurship Development Institute of India (EDI), which has already opened shop in Laos, Cambodia and Vietnam, is in the process of establishing more centres in Myanmar and Kazakhstan.
Specialised training institutes
- Reuters India, the financial data and news service provider, is in talks with an institution with expertise in financial markets for co-branding a certification course in niche areas.
- Oil firms have joined hands with the Government to set up petroleum universities, which could cater to the high demand specialised engineers and managers for the sector. For instance, the recently launched Pandit Deendayal Petroleum University (PDPU) at Gandhinagar is promoted by the Gujarat State Petroleum Corporation.
- Animation training, which earlier had only a Toonz or a Crest school, now has names like Anitoons in Delhi, ICAT in Chennai, Zed in Mumbai and many more dotting the graphic landscape.
- Aviation training institutes like Kingfisher Training Academy (KTA) plans to add 12 centres; and to open schools in Colombo and the Middle East.
- Bharti Resources, the subsidiary of Bharti Enterprises, has tied up with the Global Retail School (GRS) to impart training to jobseekers in this sector.
Changing with the Times
Business schools are focussing on making their curricula more global and contemporary.
- IIM-A offers courses in mergers & acquisitions, social entrepreneurship, and something called India Unincorporated, which deals with regulatory environment, savings and investment trends in India, alternative investments like gold and property and need for new regulations in stock market among others.
- IIM-Lucknow (IIM-L) offers a course on carbon markets, given that clean development has become a major issue.
- Indian Institute of Foreign Trade (IIFT) is paying more attention to original research to offer courses that are better grounded in contemporary issues. It has a Centre for WTO Studies, a Centre for International Trade in Technology, a Centre for SME Studies, and now a Centre for Consumer Studies.
- Symbiosis Institute of Business Management (SIBM) is collaborating with leaders in specific industries to tap contemporary body of knowledge. For instance, it has a tie-up with the Institute of Company Secretaries of India (ICSI) that has resulted in two modules designed for its first-year students of finance. The modules cover regulatory environment and compliances.
- Exchange programmes are also popular tools of creating more globally-oriented B-school graduates. The Faculty of Management Studies (FMS) has exchange programmes with not one or two, but 11 institutions around the world, including the University of California, Berkley, Insead of France, and University Blefield, Germany.
Government Proposals
The Government plans to set up three new IITs in Bihar, Rajasthan and Andhra Pradesh over the next five years, two new Indian Institutes of Science Education and Research (IISERs) in Bhopal and Thiruvananthapuram and two new Schools of Planning and Architecture in Vijayawada and Bhopal. And, aiming at improving higher education, the Government also proposes 14 'world class universities' across India.
In a bid to bring more money to the sector and change the funding pattern, the Human Resource Development (HRD) ministry is actively considering allowing private participation in elementary education to start with. A Bill has already been placed before the Parliament to allow 100 per cent FDI in higher education. The government is also thinking of giving some of the education cess funds for Sarva Shiksha Abhiyan (SSA) to the corporates to achieve the flagship programme’s objectives.
Eleventh Five-Year Plan (2007-2012)
The Eleventh Year Plan seeks to strengthen the nation with talented people, making scientific and technological advancement and innovation an important driving force for economic and social development, putting education and training of quality talents at a prominent strategic position while striving to build an innovative country with rich human resources. It emphasises on:
- Investing more in education by ensuring higher financial expenditure for education so as to gradually increase the proportion of financial expenditure for education in GDP to 4 percent.
- Popularisation and consolidation of nine years of compulsory education in rural areas and eliminate tuition and incidental fees for rural students during the compulsory education period.
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| Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same. |
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