Brand owners boost Indian R&D presence

NEW DELHI: Increasing numbers of major brand owners are enhancing their innovation capabilities in India, reflecting a desire to tap this fast-growing market.

Zinnov, the consultancy, reported that the 1,000 highest-spending firms globally allocated $582bn to R&D in the 2010/11 fiscal year, the Times of India reported.

This constituted an improvement on the $538bn posted in 2009/10, when worldwide expenditure levels slipped from $543bn due to the economic downturn.

Focusing on India, Zinnov stated that 871 multinational corporations possess new product development centres in the country at present.

Such a total can be measured against the figure of 780 recorded in 2008, and means over a third of the 1,000 enterprises boasting the largest budgets are today funding a local R&D unit.

More specifically, the study revealed that a rising proportion of the 1,000 premier businesses that are based outside the US are currently active in India, as 28% now run Indian innovation sites.

Another trend identified in the analysis was that a growing amount of corporations are looking to lower tier, smaller cities for both offices and for staff.

One big issue for these companies, however, is that industry salaries climbed by 13% in 2011, and are expected to rise by a further 12.6% during 2012.

Many operators are also pursuing less on generic research and development projects, instead creating more valuable intellectual property yielding "higher value generation".

"Indian R&D centres today have come a long way," Praveen Bhadada, director of market expansion at Zinnov, said.

"China continues to give us tough competition, but we are confident that the innovative business approach and renewed focus of these R&D centres will hold us in good stead going forward."

Data sourced from Times of India; additional content by Warc staff, 9 April 2012

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