COMPARATIVE STUDY OF – INDIA, CHINA VS. USA

Ashok Bhatla - MS, PMP –

Technology ConsultantASHOK.BHATLA.WRITER@GMAIL.COM

TRENDS IN R&D MANAGEMENT

Overview

High Tech R&D is the main component of a nation’s innovation and competitiveness.

Globalization and Outsourcing which started in the manufacturing sector is now impacting the R&D sector also.

Even high Tech R&D is being conducted in Asian countries

So what are the market drivers for setting up a R&D facility to another location.

This paper uses a simple Trending Model to compare the R&D Management in US vs emerging economies of India and China

Some interesting Info

China overtook Japan to become the world’s 2nd largest economy.

“Five years from now, you’ll see some leading technology being developed first in India or China, and flowing back to the West.”

“It is difficult for researchers in Palo Alto or Cupertino to imagine a need for a keyboard for India’s 23 different languages.”

China will have more Ph.D.s in 2010 as compared to US.

All major MNC’s like Microsoft, Cisco, Siemens, GE have their Research operations in India.

World’s cheapest 2000 dollar car designed and developed by Tata Motors in India

INNOVATION RANKINGS

World Economic Forum Report

MARKET DRIVERS FOR GLOBALIZATION OF R&DCollaboration with local manufacturing companies

Collaboration with local manufacturing companies

Shortage of engineers and scientists in Western nations

Shortage of engineers and scientists in Western nations

Gain entry into foreign

markets

Gain entry into foreign

markets

Market Drivers for Globalization of R&D

Market Drivers for Globalization of R&D

Tax incentives and other subsidies

Tax incentives and other subsidies

R&D MANAGEMENT IN USWorld’s leading R&D workshop – Plasma Displays, I Phones

Creativity, Entrepreneurship and University, Industry, Govt trio

Average R&D Spending as % of GDP has been around 2.5%

33 national labs NASA, NSF, Los Almos, Sandia

US share of global R&D varied between 35 to 40 % from 1996 to 2005

R&D MANAGEMENT IN INDIAMajority of old R&D efforts concentrated in Defense and Space Research

In 21st century, many MNCs opened their development centers in India – concentrating in the field of software, telecom and pharmaceuticals

Microsoft, Cisco, Eli Lily, Google are some examples

Infrastructure is still an issue. India spends less than 1% of GDP on R&D – while Western countries spend an average of 3 %

Although lots of FDI in the Research sector, collaboration between Universities and Industries is missing.

On average, no. of Researchers per million inhabitants has remained flat in India. (may be due to huge population growth)

R&D MANAGEMENT IN CHINAAs China is world’s manufacturing workshop and the largest market, Companies want to setup R&D next to the production.

Huge growth in R&D spending from 0.6 % to 1.4 % in the last decade. Investments by Govt in all levels of the system

Infrastructure is improving. Employee Creativity is an issue. IP Protection is another cause of concern.

More Ph.D. than US in 2010

China’s global share of R&D increased from 2 % to 7.5 % from 1996 to 2005