Technological and systematic innovation plays a leading role in motivating fast economic and productivity growth. Innovation provides the channel for the introduction of new and improved products and services to the marketplace and adoption of new or improved production processes with businesses. The National Knowledge Commission's report on innovation observes that not just large but also small and medium enterprises (SMEs) in India are now looking at R&D as their thrust area and main driver of growth and competitiveness.
As per a report by NASSCOM and Booz and Co, the domestic market in India for engineering R&D (ER&D) services is expected to witness robust growth. It is estimated that by 2020 almost 10-15 per cent of the country's total ER&D services market could be generated from its domestic market capturing an estimated returns worth US$ 40-45 billion. Furthermore, the Indian ER&D services market has shown a compound annual growth rate (CAGR) of more than 45 per cent from US$ 1.5 billion in 2004 to US$ 8.3 billion in 2009.
The National Innovation Council (NIC) will create a US$ 221.46 million national innovation fund in two to three months to provide venture capital for early-stage innovations, said Arun Maira, member of NIC and the Planning Commission.
Global R&D Hub
- Stefan Zoller, European Aeronautic Defence and Space Company NV (EADS), Chief Executive (defence & security) stated that, "We will transfer some of our development projects, which we have in Europe for Eurofighter or other military aircraft to India, where we have set up a military research and development (R&D) centre in Bangalore."
- "From our perspective, there is a definite trend where we develop products for the Indian markets. This is not necessarily for Indian companies, but for our global customers who wants to develop products for Indian market," according to GH Rao, corporate vice president, Engineering and R&D services of HCL Technologies. It is also developing base stations to be used in rural area in India for one of its global customers.
- The Indian Bureau of Mines' (IBMs) Modern Mineral Processing Laboratory and Pilot Plant, set up with the assistance of United Nations Development Programme (UNDP) in 1960, is attracting clients from various parts of the world. The Laboratory and Pilot Plant of the IBM in Nagpur is equipped with State of Art facilities to carry out R&D activities and is doing extremely well on its professional front, according to CS Gundewar, IBM Controller General
- Honeywell India has grown from being a US$ 50-million company with about 50 people, to more than US$ 500 million in revenue and 11,000 employees. The company's area of operations include aerospace, automation, transportation and specialty materials, including the recently-developed green fuel that does not require cars to change their engines.
- GXS, a business-to-business e-commerce services provider, is planning to make India a major research and development (R&D) hub for the company by strengthening its R&D team through an addition to its workforce.