India ranked top position among soft electronics market, in-fact Our Bill of Import for electronics in 2nd largest after Oil. Indian Government is taking about In-House electronics manufacturing or “Make in India” campaign. But production is fuelled by R&D results. What about R&D in India and for Indian consumer Market. When would we expect multi-national companies to set-up their R&D set-ups in India and when products designed in India will hit International market. In this article ahead we tried to figure out such questions in Embedded System Design Companies in India.
R&D in India’s innovation system is performed by at least three broad actors: government (includes government research institutes), business enterprises and in the higher education sector. When we talk about R&D in embedded industry segment government accounts for over 63 per cent of the total R&D performed within the country although the share of government has tended to come down over time. This has been accompanied by an increase in R&D investments by business enterprises which now account for about 30 per cent- a significant increase from just 14 per cent in 1991. Increase in the share of R&D performed by business enterprises is generally considered to be a desirable trend as they tend to implement or productionlize the results of their research rather quickly than the government sector where much of the research does not fructify into products and process for the country as a whole. The MNCs in India have started setting up their secondary R&D centers for noncore work in tier-II locations in India such as Madurai, Chandigarh, Baroda, Coimbatore and Bhubaneswar as these are 40 to 50 per cent more cost-effective than Tier-I locations such as Bangalore, Pune or Chennai. Looking ahead, we can expect a 10 to 15 per cent growth in the next couple of years in R&D in India in engineering and embedded systems. The new companies that are being established were initially into sustenance and are now focusing more on innovation and leadership, which is completely different from what they actually do. Of course, there are some roadblocks too that India needs to overcome in order to enjoy a smooth ride as an R&D hub. Companies like Samsung, Intel and AMD are facing talent crunch in their R&D centers in India, making them turn towards Indian universities for talent. In IT India is home to about 200 wholly-owned Centers of multinationals that deliver pure-play IT and ITeS services. The American semiconductor major Texas Instruments (TI) set up a R&D facility in Bangalore in August 1985 and became the first global technology company to establish its presence in India. Ever since, India has been an integral source of intellectual property for big multinationals. The other very important aspect of Indian R&D is its growing domestic market for embedded equipments. This is allowing multinationals to innovate products based on this market, which is extremely cost conscious, and then take it out to the rest of the developed world having leveraged the frugal engineering aspects. Another non-trivial advantage of setting up a Centre in India is its adherence to IP laws compared to some other countries in the region. Embedded industry in India is envisioned a gradual growth, it makes complete business sense for the technology companies to understand this market well and build R&D capabilities locally in order to serve the domestic markets strongly with suitable products and solutions. Second factor is steady emergence of the overall ecosystem. Beginning with the presence of large number of technical universities and talent that comes out of these colleges, there is growing expertise in the engineering and service base in the country. The technology brain-drain which was prevalent earlier is no more an issue. This has helped to retain the experienced talent within the country, which is getting capitalized by this growth. In short we can say that, There is enough quantitative evidence to show that number of foreign R&D Centers in India have shown significant increases in the post reform period although there exists some doubts on the financial size of R&D services that are exported from the country. Development of new technologies for global and regional markets is more important for R&D centers than modifying/ adapting technologies for local market needs or manufacturing requirements. In that sense, the activities of these R&D centers are more ‘knowledge augmenting’ than ‘knowledge exploiting’. Availability of quality scientists and engineers at considerably reduced compensation levels compared to their home countries is one of the important determinants of their location in India. All kinds of research in being performed in the embedded R&D centers in India including high end work in basic research, product design and development, focus on outputs in the form of patents and new and modified products. Over time much (ranging from 50 to 66 per cent of the total based on US patenting) of the industrial innovations recorded in India are the result of R&D projects conducted by these centers Therefore it is certainly not a low end operation. It is possible, however, that most of the R&D centers are primarily performing the more labor-intensive parts of a large R&D project with only a few implementing the entire R&D projects. The foreign R&D centers seem to have become the locus for creating ‘reverse innovations’-defined as innovations that are first created in India by these centers and then exported back to their parent firms for use both in developed and developing country markets. The projects performed in these centers are small, on average, with short-term horizons of less than 2 years. The linkages of these R&D centers with local enterprises and institutions are rather limited; both for performing R&D and for solving research problems, they seek significantly more support from the global business units of the MNC. So knowledge spillovers for the local economy emanating out of the activities of these centers may not be non-existent but remains rather limited.
Mr. Sanjay Gupta, Director R&D Automotive and MCU
Freescale Semiconductor India As per Mr. Gupta, R&D is very essential in any segment. It is the base of innovation and growth. India in the last decade has grown as a R&D hub and is presently attracting a lot of investment. Overall R&D globalization through in-house R&D centres in emerging economies (majorly India and China) stands at $29 Billion, engineering and R&D centres in India deliver $11.3 Billion worth of services to their parent companies reveals a recent study by Zinnov. The study estimates the overall addressable R&D globalization and services opportunity at $170 Billion as of 2014. Currently only $55 Billion of this opportunity is addressed globally. India’s share of the addressed market is 33% with in-house R&D centres contributing $11.3 Billion worth of services to their parent companies. So this tells you that there is huge opportunity in this segment and people are investing heavily to capture this growth. When it comes to the embedded segment, R&D is all the more crucial as it fuels innovation and technology advancement. The semiconductor industry is growing at a fast pace and R&D provides the ground to develop new solutions, products and so on. Freescale is constantly investing in R&D and working on various projects to secure Internet of Things, which is one of the major challenges when we talk about IoT. Intent on applying its extensive expertise and proven technologies to address these trends, Freescale recently announced several landmark programs intended to help establish standards and drive industry metrics for IoT security assurance. These initiatives include: • Teaming with the Embedded Microprocessor Benchmarking Consortium (EEMBC) to identify critical embedded security gaps, and collaborate with other consortium members to establish guidelines that help IoT OEMs and system designers better secure IoT transactions and endpoints. Founding members of this coalition will convene in May at the second annual IoT Developers Conference in Santa Clara, California. • Establishing Freescale Security Labs – Centers of Excellence (CoEs) at Freescale’s headquarters and other locations worldwide, where the company, its partners and customers will focus on enhancement of IoT security technologies spanning from the cloud to the end-node. Alongside these CoE’s is the commitment to allocate up to 10 percent of the company’s annual R&D budget on IoT security technologies. • Creating a program dedicated to educating start-ups on IoT security best practices and providing best in class security support through Freescale’s partner ecosystem. Further talking about technological corecompetencies in R&D he said, we have R&D centres in India, operating out of three offices – Noida, Hyderabad and Bangalore. We do a lot of indigenous R&D work here and both for the global and the Indian market. Our R&D team here primarily focuses on automotive and digital networking. The centres primarily focus on creating innovative designs for applications and solutions and a lot of Freescale’s core products have been developed out of the India Design Centre. Innovation being at the heart of Freescale, we will continue to focus on producing cutting edge technologies out of these centres. We have three R&D centres in India and it concentrates on indigenous requirements and international requirements. These centres are focused on producing cutting edge technologies. As far as opportunities are concerned, it completely depends upon our partner’s and customer’s need and demands.
Some developments in India Embedded R&D Sector
Samsung India R&D develops GALAXY S6 and GALAXY S6 edge
Samsung India R&D has developed software for Galaxy S6 and Galaxy S6 edge smartphone with respect to application and modem processor. The software development that has made Galaxy S6 device the most powerful smartphone in the world. Expert engineers in multimedia team have enhanced camera experience in S6 with HDR and Virtual Shot. In addition, a large part of internet browser, personalized themes and fast speeds with download booster that combine LTE and Wi-Fi data for apps has been developed and built by the Indian R&D team.
Intel to invest over USD 120 million in its India R&D centre
Intel Corporation announced that it will invest over USD 120 million in consolidating its existing research and development infrastructure in Bangalore. Intel has a large campus at Sarjapur Ring Road with two buildings called SRR1 and SRR2. The new building, SRR3, will cover 18 acres of land and comprise of two buildings. The estimated completion date for SRR3 is early to mid-2015. Intel India has been involved across servers, PCs like All in Ones, 2 in 1s, smart phones, tablets and Internet of Things. The core competencies of Intel India include CPU, System-on-a chip, platform, software and graphics. Intel’s upcoming facility will be a global centre of excellence for chip design. Some of the highlights of the venture are: 1. India is Intel’s largest non-manufacturing site outside the US 2. Over USD 2 billion invested till date 3. New facility will be a global centre of excellence for chip design Xiaomi close to buying 20,000 square foot R&D center in India Chinese smartphone maker Xiaomi is very close to setting up an R&D unit in India. India Head Mr. Manju Jain, the office space covers an area of 20,000 square foot and will be used for the company’s R&D activities pertaining to India. This includes things like new themes for the company’s India theme store and other content for its users here.
Dell’s India R&D team big contributor in new servers
One of the key innovations by the team is a Near Field Communication server management solution that uses mobile devices to manage, monitor and set up servers. Dell India’s R&D centre, with its pool of 2,500 engineers, has played a big part in the development of the Dell PowerEdge 13th generation server portfolio, which was launched globally on Tuesday. The Bangalore Design Centre, which has over 1,000 engineers, contributed 60 per cent to overall server systems management software and 100 per cent on validation engineering and product documentation. With over 120 patents, Dell India R&D has stepped up the pace of innovation and IP creation, from producing 1-2 patents a year five years ago to 15- 20 patents every year. Founded in 2001, the Dell India R&D centre has grown from a remote pool of engineers who provided support and sustenance work in software development and testing to the company’s second largest product development centre globally.
Conclusion
Indian Embedded market has a good scope for R&D and its it is critically required in view of increasing demand and influential global trends but the major problem is, India does not have any explicit policies to promote R&D although there exists in the country a number of policy instruments, fiscal and otherwise, for promoting FDI and incentivizing the conduct of R&D. One needs to explore how other countries have used policy instruments to enhance the spillover benefits of MNC R&D activities in India.
