Impact on Research & Development
India has emerged as the hottest destination for multinational companies (MNCs) starting or relocating their research & development (R&D) centres over the past two years. China comes next, though it continues to be the leading destination for MNCs relocating their manufacturing operations.
These are some of the underlying trends that emerge from the Ernst & Young Transfer Pricing 2005 global survey that polled 348 multinational parent companies and 128 subsidiary corporations in 22 countries.
Around 10% of the respondents reported either new or relocated R&D operations in the past two years. Of this, 27% identified India as the leading relocation destination for R&D, followed by China with 17%.
The best-known Indian R&D companies are in pharmaceuticals and biotech sectors. Companies such as Ranbaxy, Dr Reddy's Laboratories, Sun Pharma and Biocon and Shanta Biotech are attracting interest from companies in the US and Europe, which are seeking a strong platform for development skills.
Following in the footsteps of the information technology enabled services (ITeS) industry, which put India on the world map, yet another sector -- Research and Development (R&D) -- is witnessing increasing vitality and growth. More than 125 Fortune 500 companies have opted to have their R&D base in India. The reasons for this are obvious. India's wealth of scientific talent is unmatched in the world.
• India conducted its inaugural test flight for Saras, the country's first indigenous civilian light-transport aircraft, in August 2004.
• 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, according to the Department of Biotechnology.
• The country has already started commercial cultivation of genetically modified cotton in Gujarat and some southern states, with several other crops in various stages of getting approvals for commercial plantation.
• India is the only developing country and sixth worldwide to manufacture and launch its own satellites in geo-stationary orbit and even plans a moon mission in 2008. It has also launched satellites for foreign customers such as Germany and Korea.
Having proved its scientific mettle, India has begun to appear on the outsourcing radar with a monotonous regularity. Gone are the days when international companies retained R&D jobs at home and sent abroad work that were clerical and of a repetitive nature. Now, even innovation and design work have begun to move offshore, especially to India. More than 100 Fortune 500 companies — including Delphi, Eli Lilly, General Electric, Hewlett Packard, DaimlerChrysler and others — have put up R&D facilities in India over the past few years.
• GE's John F. Welch Technology Center in Bangalore is the company's largest such facility outside the US. With an investment of US$60 million, it employs 1,600 researchers and plans to raise the number of staff to 2,400.
• The DaimlerChrysler Research Centre in Bangalore is involved with fundamental and applied research in avionics, simulation and software development.
• Boeing is working with HCL Technologies to co-develop software for everything from navigation systems and landing gear to the cockpit controls for its upcoming 7E7 Dreamliner jet.
India has emerged as the hottest destination for multinational companies (MNCs) starting or relocating their research & development (R&D) centres over the past two years. China comes next, though it continues to be the leading destination for MNCs relocating their manufacturing operations.
These are some of the underlying trends that emerge from the Ernst & Young Transfer Pricing 2005 global survey that polled 348 multinational parent companies and 128 subsidiary corporations in 22 countries.
Around 10% of the respondents reported either new or relocated R&D operations in the past two years. Of this, 27% identified India as the leading relocation destination for R&D, followed by China with 17%.
The best-known Indian R&D companies are in pharmaceuticals and biotech sectors. Companies such as Ranbaxy, Dr Reddy's Laboratories, Sun Pharma and Biocon and Shanta Biotech are attracting interest from companies in the US and Europe, which are seeking a strong platform for development skills.
Following in the footsteps of the information technology enabled services (ITeS) industry, which put India on the world map, yet another sector -- Research and Development (R&D) -- is witnessing increasing vitality and growth. More than 125 Fortune 500 companies have opted to have their R&D base in India. The reasons for this are obvious. India's wealth of scientific talent is unmatched in the world.
• India conducted its inaugural test flight for Saras, the country's first indigenous civilian light-transport aircraft, in August 2004.
• 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, according to the Department of Biotechnology.
• The country has already started commercial cultivation of genetically modified cotton in Gujarat and some southern states, with several other crops in various stages of getting approvals for commercial plantation.
• India is the only developing country and sixth worldwide to manufacture and launch its own satellites in geo-stationary orbit and even plans a moon mission in 2008. It has also launched satellites for foreign customers such as Germany and Korea.
Having proved its scientific mettle, India has begun to appear on the outsourcing radar with a monotonous regularity. Gone are the days when international companies retained R&D jobs at home and sent abroad work that were clerical and of a repetitive nature. Now, even innovation and design work have begun to move offshore, especially to India. More than 100 Fortune 500 companies — including Delphi, Eli Lilly, General Electric, Hewlett Packard, DaimlerChrysler and others — have put up R&D facilities in India over the past few years.
• GE's John F. Welch Technology Center in Bangalore is the company's largest such facility outside the US. With an investment of US$60 million, it employs 1,600 researchers and plans to raise the number of staff to 2,400.
• The DaimlerChrysler Research Centre in Bangalore is involved with fundamental and applied research in avionics, simulation and software development.
• Boeing is working with HCL Technologies to co-develop software for everything from navigation systems and landing gear to the cockpit controls for its upcoming 7E7 Dreamliner jet.