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India: A Nation Develops

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Indian holding Intel chip

India had 200 research and development centers belonging to multinational corporations as of early 2007.

Credit: Financial Times

India is making the transition from a global outsourcing center to a global innovation nexus, but lingering challenges include persistent infrastructure difficulties and an educational system in need of improvement. Still, the establishment of multinational research and development (R&D) facilities in India and China is a significant step forward, according to General Electric chief innovation consultant Vijay Govindarajan. "We are at the cusp of a new paradigm in which innovation will happen in India and China first and then it'll go to the rich countries," he says.

More than 200 multinationals currently have India-based R&D centers that plan to harness the ability of the vast pool of homegrown engineers and expatriate Ph.Ds working in the West who are eager to come home. These R&D facilities initially supported their Western equivalents, but recently they have been entrusted with R&D of products for the global market.

Google India's Prasad Ram notes that there is an opportunity inherent in the difficulty of solving technical problems related to product development in India due to the country's diversity and infrastructure shortcomings. "If I can solve challenges in a systemic way here, then I can extend the solution to the rest of the world," he says.

Nevertheless, analysts say the day when India outpaces the global innovation of the United States, Europe, or Japan will not come until the country starts offering large-scale, high-quality master's and Ph.D courses in sufficient numbers.

From Financial Times
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