Even though we have the world class engineering talent and the enormous market size, why are we stuck as backend desk for MNCs?

Miscellaneous
#1

##What are we lacking?

There has definitely been a huge growth in the IT & services sector over the last decade, primarily being the backend desk for global majors. We are still doing pretty much the same thing – offering code-based services to the world, mostly white-labeled. Companies like Infosys, Wipro and TCS made thousands of crores with this model. But, these companies never attempted to develop OEM “products” like Salesforce, SAP, Oracle, Microsoft do. In the meantime, our engineers are toiling in various MNC offices across India contributing to R&D of world class products and making the MNCs create orders of magnitude wealth for their shareholders.

In a consumer-centric economy, roughly 80% of technology based products or gadgets used by an average Indian belongs to companies that are either Chinese or Japanese or Korean or any other country. To be specific to the consumer durable, electronics, automobiles and technology gadget industry, home grown companies hardly make themselves counted amidst the plethora of imported brands. Even more, there is not ONE SINGLE Indian product brand that commands a premium perception within this segment. 68 years of independence and we haven’t been able to produce a single Indian product brand that has a global appeal.

A global report commissioned by the Queen Elizabeth Prize for Engineering has revealed that while just 20% of 16 to 17 year-olds from the UK and 30% from the USA are interested in an engineering career, in India the rate is as high as 80% - the highest in the world. We need more entrepreneurs and corporate rethinking about value creation. Indian companies need to consider investing in brands as a long term benefit and stop looking at it as a cost. Creating a global product brand is a major challenge facing Indian companies. While we can still debate on the lack of infrastructure, there is no excuse for not being able to design products indigenously.

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Source: Boston Consulting Group

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#2

Very well said. Bottom line lies in grooming the individuals right from the high school or college. Most of them are lured into going out of the country for their masters or join MNCs for kick starting their career. If this can have a turn around, we can start being proud of branding and selling global products out of India. Our country cannot be in a better position than being the only country that is churning out young and intelligent graduates.

The trend is changing however, with the Gen-Xs and Gen-Zs opting out to start off on their own instead of lucrative offers. The risk taking and entrepreneurial attitude is setting in. Only awareness and education can leverage this trend faster.

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#3

The brain drain has become brain gain. So, we should not be worried about that part. As you have said, the appetite for risk taking is definitely changing for good, as we see more and more start up stories like never before. But, we still lack what I call innovation infrastructure, a combination of investment, government, social and entrepreneurship compared to counties like US, China, Israel etc. We must think about products and brands beyond services and body shopping.

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#4

I agree 100% with you on the innovation, entrepreneurship. When I read about Smartron, I believe that you can set the ball rolling in this regard (“Make in India”). Its always who is going to be first and the first one always has the edge. Even in some MNCs here in India, they drive innovation in the wrong direction and not from the angle of passionately creating a “Blue Ocean”.

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#5

I think Engineers are ready. They don’t care which company they are innovating for. The key is to have enough local product companies focused on innovation and building products for global markets. This would create domino effect. The opportunity is so huge that it has room for many like minded players. It could be us and others. But, the lack of innovation infrastructure is a huge problem that everyone will have to overcome with. We must create value and wealth creation locally rather than helping to create wealth for shareholders outside.

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#6

True. Need to have a “local mindet” and global target.

#7

I agree to this fact as India has always been concentrating mostly on the service industry rather than on the manufacturing or production aspects, though the skills are available in India. This is also one of the major reasons for India to face lot of ups and downs during the economic recession that occurs every decade globally. But, this is not true with the countries that concentrate on developing their own products or brands, which is also one of the major reasons for the beginning of ‘Make in India’. If more and more engineers rely on their skills and are able to win the support of Government for the cost that is incurred to develop their brand, it is of no doubt that India will not face difficulties even during global economic recessions.

#8

The problem is multi-fold. But, the main issue is lack of access to risk capital. to build sustainable high value product companies, one needs to raise tens to hundreds of millions of dollars before reaching break-even. It requires lot of patience and longer time to market. There needs to be a change all across from entrepreneurs to investors to government to customers. China has been able to build 15+ product companies over the last decade from lenovo to huawei to xiaomi to alibaba to baidu to tencent.

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#9

Two problems…

One
Few established local brands like Micromax etc failing with poor global vision and concentrated only on providing imported / assembled hardware with almost stock Software with bloatwares pre installed. Even though they succeed with just this as their selling point as these devices are low cost.

Two
Mentally of our people thinking that local products as less superior to foreign brands even though it is at the moment but the mindset shift to support home grown products is very slow.

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#10

No argument. Agreed.
But the people there have a open mindset to accept and support home grown products and that helped small companies attract investments and became a brand now. Take xiaomi… Started off as a simple alternate home launcher called mi launcher but now they are no 1 in China no 3 in the world, consistently moving towards IoT.

The only company I have seen in India with a strong vision towards IoT is Smartron. Impressive!

#11

Thanks for the support Rajesh.

A mindset change is possible; we believe that. History shows us that even conventional wisdom can be challenged and at times disrupted to set a new norm. Be it a black swan or a round earth, what was the absolute truth for thousands of years have been changed overnight with one single act.

Mindset changes start in the mind. We are concentrating our physical efforts on ensuring it complies to a vision. Great products from a country that has no dearth of innovation. We believe we can bring about that change and it can be faster if all the players work together for the good of the system.

Welcome to the Tron revolution.

#12

I agree wid yu

#13

Already a Renaissance has started in our country since 2008,
All kinds of indian startups have already established R&D in various parts of the world. They are in the process of transferring the tech and establish manufacturing units. By 2037, we shall be the new super power.

This is why everybody is now looking towards the east.
But it always takes time for the transition and development under the respective leadership’s.

We, as Indians should not biased towards any one political system or party,
Since the change has been ushered by the previous regime and the present one is following and taking it to newer heights.

#14

The secret sauce of our R&D units consist of 2 types of intellectual property.

One contains the brightest of our partners and other contains the brightest of our elite institutions who went abroad.

#15

I would like to add few points:

  1. Our current education system is best suited to produce workers since our primary focus are marks, ranks, jobs, marriage etc. Students who scored high are praised while others develops inferiority complex. Innovations never happens in cut throat competition but because of collaboration. E.g: Kalam-Raju Stent, a lifeline for the poor which big corporate hospitals never adopted or sponsored partly due to western corporations who make huge profits in the name of intellectual property and innovation while our useless bureaucrats and vision-less political class shelved further research to improve the stent in the name of increase social spending to eradicate poverty.
  2. In India, failures are often neglected. We mold ourselves for the rat race while never bother to do something different.
  3. Indians feel their worth, only when they are from professional backgrounds. E.g: engineering, medicine, management etc. If you are not one of them, you are not worthy to live.
  4. We should also understand that a society needs each and every kind of person. Large population and diversity always increases the innovation potential of a society. This is the reason why China and India were always the largest economy on earth throughout the human history.
  5. It’s not like we are not innovative enough, the problem is we don’t know how to scale. China somehow manage to break the issue of scale and innovation. The center of innovation and power is moving back to it’s original place.

Check these two articles by one of our eminent scientist Dr Raghunath Anant Mashelkar who served as director general, Council of Scientific & Industrial Research on Innovation and India.

  1. Part 1: http://www.rediff.com/news/report/must-read-the-power-of-assured-indian-innovation/20180517.htm
  2. Part 2: http://www.rediff.com/news/report/how-indias-young-innovators-do-well-by-doing-good/20180525.htm
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