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In such an
integrated network arrangement, subsidiary overseas units are no
longer viewed only as the end of delivery pipelines for company
products. Rather, the management considers each of the worldwide
units as a source of ideas, skills, capabilities and knowledge
that can be harnessed for the benefit of the whole organization.
Today, overseas laboratories are expected to play an important
role in the global program of innovation by conceptualizing new
products, which are then produced locally either for the
host-country, or for wider markets.
Research findings at
the SJMSOM indicate that while both market and technology oriented
activities are important for MNC subsidiaries, the spotlight is
presently on the former. With the mantra now being
‘customize products for the Indian market and work with
manufacturing facility in India,’ the local industry is also
assuming a technology-oriented stance. For this it is imperative
to source high-calibre scientists, engineers, and designers in
India, and to develop new product ideas.
Generally, the R&D
centers of MNC's conduct contract research for corporate
laboratories or sister R&D laboratories outside India.
Consequently, such in-house R&D units are now keen on establishing
links with Indian scientists and technologists, and sometimes
sub-contract a part of the contracted research to Indian
universities or laboratories. However, technology-oriented
activities like obtaining information on India's scientific and
technical R&D, and developing new science and technology rank
somewhat lower in their order of priorities. This suggests that
although the companies are keen on employing Indian skills, they
do not consider Indian scientists to be at the cutting edge of
research where breakthroughs are made. Also, such sample units are
involved in technology development but not in technology
monitoring. Furthermore, technology development activities
appear to revolve more around commercial technology rather than
contribute to scientific and technical knowledge.
The ongoing
transition of the Indian economy is reflected in the changing
nature of R&D in some of the companies. For example, several
companies have completely restructured their R&D centres in India.
They have shifted focus from developing products for Indian
markets, to designating a local R&D unit as a 'Global Centre of
Excellence' in some areas. This means that, regardless of the
end-use or end-market of a product under development, the R&D in
that particular area will be done in India. In other instances,
although their original objective in setting-up R&D units was to
support Indian operations, some companies have had to re-work
their plans, owing to foreign companies acquiring a majority
control.
The key factor
driving the investments and activities of foreign R&D laboratories
is the importance of human capital. As pointed out above,
overseas laboratories of MNCs increasingly utilize high-quality
local scientific ability in internationally integrated programs of
basic research. One of the benefits of R & D globalization is the
enhanced technical learning of local scientific talent.
Additionally, the local industry is also likely gain from
technology spillover effects such as custom or toll manufacturing.
(kjain@som.iitb.ac.in)
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