Study: Indian companies not using innovation to reposition themselves

TechOnline India - December 15, 2009

A study of R & D in ICT has found that Indian companies are not using innovation to position themselves higher in the value chain. They also innovate mostly with clients and customers and are mostly short-term oriented in this too.

Indian companies are not taking advantage of the innovations they come up with along with their clients and customers to position themselves higher up in the value chain. The collaborations undertaken by Indian companies are also short-term oriented and they usually collaborate only with their immediate customers, a joint Europe-India study on innovative research and development in information and communication technologies (ICT) has found.

The project sampled specific data on ICT innovation and R & D from more than 200 companies, representing about half of a sample of 382 ICT innovative companies from all over India identified through a range of public channels, the 2008-09 study disclosed.

"The collaboration - and their customers along with whom they innovate - are predominantly found in India and secondly in the U.S. and in Europe. Therefore there is a strong potential for bringing ICT innovation into Indian society from these medium-sized small and medium enterprises (SMEs)," said Mogens Kuehn Pedersen. Euro-India Coordinator & Copenhagen Business School, Denmark, said at the Euro India ICT cooperation Conference 2009 held at the International Management Institute (IMI), New Delhi.

"The most crucial technologies for innovation are application and communication technologies," he said, discussing key results of the Knowledge mapping study conducted during 2008-2009 as part of the Euro-India ICT Co-operation project conducted along with Sudhanshu Rai, both Euro-India Coordinators & Copenhagen Business School, Denmark.

Supported by the European Commission - the event underpinned by an understanding of the EU-India innovation landscape - aims to inspire an effective dialogue between Europeans and Indians serving not only to boost ICT innovation but also to expand upon the relationship that exists between Europe and India as it takes on the challenges and opportunities ahead.

Currently, there are 10 successful projects coming up so far as part of collaboration between the EU and India.

The Euro-India ICT Co-operation project has three key objectives:

to systematically map the ICT R&D competencies of India to support EU-India policy dialogue using the data generated to disseminate European funding opportunities for Indian ICT players through info days

"Indian companies innovate together with their clients and customers. So, these innovative companies are not taking advantage of their innovations to reposition themselves in the value chain. Therefore they are not presently using innovation to move up into higher value adding positions. Innovative Indian companies are following a short term collaboration strategy. They do not engage in collaboration beyond their immediate customers," said Sudhanshu Rai.

"While the Indian ICT Industry is trying to think out-of-the-box, the pace at which it has been innovating is perhaps not good enough. One of the key reasons is funding the innovation projects agreed upon," said Ramesh Behl, professor, IMI and region head for the Euro India ICT Project.

The project noticed that there are a very wide range of sectors and domains targeted by the innovative companies. Thus, there is no evident candidate to be nominated at the major clusters. Innovative ICT companies are often found to be medium-sized SMEs bridging the characteristic gap in Indian industry structure of very many small SMEs and few major companies with few in the middle-sized range.

ICT innovations were not defined at the beginning of the project, but looked at data to guide it on the issue of definition.

The Interactive Information Sessions were aimed at giving participants a comprehensive understanding of the FP7 (2007 - 2013) ICT Work program, covering ICT domains, the international cooperation objectives, instruments and funds to engage in research projects alongside European partners. They also illustrated the funding opportunities for collaborative research projects available in 2009 and 2010 and how participants can get involved in the same.

The conference built on the growing number of EU-India collaboration success stories supported by the EC to foster new partnerships that draw on the research strengths of both Europe and India. To this end, the conference spotlights co-operation capacities, ICT forecasts, innovation potential and best practices, exploring the forces at play, policy issues, challenges and opportunities moving forward.

It capitalizes on EU-India R&D cooperation success stories by supporting an EU-India ICT community with a focus on "win-win" partnerships and long-lasting benefits to both regions. EuroIndia enables ICT players from both regions to network, share knowledge and map the collaboration potential between the two regions based on R&D strengths and priorities.

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