Only ‘heavy investment’ in research and development (R & D) can help India develop companies such as Apple, Google and others, Zoho CEO Sridhar Vembu said on Thursday, as he explained, in a Twitter thread, how the country can come up with globally competitive companies like these.
At present, however, India is nowhere close to producing globally competitive firms, Vembu observed.
The Padma Shree awardee first explained the ‘Why’ part of the question: ‘Can India produce globally comptitive companies like Apple, Google, Pfizer, Samsung, Honda, Boeing, Siemens, TSMC, or Huawei?’
“These companies are extremely important to their host nations because they embody within themselves the advanced know-how and R & D capabilities essential for modern life and nationhood. Most critical R& D happens within such companies,” he said in a tweet.
“These companies enjoy a disproportionate share of economic value added as well as profits (compared to their direct effect on employment) and also pay heavy taxes to their host nations both through their well-compensated employees and directly as corporations. That’s the why,” added the 54-year-old.
Vembu then shifted to the ‘How’ part.
“For India to build such companies, Indian private sector must invest in R & D heavily. There is no other way. The government should incentivise and persuade companies to invest in R & D. Industrial R & D is not the same as academic research,” tweeted the Zoho CEO, adding that investing in research and development in the private sector brings ‘enormous’ returns, and these show up as high GDP growth and high GDP per capita.
On where firms can find skilled people for private sector R & D, he conclused by saying investing by private firms in research and development signals deep commitment, and this in turn attracts talented people.
Research and Development
According to britannica.com, these are two intimately related processes in the industry, through which new products, as well old products but in a new form, are created using technological innovation.