Walk into the John F. Welch Technology Centre in Bangalore and you could be forgiven for thinking you have strayed into Q division – the laboratory dedicated to inventing new gadgets – from a James Bond film.
In one area of General Electric's 1m-square-foot research and development centre, named for the company's former chief executive, scientists are testing a special “pedestrian-safe” bumper bar for cars, which can hit people at speed without maiming them. Elsewhere, boffins are working on locomotive engines that run on methanol extracted from grass growing alongside India's railway lines, and on super-compact medical equipment that costs a fraction of the price of similar products in the west.
Opened in 2000 with 275 scientists and engineers, today the centre employs 4,300 – or one in six of GE's researcher “technologists” worldwide. This year, this ratio will increase to one in four, according to Guillermo Wille, the centre's managing director.
“Why India? It's very straightforward,” says the German engineer. “There are few other countries where you can hire such large numbers of engineers so quickly. China is comparable but after that, nothing comes close.”
Bangalore is well known for its vast outsourcing sector, in which armies of twentysomething graduates perform the grunt work of the global information technology outsourcing industry, inputting data and managing the software and computer hardware of clients overseas.
Less well known is that the city nicknamed India's Silicon Valley is becoming a globally important centre of innovation. Alongside GE, multinationals such as Microsoft, Intel, Google, IBM and Britain's Tesco supermaket chain, are opening R&D centres there. The Welch centre is GE's biggest outside the US.
This trend of moving up the value chain is just beginning and there is still much to do in terms of overcoming India's chronic infrastructure problems and improving its education system. But for Vijay Govindarajan of the Tuck School of Business at Dartmouth College, New Hampshire, and chief innovation consultant at GE, the rise of these multinational R&D centres in India and China is driving a profound shift in innovation as significant as the move from mainframe computing to the personal computer, or the introduction of the internet.
He notes that after the second world war, innovation originated chiefly in the US, resulting in products that were then distributed around the world. By the 1970s, Europe and Japan had rebuilt and become rival sources of innovation. Now, the trend is shifting to include India and China.
“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,” says Prof Govindarajan, who co-wrote a recent Harvard Business Review paper on the subject with Jeff Immelt, GE chief executive. “Companies, if they don't realise it, will be toast.”
The research potential of India's engineering talent pool first drew attention in 1985, when Texas Instruments opened a technology centre in Bangalore. Today, more than 200 multinationals have R&D centres in the country. The ventures aim to tap the country's phalanxes of engineers – India's better tertiary institutions churn out about 600,000 a year – as well as the enormous pool of expatriate PhDs working in the west who are keen to return home. Cost is also a factor. Partha Iyengar of Gartner India, a branch of the consultancy, says that in terms of “dollar spent per ounce of innovation”, India's cheaper engineers mean the equation is “dramatically different” than elsewhere.
