India's GCCs: Driving Innovation and Expanding Beyond Traditional Hubs

ER&D GCCs: Powertrains of innovation - Times of India

Engineering and R&D (ER&D) GCCs contributed $25.6 billion of the overall India GCC revenue of $46 billion in FY23, larger than the GCC revenue from IT services and BPM. There are over 1,000 ER&D GCCs in India by MNCs in diverse sectors from consumer products to semiconductors. The first ER&D GCCs were set up in the 1980s by HP and Texas Instruments and the numbers witnessed a steady ramp-up from the early 2000s.Given the rich legacy of ER&D GCCs, the question that pops up is, how can they enhance the Indian R&D and innovation ecosystem! India GCCs are powerful hubs The ER&D GCCs in India are among the largest and most powerful technology hubs for MNCs. Samsung Research International - Bangalore (SRI-B) is Samsung's largest R&D organisation outside of South Korea. Samsung was the highest patent holder in 2022 and the largest non-US spender on R&D. SRI-B has played a role in this by filing over 7,500 patents in India and globally in varied domains ranging from 6G to multi-camera solutions. While the primary benefits of GCCs accrue to their parent multinationals, there are also spinoff benefits to the Indian innovation ecosystem. SRI-B is collaborating with Vellore Institute of Technology to develop Hindi language for the AI suite. The SRI located in NCR is collaborating with IIT Kanpur in GenAI and cloud technologies. Another Samsung ER&D GCC, Samsung Semiconductor India Research, is collaborating with IISc to set up a quantum technologies lab. These collaborations provide opportunities for faculty members in Indian technical HEIs (higher education institutions) to pursue joint research and for students to obtain training on leading-edge technologies at the world's best companies. Indian HEIs get to jointly work with the GCCs on reallife problems and get access to funding and equipment to modernise their labs. The MNCs get welltrained students to join the technical workforce for their GCCs. Robert Bosch, the German multinational with a large Indian ER&D GCC, has endowed IISc and IIT Madras to start centres in cyber-physical systems and AI respectively. Spawning entrepreneurs Some professionals in ER&D GCCs are turning into entrepreneurs and have launched innovative ventures. Niramai has developed a novel AIbased medical device to detect breast cancer at a much earlier stage than traditional methods. Niramai's founder Geetha Manjunath spent close to two decades in the ER&D GCCs of HP and Xerox. Forus Health makes AI-infused retinal imaging devices. One of Forus Health's founders, Shyam Vasudevarao, worked with the ER&D GCC of Philips. The professionals working in ER&D GCCs have experience in developing products for global markets, and in the best engineering and quality processes. In the past decade, many ER&D GCCs have started focusing on advanced competencies in data science and AI that augments the core engineering capabilities that exist in their headquarters. Siemens Healthcare's ER&D GCC leads the in-house efforts on AI LLMs. Various global product teams in Siemens use this LLM platform to streamline workflows, reduce manual effort, and mitigate error rates. Amazon's India ER&D GCC has leveraged deep learning models to improve catalogue quality by extracting attributes such as colour from product titles and images, and backfilling missing product information. Three must-dos We believe Indian ER&D GCCs must have three focus areas to make them powertrains of innovation. First, they must aspire to take end-to-end ownership of product and solutions development. This may require ramping up core engineering, product management, and marketing expertise. This may not be easy and will need champions both in the GCC as well as in the headquarters. Once we have exem plary GCCs doing cutting-edge work, it will snowball into a movement in many more GCCs, and jumpstart a new era of product development and translational research in India. Second, ER&D GCCs should increase their support for the Indian deeptech innovation ecosystem. This is beneficial for both the parent and the Indian ecosystem - the startups may develop complementary products and solutions or leverage the products of the multinational for new use cases. Third, ER&D GCCs must partner with Indian technical HEIs. This can be in multiple formats, from GCC professionals becoming professors of practice and offering electives, to sponsoring joint R&D. These programmes will prepare students for a career in the GCCs. They will also motivate faculty in the HEIs towards translational R&D which is now a top priority in our national S&T missions like the National Mission on Interdisciplinary Cyber-Physical Systems. Organisations like Nasscom can help catalyse these partnerships. Rishikesha T Krishnan is director and Ram Charan Chair Professor in Innovation and Leadership at IIM Bangalore and N Dayasindhu is co-founder & CEO at itihaasa Research and Digital

Emerging hubs: India's new GCC innovation frontiers - Times of India

GCCs of multinational corporations are increasingly setting up shop in Indian citiesCities like Indore, Coimbatore, Bhubaneswar and Visakhapatnam, long overshadowed by metropolises like Bengaluru and Hyderabad, are emerging as the new hotspots for the technology industry. Global capability centers (GCCs) of multinational corporations are increasingly setting up shop in these cities, drawn by the promise of untapped talent pools, lower costs, and a better quality of life. "The winds of change are here," says Rahul Atri, managing director of Rakuten Symphony India. Based out of Indore, Rahul is at the forefront of this transformation. "If we as leaders won't do it, who else will? Somebody has to take the first step, create the playbooks and cheat books." Rakuten Symphony, a telecom subsidiary of Japan's Rakuten Group, has already filed over 300 patents from its Indore centre. The company delivers world-class software on telecom automation to clients across the globe. "This is very special for people here," Rahul notes with pride. "We come from the heart of the country." The rise of these emerging hubs aligns with the Indian government's plan to develop the nation holistically. State governments are actively pitching these cities to GCCs, offering a range of incentives and support. But it's not just about the bottom line. These emerging hubs offer a quality of life that is increasingly rare in the crowded, congested met ros. "33% of Indore has forest cover," Rahul points out. "The food is great, the cost of living is low, and there's a real sense of community here." Indeed, the allure of these smaller cities is multifaceted. For companies, they offer a respite from the intense competition for talent in tech hubs like Bengaluru. "When I was at Mastercard, we had Vadodara as a huge hub," recalls Sirisha Voruganti, CEO and MD of Lloyds Technology Centre. "Our attrition was in the very low singledigit numbers. This allowed us to retain a talent pool we had trained, significantly increasing our productivity." Sirisha, a veteran in the tech industry with over 30 years of experience, sees these emerging hubs as a solution to the challenges faced by GCCs in major metros. "The time is now to look at tier two and tier three locations in India. In the big cities, we're dealing with high attrition rates and infrastructure issues. The tier two cities offer a refreshing alternative." Long way to go still Of course, there are challenges in setting up in these emerging hubs. Connectivity, both physical and digital, can be an issue. "Governments need to provide more than just tax benefits," cautions Voruganti. "We need good schools, hospitals, airports - an entire ecosystem to attract and retain talent." This, she says, is particularly important to attract senior and mid-level talent. Senior talent is critical to ensure a GCC grows and innovates. Building this ecosystem requires a collaborative effort between GCCs, governments, and academia. "We work with local universities to shape the curriculum, build electives, and polish the raw skills," says Naved Narayan, VP of mobility solutions and head of the Coimbatore R&D centre of Bosch Global Software Technologies. "It's a long process, but the results are worth it." Bosch has been in Coimbatore for over 16 years now and has seen the city transform. "When we first came here, we had to start from scratch," Narayan recalls. "But now, there are many companies here, and the talent pool has grown tremendously." This growth is not just quanti tative, but qualitative as well. "People here have great problem-solving skills," Narayan notes. "They are resourceful, eager to learn, and have a real hunger to make a difference." This hunger is evident in the startups that are sprouting up in these cities, often with the support of the GCCs. "We work with startups, incubate them, provide them access to our technology and markets," Rahul says. "You never know which part of their product can hit your business and help you grow." As these emerging hubs grow, they are beginning to develop their own unique specialisations. Ahmedabad and Indore, for instance, are becoming known for their fintech and cybersecurity capabilities. Bhubaneswar is developing expertise in AI and machine learning. "Find your niche, think 20 years ahead," Rahul advises. "When you're thinking of setting up in these cities, think of the capabilities you want to build. Invest in sustainable data centres, in AI. Become a differentiator." Srikanth Srinivasan, vice president at Nasscom, agrees that building talent is a journey that will take time. "That would have been the case even for the larger cities at some point of time in the past decade or two. It's something that you need to work on." To attract the right talent, Srinivasan recommends companies start the process as early as possible. "You need to start now. And probably you will start getting results only three or five years from now." The rise of these emerging hubs is not just a business imperative, but a social one as well. "It's about the next generation, the next cities we want to invest in," Rahul says. "If we can create five more Bengalurus, ten more Hyderabads, we will truly be the India we all aspire to live in."