MNC R&D centers in India help reverse brain drain

by CXOtoday Staff    Mar 31, 2010

The presence of multinational R&D centers in India has been a positive influence on the local industry ecosystem in India, particularly while fostering innovation, academic partnerships, entrepreneurial zeal and reversing brain drain. This trend was revealed in Zinnov’s report titled Impact of MNC R&D Centers in India .

The report said that MNC R&D centers here have begun to understand and capitalize on
ideas and talent from India, which has resulted in increased innovation
in the last few years. However the R&D factory in India is still very nascent when compared with other Asian countries such as Japan, South Korea, Taiwan and Israel predominantly because their local R&D ecosystem was always very conducive for MNC companies to enter and extract value in an accelerated fashion. India s existing R&D ecosystem has been built by these MNC R&D companies and it still remains a key charter for them to mature this ecosystem into an assembly line for innovation.

MNC centers have seen continued growth in the last few years, having grown by 5 percent in the past year. Offshoring has been a key driver riding largely on the presence of a mature industry ecosystem, including the availability of a great talent pool, differentiated cost arbitrage and the innovation capabilities, Pari Natarajan, CEO, Zinnov.
The report pointes out that these R&D centers have also been instrumental in triggering increased FDI spends and in the development of secondary and tertiary locations, apart from providing direct or indirect employment to hundreds of thousands of people. The centers have also been a crucial facilitator in checking the process of brain drain to western markets, while effecting reverse brain drain.

The main reasons for brain drain some years back were the lack of attractive jobs and growth opportunities. However, over the years, MNC centers have played a crucial role in creating an ecosystem conducive to growth of individuals which has helped India control the problem of brain drain. In fact, due to the availability of better opportunities in countries like India and China, a reverse brain drain has kick started, Natarajan added.