Electronic product design must be the next wave for India

In a global business context, India has been in the news a lot lately – particularly with Tata’s acquisition of Land Rover and Jaguar, and this week’s news that Videocon intends to pursue an acquisition of Motorola’s mobile phone business.

While news of acquisitions, tie-ups, and consolidation may be good for India Inc., will it actually mean anything for driving innovation in the electronics industry, or will the story continue to be an evolution of India’s past – of assembly-line technology?

In the early 1990s, the secretary at India’s department of electronics, Mr. N Vittal, had often stated India had a reputation for implementing ‘screwdriver technology’ – ie: simply re-assembling products that were designed elsewhere in the world.

Since those days, we all know that the next wave in India’s technology industry was IT outsourcing and subsequently business process outsourcing.

Now, NASSCOM says that there is significant untapped potential in outsourced engineering services, which has also expanded beyond product design and R&D services to include industrial services such as process engineering plant automation and enterprise asset management.
 
This is important because it indicates the further possibilities that the next wave of electronic product design has in store for India. Put into context, as a proportion of national GDP, revenue from the Indian technology sector has grown from 1.2 percent in FY1998 to an estimated 5.5 percent in FY2008.

Export revenues from relatively high-value-added services such as engineering and R&D, offshore product development and made-in-India software products is estimated to be growing at over 27 percent, and are forecast to reach USD 6.3 billion in FY2008,  according to NASSCOM. Semiconductors, EDA and consumer electronics, account for about 29 percent of this figure; software platforms/systems about 10 percent; and telecoms and networking accounts for 27 percent.

But what would really put India on the world map now is not better and faster growing revenue figures for outsourced engineering and product design.  What would put India on the map is innovation in electronics design – the type that would be of a world-changing nature.

In the bigger picture, in the tech sector, the world outside India perceives that Indian engineers are highly talented and educated individuals with lots of potential to make world-changing innovation. They believe this because of some of the successful Indians who’ve made a significant impact on the global electronics and telecoms/wireless industry outside India. 

Some of those Indians who have built successful global companies from Silicon Valley in the USA, or other parts of the world, have been slowly flowing back to India with their wealth and experience to try and make an Indian company the next big innovator on the global stage.

But in order to create the next Intel or the next Nokia or Motorola, or the next Cadence or Synopsys, Indian electronics engineers and managers need to think that they are more than just outsourced talent – they need to believe they will be the next Vinod Khosla or Vinod Dham. And once they believe this, with the right team or partners, they might just get there.