R and D cluster: a comparison across cities

Abstract

This objective of this study is to identify Non-IT Industries where India has a potential to develop into a Global R and D Hub and then to evaluate and rank the probable Indian cities which possess a potential to develop into a global hub for each of these industries. The study looked at the top 20 Industries in the world with respect to their annual Global R and D expenditure. From these, the industries which outsourced a minimum of 4% of their R and D were identified. Further only those industries were considered where India has acquired competencies to position itself as a global R and D Hub. Five industries were identified as strong candidates for establishing R and D Center/Innovation Hub in India; namely, Auto-auto ancillaries sector, Agri-agri implements Sector, Chemical sector, Semiconductor industry, Pharmaceutical/Biotech sector. In the second phase of the study, for each identified industry, the manufacturing plants and R and D centers of select leading companies in India were mapped and centers of their concentration identified. Thereby, for each industry a minimum of three and a maximum of five locations were identified. These locations were further cross-evaluated in terms of their potential to develop as a global R and D hub. For the purpose of such an evaluation; a' Desirability For Investment Index' (DFI Index) for each City-Industry combination was formulated. The DFI Index tries to capture the suitability of a location for investment as an R and D Hub. To measure the DFI index for each region, eight common parameters were identified - Social Infrastructure, Physical Infrastructure, Availability of Finance, Government Support, Regulation/Tax Incentives/Policies, IPR climate, Access to Skilled Workforce and Networking Infrastructure. These parameters were considered on a weighted average method based on their relative importance in deciding the potential for each industry. Six of the eight parameters were common across the five industries but two, namely, Access to Skilled Workforce and Networking Infrastructure were industry specific.