India needs to focus on innovations: Tata Sons chairman

According to the World Bank, in 2014, India's gross spending on R&D was 0.63% of its GDP

Tata Sons Chairman Natarajan Chandrasekaran on Tuesday said India needed to focus on innovations. 

He emphasised on believing “in the power of aspiration” if individuals and the society wanted to achieve “extraordinary things”, during his speech at the AIMA-JRD Tata Corporate Leadership Award in Delhi.

Chandrasekaran, who received the 2016 edition of the award for his contribution to the corporate world, expressed hope that India would witness high economic growth in coming years. “We have the best talent and demographics. We are in the best of times. We are going to have one or two decades of exceptional economic growth,” he said.

His speech came after Vice President Hamid Ansari pointed out the lack of focus among Indian corporations for innovations and research and development (R&D). 

Citing examples, Ansari said Reliance Industries “spent a negligible 0.32 per cent of its revenues on R&D in 2015, while L&T, an essentially engineering company, invested 0.36 per cent”. 

Ansari’s concern was not unfounded. According to the World Bank, in 2014, India’s gross spending on R&D was about 0.63 per cent of its gross domestic product (GDP), against 1.5 per cent by China and 1.1 per cent by Brazil. Many developed countries, on the other hand, spend upwards of 4 per cent on R&D.

“For many Indian firms, competition per se is a new phenomenon. Indian businesses have traditionally been risk averse. Most Indian firms, barring a few notable examples, lack sufficient grounding and experience in global competition because of the absence of intense inter-firm rivalry in the domestic business environment. 

“Additionally, prolonged government protection has left them feeling complacent and ill-prepared to wage competitive battles at global level. There is a genuine need for change in the internal environment of Indian firms that can foster competitive thinking and behavior,” Ansari said, before he delivered the award to the Tata Sons chairman.

Calling Chandrasekaran’s leadership style “inspirational” that brought dynamism, Ansari said he had worked over the years to take Tata companies to greater heights.