MNCs still prefer Tier I institutions for long-term R&D: Study

However, Tier II & III institutions offer cost advantage

Multinational research and development companies are increasingly finding quality talent in Tier-II emerging and Tier-III institutions at comparatively lower costs. The costs are 33 per cent lower for graduates from Tier-II emerging institutions and 41 per cent lower for graduates from Tier-III institutions, according to the latest study released by globalisation and market expansion advisory firm Zinnov.

However, when it comes to selecting a university for research collaboration, Tier-I institutions are still preferred for long-term, high-budget research engagements. For instance, the study found that Tier-I institutions received 75 per cent of consulting contracts and 67 per cent of sponsored/open research contracts.

On the other hand, Tier-III institutions received only 7 per cent of sponsored/open research contracts. Tier-II institutions received the bulk of sponsored infrastructure and training/curriculum design budgets.

The Zinnov study covered trends in compensation and collaboration between MNC R&D centres and education institutions in India.

For the purpose of the study, campuses were segregated into four categories - Tier-I institutions, Tier-II established institutes, Tier-II emerging institutes and Tier-III institutes - based on various factors like perception of the institute, quality of faculty and industry research collaborations. The survey covered institutes that offer both BTech and MTech degree programmes.

"Leveraging the educational ecosystem in India is an imperative for MNCs looking to drive value and innovation out of their R&D centres in country. MNCs today are looking at universities as more than just a hiring ground; rather, the most innovative centres are putting in place structured programs to increase the relevance of the skills that students acquire on campus, and collaborating with institutions for research projects," said Pari Natarajan, chief executive officer of Zinnov.

Despite challenges such as loosely-defined IP (intellectual property)-sharing policies at universities, mismatch in expectations and lack of industry-relevant exposure among students, MNCs that are closely aligned to their university partners in a long-term and structured engagement stand to benefit in the long-run," he added.

According to the study, comparison of salaries of fresh hires (total guaranteed compensation {TGC} or fixed pay) for Tier-I and Tier-II established institutes indicates that engineering graduates from Tier-I institutes are paid 25 per cent to 30 per cent higher than Tier-II established institutes for similar job functions.

While the average TGC for a graduate at a Tier-I institution was Rs 8.07 lakh, the average TGC for a graduate from a Tier-II established institution was Rs 6.49 lakh.