MNCs prefer Deccan Triangle of India for setting up R&D centres

Though Bangalore tops the chart, Pune and Hyderabad are fast catching up

Bangalore has been a preferred centre for technology firms to have their set-up, but a recent study indicated that almost 64 per cent of multi-nationals have their research & development centres concentrated in the Deccan Triangle of India—comprising of Bangalore, Hyderabad and Pune.

According to a study by Zinnov, Deccan Triangle makes a significant contribution in the R&D ecosystem of India, with as many as 200 of these companies already present here. With 125 centres in Bangalore, 45 in Pune and 43 in Hyderabad, the Deccan Triangle today has as many R&D centres as the entire Silicon Valley.  

Bangalore, though tops the chart in terms of the number of people employed and investments, Pune and Hyderabad are fast catching up. As per Zinnov study, the total headcount of R&D centres in Bangalore touched 1,35,380 with a total investment of $5956.4 million. Pune comes at second position with total investment of $1,543 million and total recruitment of 35,070 people. Hyderabad leaves behind NCR to come at the third position with 30,460 people in R&D centres and investment of $1340.2 million.

“Globally there are 500 companies which spend substantially on R&D, of these 229 are in India. Over a period of time we have seen concentration of companies in these areas. One of the biggest reason for this growth is education institutes in and around these regions. Each of these regions have their own peculiarity that has risen them to importance,” said Nitika Goel, senior manager Zinnov Consulting.

What has also helped Pune grow is the concentration of automobile, and auto ancillary industry. “All regions have evolved over the years and do have a spread of verticals. However there is a concentration of manufacturing in the Mumbai-Pune region and the Automotive Sector in the Chennai Region. Bangalore, Hyderabad are fairly vertical agnostic,” said Goel.

“Bangalore and Pune have lot of similarities. Both have large cantonment areas and access to talent. In case of Bangalore the spread of companies creates a talent pool and hence access to talent. In case of Pune, you see a connected community feel. Rather in the recent past Pune has become aggressive as an eco-system,” added Goel.

Goel also says that the maturity of these regions is also evident from the fact that the salary disparity between them is decreasing. “There was a time when the salary disparity between Bangalore and Pune was huge. But that is not the case anymore,” she said.

As a result, all these three centres are recognized as tier- one locations for MNCs to set up, innovation centre across automotive, electrical and electronics, software, telecom & networking and semi-conductor industries.