India's Changing Innovation System Achievements, Challenges, and Opportunities for Cooperation: Report of a Symposium (2007) / Chapter Skim
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Panel IV: Building U.S.–Indian Research and Development Cooperation
Panel IV: Building U.S.–Indian Research and Development Cooperation
Pages 109-134
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From page 109... ...
Swati Piramal, the director of Strategic Alliances and Communications of Nicholas Piramal Indian Limited (NPIL) , a major Indian pharmaceutical firm.
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110 INDIA'S CHANGING INNOVATION SySTEM or journey to the elixir, which constituted a gift that, in India's case, was the country's science renaissance. A Transformative Model: "Leadership in Action" To illustrate, Dr.
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From page 111... ...
"But fly it does." Turning to her own field, Dr. Piramal cited a Cambridge Healthtech report on Globalization of Drug Development published in June 2006 that, surveying 235 executives in the pharmaceutical industry, found that three-quarters of their firms were engaged in drug development in India.
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Piramal told the agent she had come to look after the affairs of her company and added that it employed around 1,000 Americans, who made glass vials at three manufacturing facilities. Remarking that the company's research scientists were of 22 nationalities, she said: "This is not only about a reverse brain drain, it is not only about outsourcing, it is really about acquisition of global talent." Just the day before, NPIL had signed an agreement to acquire from Pfizer a 450-employee facility at Morpeth in the United Kingdom in a transaction carrying a supply agreement that was good through October 2011 and could potentially yield upward of $350 million in revenues.
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Since then, India's backlog of patents has shrunk from 22,000 to 6,000, the result of efforts by both the government and private sector to stimulate change. Best Practices for Building Partnerships She then offered a rundown of best practices for building partnerships: • anticipating business risk, which includes making a good business plan internally and fostering openness so that it can be refined through interaction; • understanding rights and obligations, under which she placed reducing complexity, "playing for the long run," and eschewing short cuts; • preparing realistic feasibility studies rather than overpromising and paying for it later, an important point for Indians, who "always like to promise a lot"; • defining expectations clearly; • rewarding performance; • finding the best talent; and • creating planning to bridge management styles.
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Collaboration For a case study, Dr. Piramal turned to Allergan India, a 10-year-old joint venture of NPIL and the Orange County, California, company Allergan Inc.
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Piramal and praised her video both for its beauty and its potential for use in other venues. She then introduced Robert Armstrong, Senior Vice President for Discovery Chemistry Research and Technologies and Global External Research and Technologies at Eli Lilly and Co. -- a firm that, she noted, has extensive interactions with India.
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The benefit was apparent at an R&D evening Eli Lilly held for pharmaceutical industry executives in 2005 that was attended by Dr. Piramal along with representatives of a number of other Indian firms.
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Armstrong chose to focus on those that might elucidate Eli Lilly's thinking on the issue and, in particular, on the role it saw India playing. All the activities of the pharmaceutical industry's R&D sector can be broken down into two components and placed on two axes -- the x-axis representing technical difficulty on a continuum from hard to easy, the y-axis ownership on a continuum from proprietary to nonproprietary -- so that the origin of the axes marked the confluence of the highest difficulty with the greatest ownership (see Figure 6)
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"Embedded in that cost reduction is a lot of innovation in processes and focus in delivering products," he explained, "so that outsourcing or outlicensing activities previously occurring inside the company has changed the equation on cycle time for many of them." Spreading Knowledge Within the Company The degree of appreciation for this relationship varied even within Eli Lilly, as some who attended the meeting of R&D executives previously mentioned had already engaged in collaborations with India. Like all global pharmaceutical majors, Lilly had been active in India for years, teaming with a number of companies there both on the manufacture of many legacy products that still carried its own brand and on the launch of global clinical studies.
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In quest of the latter, Eli Lilly has invested in the firms with which it is allied, not only in the area of manufacturing innovation but also, as he put it, "in true innovation, at the front end of the pipeline feeding the R&D engine." To date, these research alliances have been with biotech companies in the Boston, Seattle, and San Francisco areas; around Cambridge and Oxford in the United Kingdom; and in Germany. But on their continuing visits to Asia, and in particular to India, Eli Lilly officials were being reminded by the numerous start-ups they were seeing of what they had observed a decade before in San Diego and five years before that in San Francisco and Boston.
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To conclude, Dr. Armstrong stressed how fortunate Eli Lilly has been in having conversations at a very high level with a large segment of India's phar Proc fig 7 maceutical industry and in achieving a thorough grasp of both the opportunities and the challenges facing the companies that these Indian companies represent.
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"We are very proud to be the only one of the Dow Jones Index's six original companies that is still listed on it," he said. The Evolution of Research at GE GE Global Research has evolved from one of the first industrial research labs in America into a highly centralized R&D organization that is among the world's most diverse.
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Based there in addition to a Global Research technology team are teams from other GE organizations: Healthcare, Plastics, Silicones, Water Technology, Energy, Consumer & Industrial, Aviation, and Rail. These groups of engineers and the technologists work together to transition and deliver technologies out to GE's businesses.
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the decision to establish a foothold in India by building a solid technology foundation there, which led to the engagement of senior leadership across the corporation in investing in the John F Welch Technology Centre as a key resource.
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Herd, reflected that while each firm had found its own structure for partnership, all were improving their business positions -- an indication that the diverse structures were working. "That's probably as straightforward as we can get," she remarked, before introducing Ponani Gopalakrishnan, former Director of the IBM India Research Laboratories, as a man with a great many friends in both the New York IBM community and Washington.
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IBM's R&D personnel in India number more than a couple of thousand, in addition to whom there was a large contingent of employees delivering information technology services and IT-associated services to a worldwide client population. Profiling IBM R&D in India IBM India Research Laboratories itself has a little over 100 very highly skilled researchers working as part of a team of about 3,200 that is spread over the IBM Research Division's eight labs worldwide.
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He then showed a brief video designed to portray the scope of IBM India Research Laboratories' efforts in these domains. The video focused in part on a current project in which the labs were laying foundations for a very secure network conceived in accordance with the realities of India's information technology infrastructure.
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Gopalakrishnan offered his own opinion that there are significant opportunities for collaboration currently available. He also drew attention to the remarks made 10 days earlier in Bangalore by President Abdul Kalam, in which he outlined a compelling vision: "the creation of a World Knowledge Platform for realization of world-class products for commercial applications using the core competencies of partner countries which will meet the needs of many nations.
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Ownership of these two entities breaks down as follows: • Tata Sons is held 66 percent by two public trusts, the Sir Dorabji Tata Trust and Sir Ratan Tata Trust; 18 percent by external shareholders; 13 percent by other Tata companies; and 3 percent by the Tata family. • Tata Industries is held 29 percent by Tata Sons; 52 percent by other Tata companies; and 19 percent by the Jardine Madison Group.
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Now, however, TACO has 16 global partners, four engineering centers, and 16 plants; is focused on building exports; and has been referred to as the Delphi to Tata Motors' GM. He noted that TACO has a fiercely independent structure, being at times obliged to work harder than its competition to sell to Tata Motors because "there is always an internal rivalry." The secret of its success has been learning diverse technologies and offering complete program management capabilities.
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TACO currently employs over 800 engineers -- a figure expected to rise to 1,500 in 2007 and to 2,500 in 2008 -- spread over four facilities: its own TACO Engineering Center and three jointly held with partners, Tata Johnson Controls Engineering Center, TACO FAURECIA Engineering Center, and TACO Visteon Engineering Center. Noting that JCI, FAURECIA, and Visteon compete fiercely among one another in some sectors of the auto components business, Mr.
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The project calls for joint development of a low-cost, global platform capable of being: • Manufactured in a low-cost country (LCC)
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Incentives were set up for all involved: ICICI had no interest in assigning 10 people to an export development program, nor did the government care to put up money, unless there was to be some benefit. Since at that time India had a shortage of foreign exchange, the World Bank provided funding on the condition that the policy initiatives be put in place -- which meant that the economy had to be opened up.
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announced its intention to set up a joint venture with a foreign partner to manufacture trucks, the International Finance Corporation in Washington put its foot down. Hindustan Motors was told it had to fix its Ambassador passenger car business, which was on the skids, before it could get involved in trucks.
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1 INDIA'S CHANGING INNOVATION SySTEM of important insights had emerged from the presentations offered by the business people on the final panel: that partnerships will not work if they are one-sided but must be built on mutual advantage; and that when the innovation engine of private enterprise is turned loose, it gets ahead of policy relatively fast. Thanking the speakers for sharing extraordinarily interesting case studies, she turned the microphone over to Dr.
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