The MNC R&D ecosystem in India is in a growth trajectory again after the brief lull in 2009.

1. Inspiring tomorrow’s
innovations

2. The MNC R&D ecosystem in India is in a growth
trajectory again after the brief lull in 2009
Total Number of MNCs
with R&D Center in India There are more than 850 MNC
~850 R&D centers in India
Over 100 MNC R&D centers
~500 have been setup in the last 3
years
~100 The number of new setups is
again in an upward trend
FY 2000 FY 2005 FY 2011
FACEBOOK PANASONIC STEC (SSD Company)
LINKEDIN HITACHI
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3. Geography: Bangalore continues to be the leader but
NCR is fast catching up
Distribution of R&D Centers across locations
Distribution of all R&D Centers by location set up between 2010 -12
Bangalore
40% 29%
NCR
16% 24%
Others
44% 47%
Bulk of the new centers are in the Software and Telecom verticals NCR has excellent
fresh talent pool and in-country movement of talent

4. Size: Majority of companies who setup centers in the last
3 years are small companies
R&D Companies set up in 2010-12 - 110
< USD 500
Million – 74% 40% Software/Internet
73% North America
USD 500 Million 70% of the leadership were
to 1 Billion - 6%
local hires
> USD 1 Billion
- 20%
Competition for Talent in US Ability to ramp up in India

5. Verticals: Growth among large MNCs is expected in core
engineering sectors
Percentages indicate average R&D HC intensity
for top 20 companies in each vertical
28%
Growth
24%
R&D Intensity
Software/Internet 19% Aerospace
& Defense Automotive
Semiconductor Telecom &
Industrial
Networking
8% 8%
6%
Verticals
Software is everywhere Product to Services Product to Platform
Note: Outliers from the mean have been excluded
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6. Billion dollar start ups are already here
1.2
InMobi
Market Valuation/ MCAP $B
Flipkart Info Edge
0.8
Make my trip
Just Dial
0.4 One97
Fashion & you
Snapdeal
0.0
0 6 12 18
Years Since Inception
Indian companies 2nd Most Important Person
constitute 20% of in Business Insider’s 2012
Top 10 “The Mobile Power List”
Naveen Tewari
2011 Co-Founder & CEO, Inmobi
6

7. Research focus is increasing in universities
40 USD 36 mn
USD 32 mn
30 Bosch Applied USD 24 mn
USD 23 mn
Materials
20 P&G Yahoo ! Oracle
Cummins
10 GM Analog Devices Mercedes Benz
Texas
Instruments
0
IISc Bangalore IIT Madras IIT Bombay IIT Delhi
Total Investments in Universities
IIM A – New annual appraisal for
IIT Madras - Yahoo! India R&D set
faculty to give equal weightage to
up Grid Computing Lab
research as teaching
IIT Kharagpur – Aims at a 2:3 intake ratio at UG to PG
(& PhD) level to improve annual sponsored research
output to USD 100 mn
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8. Indian companies have increased their R&D investments
XUV 500 Sold more than all other D-segment cars*
USD 120 million in 2-wheeler investment
Mahindra
< INR 5000 smartphone with voice recognition
Based on technology developed by Bangalore based
startup - Dexetra
Micromax

9. Some battles were won and some lost..
Solid line reporting to center head is thing of the past
– Matrix is the present and future
No reliable measures for productivity
– Teams agree to disagree
Glass ceiling finally broken
- Global roles based on one’s Aspiration and capability
Pyramids are long gone
- Talent structure in all kinds of shapes

10. We continue to debate the rest…
Center head role’s
– Leaders continue to define their own
Localization of organization culture and process
- Based on individual leaders than organization
Measure for organizational impact
- Many theories and few solutions
Role in driving global innovation
– Success still only in pockets

11. In spite of a mature R&D ecosystem, very few Global
Innovations have come from India
Apple
Facebook Android
TesLR SpaceX

12. Centers need to solve the current innovation inhibitors
Talent disengagement at leadership levels 1
2 India market not yet large enough
Competition from other locations 3
4 Steve Jobs effect
Talent competition from start ups 5
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13. There are clear signs of disengagement at leadership
levels
Key drivers for attrition at Leadership Levels
Limited growth opportunities 61%
Monotony of job/different… 36%
Inequality in compensation 33%
Work-life imbalances and stress 17%
Manager issues 11%
Lack of recognition 3%
“India center is in auto pilot”
“Next 2 yrs. priority on kids high school
education”
“Our head quarters is very happy with what we deliver”

14. India Market is not yet large compared to China
Audi Market
No. of cars sold (June, 2012)
4,000 10 X 193,871
Aviation Market
Passenger Capacity
51 mn 6X 290 mn
Internet penetration 10.2% 4X 38.3%
Apple sales < USD 1 bn 20 X USD 20 bn
PC Market Shipment ~ 12 mn 6.5 X ~74 mn
(2011) Units
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15. Strong Competition from other locations
Talent Pool Growth in Emerging Cities
Zone of Fast Emerging Cities
128.00
Zone of Progress Bangalore 9%
6%
Taipei
64.00
8%
32.00 Dallas Greater
4% Pune Hyderabad
Manila 12%
5% 5% Noida
Austin 4% 11%
16.00
Sao Paulo 11%
Eden Prairie Selangor 6% Chennai
2% $ Bucharest Dublin
Chengd
7% 8%
ln Talent Pool Size in 1000’s
8.00
Toronto Cairo Prague Kyiv 8% 12%
Oklahom 2% 12%
4% 6% 7%
Boulder 3% 5% 7% Dalian
4.00 Buenos Aires Bratisla
va
Boise 3%
2.00
Zone of Sub Optimality Zone of Progress
1.00
-1% 1% 3% 5% 7% 9% 11% 13%
Talent pool C.A.G.R (2005-2011)
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16. Strong Competition from other locations
Talent Pool Growth in Emerging Cities
Zone of Fast Emerging Cities
128.00
Zone of Progress Bangalore 9%
6%
Taipei
64.00
Beijing Shanghai
7% 8% 9%
32.00 Dallas Greater
4% Moscow Pune Hyderabad
Manila Budapest
12%
5% 5% 7% St. Petersburg 10% Noida
Austin 4% 9% 11%
16.00 7%
Sao Paulo
Eden Prairie Selangor 6% Mexico City Xiamen 10% 11% Chennai
2% $ Bucharest Dublin
Chengd
7% 8%
ln Talent Pool Size in 1000’s
8.00
Toronto Cairo Prague Kyiv 8% 12%
Oklahom 2% 12%
4% 6% 7%
Boulder 3% 5% 7% Dalian
4.00 Buenos Aires Bratisla
va
Boise 3%
2.00
Zone of Sub Optimality Zone of Progress
1.00
-1% 1% 3% 5% 7% 9% 11% 13%
Talent pool C.A.G.R (2005-2011)
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17. Companies have adopted top-down innovation model
Shut down over 25 projects and have refocused
Google most of their resources on few product
categories
Focused approach towards its products and
Apple
makes 90% of its revenue from 4 product lines
Discontinued CE devices to focus on core
CISCO
business

18. Start Ups in India have started to compete with Large
MNC in attracting senior talent
McAfee Vaultize
Anand A. Kekre
CA Technology Make my trip
Sanket Atal
Yahoo ! Flipkart
Aparna Ballakur
Citrix InMobi
Ratnesh Sharma

19. Incremental interventions or point solutions has not
really helped companies address the challenges
Hiring without Charter
Unstructured capability improvement
initiatives
Random initiatives with no alignment to
organization priorities
Arbitrary Innovation Programs
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20. What can companies do to transform themselves
Inspirational Leadership
Well defined Charter
Organizational Momentum
Accelerated change process

21. Inspirational Leadership - Key to any bold transformation
Passion
Aspiration
Discipline
Inspirational
leadership
Vision
Patience
Courage
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22. Well defined Charter: Some examples
“Bring the next billion on to internet”
“Influence billion dollars in revenue”
“Increase revenue contribution from
emerging markets to 25%”
“Build new business in an area not
related to current focus areas”

23. Gaining Organizational Momentum is possible through
having the right charter…
Topline
Incubate adjacent/ orthogonal global
Build solution through cross BU leverage
Business Units
Build common technology platform Building products for growth Markets
Contribute to N+2 product roadmap
Influence revenue in specific regions
through core research
Technology Charter Business
COE for testing to service multiple
Extend the life of sunset products
product lines
Transition sustenance ownership Strategic outsourcing to 3rd party
Build Flex team to enhance bandwidth Reduce engineering cost
Bottom-line

24. …and getting a buy in from the primary stakeholders
Topline
CTO CEO
Business unit leadership Chief Strategy Officer
Engineering leadership Business unit leadership
Technology Charter Business
CFO CFO
COO Business unit leadership
Engineering leadership Engineering leadership
Bottom-line

25. Different levels of maturity is required for various charters
Product Team Maturity
Engineering Support Module leadership Engineering Leadership Product leadership
Strategic outsourcing to 3rd Build solution through cross BU leverage
party
Building common
technology platform Incubate adjacent/
Build Flex team to orthogonal global
enhance bandwidth Extend the life of sunset Business Units
products
Contribute to N+2 Influence revenue in
Reduce engineering cost product roadmap specific regions
through core research
Building products for growth Markets
COE for testing to service Transition sustenance
multiple product lines ownership
Operational Support Operations Strategic Global Strategic
Independence Independence Partnerships
Center Level Maturity
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26. Transformation is not easy and would require deep
commitment
Portfolio
Realignment Innovation Culture
Key
Enablers
Capability Key Hires –
Development Expats/Locals
Ecosystem
Connect

27. Success Stories
Nearly 1/3rd of the 2010 revenue came from products developed by India R&D
3M center over the last 5 years
BMC Software New business unit (Cloud Solution), bringing in 10% of divisions revenues
Fasal helped farmers increase income by 15 to 20%. Close to 1 mn
Intuit
farmers benefiting from it in AP, Gujarat and Karnataka
EMC Won 2 out of top 3 spots in EMC’s annual Innovation podium in H2 2011
Sold 25,000 tractors in 2011 & exported around 13,000 units to ~68
John Deere
countries including the US and South America
Manhattan Delivered industry’s first and only Supply Chain Process Platform for
Associates cross-application optimization and integration

28. Thank you
info@zinnov.com
www.zinnov.com
69 "Prathiba Complex", 4th 'A' Vatika Business Centre, 3701 Patrick Henry Dr., 21, Waterway Ave,
Cross, Koramangala Ind. Layout, 2nd Floor, Block B, Building 7 Suite 300
5th Block, Koramangala 1st India Place, M.G Road, Santa Clara The Woodlands
Bangalore – 560095 Gurgaon-122002. CA – 95054 TX – 77380
Phone: +91-80-41127925/6 Phone: +91-124- 4028888 Phone: +1-408-716-8432 Phone: +1-281-362-2773
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29. Inspirational Leadership - Key to any bold transformation
Aspirational
Visionary
Motivational
Passionate

30. Social innovation is on the rise
Impacted over 7000 lives through:
• Over 2,000 lenders
Connecting the 2 India's through a • Over $250,000 loans
common platform MILAAP • 100 artisans set up/expanded SMB
• 200 Youth placed
• Solar lighting to 100 families
• 500 water connections & toilets
Medicine solves only a part of the 29000 villages covered with 42
problem … AROGYA million people
Need: An end to end holistic Also, 10% of Novartis India
solution for the not so privileged PARIVAR Revenue comes through this
India program
In India, employment is not a
challenge, continuous Reduced cost of training from INR
employment is – requires identity, LABORNET 50,000 to INR 2500
skills and certification
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