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India : Innovation and patents Sector Report_August 2013

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  • 1.       
  • 2. Source: Planning Commission, Aranca Research Note: R&D - Research and Development Seventh-largest R&D investor • In 2012, India had the world’s seventh-largest annual R&D investment, accounting for 2.8 per cent of global R&D expenditure; this is expected to increase to USD45.2 million by 2013, accounting for 3.0 per cent of global R&D spending Pharma sector driving R&D growth • India’s pharmaceutical industry, which accounts for about 1.4 per cent of the global pharmaceutical industry in value terms and 10 per cent in volume terms, is expected to remain a major R&D growth driver Rapidly growing overseas investment • Cumulative overseas direct investments by India has expanded at a CAGR of 47.4 per cent to USD146 billion during FY13 from USD21 billion in FY06 World’s sixth most innovative country • India stood sixth in terms of the most "innovative" country in General Electric's Annual Global Innovation Barometer in January 2013
  • 3. • The engineering sector is delicensed; 100 per cent FDI is allowed in the sector • Due to policy support, there was cumulative FDI of USD14.0 billion into the sector over April 2000 – February 2012, making up 8.6 per cent of total FDI into the country in that period Growing demand Source: 2012 R&D spending estimate by Battelle, Automotive Research Association of India, Aranca Research Notes: IPR - Intellectual Property Rights, CoE - Center of Excellence, PPP - Public Private Partnership, TRIPS - Trade Related Aspects of Intellectual Property Rights, NMITLI - New Millennium Indian Technology Leadership Initiative, E - Estimate, NIC - National Innovation Council Robust demand • Rising income and evolving lifestyles have led to higher demand for aspirational products • Indian companies’ investments in R&D is not surprising given the importance of innovation to sustain competitive edge Attractive opportunities • Vast opportunities in IT, pharmaceuticals, automobiles, biotechnology and agriculture • India is the largest exporter of IT products and has the third largest pharma sector with a fast growing contract research segment Policy support • PPP for promoting exchange of scientific knowledge and R&D • Strengthening educational infrastructure • Amendments to the Patents Act (1970) to make it TRIPS-compliant • Setting up of NIC in 2010 • Adoption of Science, Technology and Innovation Policy 2013 High ratings • Establishment of CoEs in various areas; NMITLI initiative on PPP basis • Increased investments by private players; setting up of R&D centers • During FY07–13, IPR applications increased at a CAGR of 11.8 per cent from 137,900 to 269,500 2011 R&D spending: USD38 billion 2013E R&D spending: USD45.2 billion Advantage India
  • 4. Source: Korn/Ferry International, Asia-Pacific Research center, Stanford University, Aranca Research Notes: TRIPS - Trade Related Aspects of Intellectual Property Rights, WTO - World Trade Organisation • Indian Patents and Designs Act (1911) • Dependence on bulk imports • Establishment of CSIR, DRDO, ICAR, ISRO and IITs • Patents Act (1970) • Recognition of process patents only • Restricted foreign ownership in Indian companies • Focus on ‘reverse engineering’ among pharmaceutical companies • TRIPS under WTO (1995) • Amendments to the Patents Act (1970) to make it TRIPS compliant • Reintroduction of product patents • Reduction in tariff and non-tariff measures • Easing FDI norms • Shifting focus in pharma towards clinical research and new drug development Before 1970 Introductory Stage 1970 to early 1990s Indigenisation Stage Early 1990s to 2005 Liberalisation and Transition Era 2005 onwards Growth Era • Augmentation of network of centrally-funded institutions and universities • Increase in R&D and exports in sectors such as IT, pharma, electronics and automobiles • Innovations in automobiles such as Nano, the world’s least expensive car • Focus on discovery of new chemical entities by pharma companies • Numerous innovations from rural India • Setting up of National Innovation Council • Adoption of Science, Technology and Innovation Policy 2013
  • 5. Source: Department of Industrial Policy and Promotion, Aranca Research Intellectual Property (IP) Patents Trademarks Geographical Indications Industrial Designs Layout Designs Plant Variety Protection Copyright
  • 6. Source: Battelle, Aranca Research Notes: GERD - Gross Domestic Expenditure on R&D, R&D - Research and Development Forecasted Expenditure of World’s Leading R&D Investors in 2013 (USD Billion) In 2012, India was the seventh-largest country in terms of R&D investments, up from eighth largest in 2011 It is expected to retain this position in 2013, with R&D investments increasing to USD45.2 billion from USD38 billion in 2011 32 39 42 45 51 58 91 162 220 424 Brazil Russia United Kingdom India France South Korea Germany Japan China United States
  • 7. Source: Battelle, Aranca Research Notes: CAGR - Compound Annual Growth Rate; PPP - Purchasing Power Parity, F - Forecast R&D Spending in India (USD Billion)India’s share of global R&D spending rose to 2.8 per cent in 2012 from 2.6 per cent in 2010 and is forecasted to reach 3.0 per cent by 2013 India’s R&D investment growth is likely to outpace overall GDP growth. During 2010–13, R&D spending (in terms of PPP) is expected to expand at a CAGR of 11.6 per cent to USD45.2 billion, while GDP (in terms of PPP) would increase at a CAGR of 7.8 per cent The Planning Commission of India expects to double the government’s R&D spending from the current 0.9 per cent of GDP to 2 per cent by 2017 33 38 40 45 0.80% 0.85% 0.85% 0.90% 0.75% 0.78% 0.81% 0.84% 0.87% 0.90% 0.93% 0 10 20 30 40 50 2010 2011 2012 2013F R&D expenditure (PPP) AS a % of GDP -RHS
  • 8. Source: Reserve Bank of India, Battelle, Aranca Research Cumulative Overseas Direct Investment (USD billion) Cumulative overseas direct investments increased to USD146 billion in FY13 from USD21 billion This has led to significant amount of technology transfer through industrial acquisitions For instance, Tata Steel’s takeover of Corus brought with it more than 80 patents and 1,000 researchers 21 38 56 100 125 146 FY08 FY09 FY10 FY11 FY12 FY13
  • 9. Source: Department of Industrial Policy and Promotion Aranca Research Break-up of Intellectual Property Rights (IPR) Applications (FY13) During FY13, the total patent applications stood at 269.5 thousand Trademark applications accounted for the largest share (79 per cent) of total applications at 212,900 Patent and design applications accounted for 17.6 per cent (47,300 applications) and 3.4 per cent (9,200) share, respectively 18% 3% 79% Patent-LHS Design -LHS Trade mark application -LHS
  • 10. Source: Department of Industrial Policy and Promotion Aranca Research Intellectual Property (IP) applications (‘000)During FY07–13, intellectual property rights (IPR) applications increased at a CAGR of 11.8 per cent from 137,900 to 269,500 Trademark applications expanded at a CAGR of 12.8 per cent over FY07–13 to 212,900 Patent and design applications rose at a CAGR of 8.6 per cent and 8.9 per cent, respectively, during the same period Growing IP application activity indicates increased in-house R&D and innovation in India 0 50 100 150 200 250 300 0 50 100 150 200 250 FY07 FY08 FY09 FY10 FY11 FY12 FY13 Patent-LHS Design -LHS Trade mark application -LHS Total IPR applications -RHS
  • 11. Source: Zinnov Consulting, The Indian R&D Landscape, 2012 Notes: CAGR - Compound Annual Growth Rate, R&D - Research and Development, MNC R&D Centers in IndiaThe number of MNC R&D centers in India has grown at a CAGR of 16.4 per cent to 871 Around 30 per cent of the top 1,000 global R&D spending organisations have centers in India Most of the centers are located in metro cities – Bengaluru, Delhi, Mumbai, Chennai and Hyderabad. However, MNCs have begun spreading out to tier-2 cities after 2005 India’s robust talent pool of over 200,000 engineers has grown at an average rate of 9 per cent over the last five years; this has been supporting increased R&D activity 191 297 517 699 780 871 Pre 2000 2002 2004 2006 2008 2011 CAGR: 16.4%
  • 12. Source: Zinnov Consulting, The Indian R&D Landscape, 2012 Notes: CAGR - Compound Annual Growth Rate, R&D - Research and Development MNC R&D centers Distribution in India (2012)Bengaluru (erstwhile Bengaluru) has 43 per cent of MNC R&D centers, followed by Mumbai and Pune at 19 per cent Until 2005, Tier-1 cities were the favourite destination for MNCs due to the availability of rich talent, favourable policies, and better quality of life However, post-2005, MNCs have started expanding to Tier- 2 cities, as they offered benefits such as higher catchment area, lower attrition, and cost arbitrage Bengaluru 43% Mumbai/ Pune 19% Hyderabad 13% NCR 11% Chennai 10% Others 4%
  • 13. Source: Financial Express, Value Notes, Aranca Research, Notes: R&D - Research and Development, IT - Information Technology; CAGR - Compound Annual Growth Rate R&D Outsourcing in India (USD Billion)R&D outsourcing has increased at a CAGR of 33.5 per cent during 2003–11 to USD13.1 billion Companies across sectors (such as IT, consumer electronics, personal devices, medical electronics, telecom and automobiles) are now offshoring complete product responsibility India has become one of the most preferred location for engineering offshoring By 2020, USD42 billion worth of work related to R&D of product engineering is expected to be outsourced to India 1.3 13.1 2003 2011 CAGR: 33.5%
  • 14. Source: Organisational websites, Aranca Research Notes: R&D - Research and Development Organisation Business description Council of Scientific and Industrial Research (CSIR) • CSIR is India’s largest R&D organisation, with 39 laboratories and 50 field stations. In FY12, CSIR had over 1,872 active patents in India, 813 in the US, 328 in the EU, 147 in Japan and 829 in other countries • It is engaged in scientific industrial R&D for economic, environmental and societal benefits for the country • Its research areas span across aerospace, biotechnology, chemicals, energy, foods, information dissemination, leather and metals, minerals and manufacturing etc. Defence Research and Development Organisation (DRDO) • DRDO is engaged in design and development of weapon systems and equipment in accordance with the requirements of the military services • In 2012, DRDO had a network of 50 labs and establishments to carry out research. It has over 5,000 scientists and about 25,000 other scientific, technical and supporting personnel • Its research areas include aeronautics, armaments, combat vehicles, electronics, instrumentation engineering systems, missiles, materials, naval systems, advanced computing, simulation and life sciences Indian Council of Agricultural Research (ICAR) • ICAR is one of the largest national agricultural organisations in the world. It consisted of 99 institutes and 53 agricultural universities across India in 2012 • It is the apex body for coordinating, guiding and managing research and education in agriculture, including horticulture, fisheries and animal sciences in India *This list is indicative
  • 15. Organisation Business description India Space Research Organisation (ISRO) • ISRO is engaged in development of space technology and its application to various national tasks • The organisation has 19 centers across India to pursue R&D activities • Its research areas include communication satellites for television broadcast, telecommunications and meteorological applications, and remote sensing satellites for management of natural resources Indian Council of Medical Research (ICMR) • ICMR is the apex body in India for the formulation, coordination and promotion of biomedical research and one of the oldest medical research bodies in the world • The council has a fleet of 21 institutes, six regional medical research centers and five units engaged in medical research • The council’s research priorities encompass the areas of communicable diseases, fertility control, maternal and child health, nutritional disorders, and non-communicable diseases such as cancer, cardio-vascular diseases, blindness and diabetes Centre for Development of Advanced Computing (C-DAC) • C-DAC is a premier R&D organisation of the Department of Information Technology (DIT) • It is engaged in research in the areas of supercomputers, applied electronics, technology, applications and health informatics. • CDAC has filed 16 patent applications in FY11 Source: Organisational websites, Aranca Research Notes: R&D - Research and Development *This list is indicative
  • 16. Organisation Business description Indian Institutes of Technology (IITs) • It is a group of autonomous engineering and technology oriented institutes of higher education • In FY11, IITs filed the highest number of patent applications amongst all the institutes and universities in India. IIT Bombay filed 77 patent applications in 2011, an increase of 400 per cent from that in 2006 National Dairy Research Institute (NDRI) • NDRI is engaged in research, teaching and extension activities in areas of dairy production, processing, management and human resource development • Its research activities focus on improving dairy productivity, innovating milk processing technologies and disseminating information to the various stakeholders in dairy business to make dairying a self-sustaining business • In 2012, R&D activities comprised 71 in-house and 46 externally funded research projects, including 20 NAIP projects in consortium mode with financial outlay of USD7.1 million Indian Institute of Science (IISc) • IISc is one of the earliest instances of PPP for a research institute in India • It is engaged in research in various departments of science such as biological, chemical, electrical, mathematical, physical and mechanical sciences • In FY10, the institute filed the third highest number of patent applications amongst all the institutes and universities in India Source: Organisational websites, Aranca Research Notes: R&D - Research and Development*This list is indicative
  • 17. Organisation Business description The Energy and Resources Institute (TERI) • TERI is engaged in developing solutions to global problems in fields of energy, environment and sustainable development • The important research areas include biotechnology, earth science and climate change, technology development, social transformation, and modelling and economic analysis Institute of Life Sciences (ILS) • ILS undertakes basic and translational research in frontier areas of life sciences • The institute’s research interests are in the areas of infectious disease biology, gene function and regulation, and translation research and technology development Indian Institute for Advanced Studies (IIAS) • IIAS is a residential centre for advanced research in humanities, social sciences and natural sciences • Its major research areas include social, political and economic philosophy; comparative studies in philosophy and religion; education, culture and arts; natural and life sciences; and national integration and nation building Source: Organisational websites, Aranca Research Notes: R&D - Research and Development *This list is indicative
  • 18. Organisation Business description Hindustan Unilever Limited • HUL is credited with innovations in product areas such as structured bar soap, fairness cream, zero alcohol soap, poly-coated scouring bar for dishwashing, fortified salt, instant tea, critical components for a water purifying device, and value-added (nature care) tea • Worldwide, HUL has over 20,000 registered patents and patent applications • The company filed 57 patent applications and was one of the top Indian patentees in FY11 Tata Steel Limited • Tata Steel undertakes research in areas such as raw materials and coke, iron and ferro alloys, steel making, coated products, materials characterisation and joining, materials modelling and product design, and refractory technology • The company filed 42 patents in FY12, taking its IP portfolio (filed and granted patents and copyrights) from 32 in FY2000 to 493 Cipla Limited • Cipla’s R&D division focuses on new product development and new drug delivery systems across a range of therapies • In FY12, the company’s total R&D spending stood at USD59.2 million, a growth** of 13.6 per cent from a year ago • In 2011, Cipla filed 260 patent applications across the globe of which 13 were filed in India Source: Organisational websites, Aranca Research Notes: R&D - Research and Development, Growth** - In terms of INR *This list is indicative
  • 19. Reaper Windrower Machine • For easy and timely harvesting of soybean crop • Prevents shattering of soybean pods due to non-availability of labourers for harvesting the crop in time Hand Operated Water Lifting Pump • For convenient water-lifting at a good discharge rate and low cost • The pump was built in response to a dearth of available pumps that could be afforded by small farmers Bamboo Lathe Machine • For stripping off the outer covering of bamboo to develop a smooth surface for making interior decoration and utility items • Reduces the time and labour required to do the job manually Pedal Operated Washing Machine • For washing clothes while exercising on a pedal machine • An affordable and convenient way of washing clothes in rural India which experiences frequent power shortages Source: Rediff Business, Aranca Research
  • 20. Source: Times of India, Economic Times, The Hindu, Defence Now Notes: ICBM - Inter-Continental Ballistic Missile, DRDO - Defence Research & Development Organisation, HSL - Hindustan Shipyard Limited INS Vikrant • India Indigenous Aircraft Carrier (IAC) • Total displacement of over 40,000 tonnes • Being built by Cochin Shipyard Limited • To be inducted by 2014-16 Agni-V missile • Successfully test fired in April 2012 • India joined an elite group of nations having ICBM technology • Indigenously developed by DRDO • To be inducted by 2014-15 Arihant Class Submarines • With its launch in 2009, India joined an elite group of nations having nuclear-powered submarines • Developed by HSL • To be commissioned by 2012-13 Tejas • Second supersonic aircraft to be developed indigenously by Hindustan Aeronautics Limited (HAL) • To be inducted by 2015 at a cost of USD103.1 million
  • 21. Source: Battelle, Electronics for You, Organisational websites, Aranca Research Notes: PPP - Public Private Partnership, R&D - Research and Development, NMITLI - New Millennium Indian Technology Leadership Initiative, CoE - Centre of Excellence, NIC - National Innovation Council Policy support PPP in R&D Strengthening educational infrastructure Amendments to the Patents Act & Setting up of NIC Inviting Resulting in Growing Demand Evolving consumer lifestyles Liberalisation and increasing competition Proximity to future growth markets Increasing Investments Establishment of CoEs, NMITLI initiative Providing support to global projects from India Increasing corporate R&D investments
  • 22. Source: Aranca Research R&D spending by top six pharma giant in FY12 (USD million) India’s pharmaceutical market is highly fragmented, with 300 large and 18,000 mid-sized and small companies The country’s pharma industry accounts for about 1.4 per cent of the global pharma industry in value terms and 10 per cent in volume terms The healthcare sector in India is expected to reach USD100 billion by 2015 from the current USD65 billion This would help drive R&D growth in India; the average R&D expenditure by Indian pharma companies is close to 6 per cent of total revenues In FY12, total R&D spending by top six pharma companies was USD503.5 million 130 124 98 59 39 36 16 Dr.Reddy's Labs Lupin Ranbaxy Cipla Piramal Healthcare Wockhart Orchid Chemicals
  • 23. PPP in R&D • Exchange of scientific knowledge between research centers, national laboratories, institutes of higher learning and the industry • The Indian Government plans to involve the private sector in R&D mainly for sectors like vaccines, drugs and pharmaceuticals, super computing, solar energy and electronic hardware • The government has shell out a USD1.1 billion public-private partnership fund to support research and development in India Funded Institutions and Foreign Universities • Increasing the number of Indian Institutes of Technology (IITs) to 16, establishing 3 new Indian institute of Science Education and Research (IISER) and 30 central universities • Foreign universities permitted to enter the higher education system in India by establishing their own campuses or joint ventures with existing universities Tax Incentives • Government offers 200 per cent deduction for capital and revenue expenditure incurred by manufacturing companies with in-house R&D • Income tax exemption of 125 per cent to 175 per cent on donations made to universities, colleges and other scientific associations Source: Battelle, Electronics for You, Organisational websites, Aranca Research Notes: PPP - Public Private Partnership
  • 24. Patents Act • Amendments to the Patents Act, 1970 to make it TRIPS compliant • Increased incentives to domestic firms to conduct R&D • Increased likelihood of technology transfer from developed nations National Innovation Council (NIC) • In 2010, NIC was set up to implement strategies for inclusive innovation in India and prepare a roadmap for innovation over 2010-20 • Tasks of NIC include creating a framework to encourage innovation by central and state governments, universities, R&D institutions and SMEs Source: Battelle, Aranca Research Notes: SMEs - Small and Medium Enterprises
  • 25. Source: Aranca Research Introduction of STI Policy 2013 • In January 2013, the government of India introduced the Science, Technology and Innovation (STI) policy 2013 at the centenary sessions of the Indian Science Congress held at Kolkata Vision of STI Policy • The STI policy is aimed at helping India become one of the top five global scientific powers by 2020 Rising Involvement of The Private Sector • STI aims to boost innovation through research and development (R&D) led by the public- private partnership (PPP) mode thereby increase the investments on research and development (R&D) to 2 per cent of GDP by 2017 from current 1 per cent Increase in Human Resources • The policy seeks to increase the number of full-time R&D personnel by 66 per cent over 2013–17 and expand the number of publications from the current 3.5 per cent of global share to around 7 per cent by 2020
  • 26. 2013 • Jan 13: DuPont is planning to double their R&D activities in India • Jun 13: Huawei will be setting up a new research and development (R&D) centre in Bengaluru with an investment of USD150 million 2012 • Mar 12: Aditya Birla Group launches R&D centre at Navi Mumbai, developed at a cost of about USD52 million • Apr 12: Maruti Suzuki announces an investment of USD500 million to set up an R&D facility at Rohtak • Jun 25: Chinese equipment maker Huawei will invest USD2 billion to set up global R&D center • Nov 23: General Electric will invest USD60 million to expand its R&D facility; its is expected to develop 30 new products by 2015 Source: India Electronic News, Moneycontrol, CNBC, Economic Times, Appliancemagazine.com, Business Standard, The Hindu, Company websites, Aranca Research Notes: R&D - Research and Development
  • 27. 2011 • Apr 11: Hitachi to invest USD400 million to set up R&D center in Bengaluru • May 11: ISRO announces setting up of spacecraft R&D center on 530 acres land at Chitradurga • Oct 11: Saab AB and Mahindra Satyam open an R&D center in Hyderabad for conducting research in aerospace, defence and civil security 2010 • Jan 10: Huawei allocates USD500 million investment for R&D center in Bengaluru • May 10: Bridgewater opens center of Excellence in Gurgaon for telecom software R&D • Aug 10: Alstom earmarks USD39 million to establish R&D center for power products at the Infosys campus 2009 • Jun 09: LG Electronics doubles its annual R&D investment outlay to USD83 million • Oct 09: Tata DoCoMo sets up R&D center for value- added services (VAS) and mobile applications • Oct 09: Hyundai sets up R&D center at Hyderabad at an investment of USD25 million Source: India Electronic News, Moneycontrol, CNBC, Economic Times, Appliancemagazine.com, Business Standard, The Hindu, Company websites, Aranca Research Notes: R&D - Research and Development
  • 28. Source: India Electronic News, Moneycontrol, CNBC, Economic Times, Appliancemagazine.com, Business Standard, The Hindu, Company websites, Aranca Research Notes: R&D - Research and Development Centers of Excellence (CoEs) • The government has set up CoEs based on the PPP model for technology development and transfer, scientific research, human resource development and economic outreach • CoEs have been set up in the areas of telecom, wireless technology, bio- informatics, lasers and optoelectronic devices and nano-electronics NMITLI • The programme identifies areas for development based on national consultation and invites best partners from institutions, academia and private sector to play a role in the process • NMITLI has initiated 60 largely networked projects in diverse areas involving 85 industry partners and 280 R&D groups from different institutions with investment outlay of USD114 million Centrally Funded Institutes • The government proposes to establish 8 new IITs, 3 IISERs, 10 NITs and 20 IIITs by 2012 • These institutes together account for over 80 per cent of the total PhDs in engineering in India • The institutes are also amongst the top Indian applicants for patents from the ‘institutes and universities’ category Central and Foreign Universities • Government is expected to have set up 30 new central universities by 2012 • New universities in 16 uncovered states • The remaining 14 new Central Universities will be set up as world class centers of excellence at different locations • Foreign universities permitted can enter higher education system in India by having their own campuses or joint ventures with existing universities
  • 29. Source: Lupin website Note: API - Active Pharmaceutical Ingredient, CNS - Central Nervous System, NSAIDS - Non-Steroidal Anti-Inflammatory Drugs, TB - Tuberculosis, NCE - New Chemical Entity Patents filed by LupinLupin is a renowned pharma player having a wide range of quality, affordable generic and branded formulations and APIs Lupin has emerged as the fifth largest and among the top five fastest-growing companies in the US It is one of the world’s largest manufacturers of TB drugs and has significant market share in the cardiovascular, diabetology, asthma, paediatrics, CNS, Anti-infectives and NSAIDs therapy segments By FY12, Lupin’s total patent filing reached 1,024 up from 600 in FY08 38 26 75 42 26 84 42 12 5 14 17 43 FY09 FY10 FY11 FY12 Formulation Patents API/Process patents NCE patents
  • 30. Source: Lupin website Note: CAGR - Compound Annual Growth Rate CAGR* - Growth in INR terms Lupin net sales (USD million)Its revenues increased from USD822.5 million in FY09 to USD1.7 million in FY13, at a CAGR* of 25.8 per cent Advanced market formulations comprised nearly 52 per cent of its revenues in FY12 822 1,007 1,271 1,474 1,742 FY09 FY10 FY11 FY12 FY13 CAGR*: 25.8%
  • 31. Source: Office of the Controller General of Patents, Designs and Trademarks 2009–10 Annual Report, Company Annual Reports, Aranca Research Indian IT Patent Applications (FY10)Infosys filed the highest number of patent applications in the Indian IT sector, followed by LG Soft India and C-DAC Research activity for different areas is allocated amongst dedicated labs such as Software Engineering lab, Convergence lab, Security and Privacy lab, Distributed Computing lab and E-Com lab 6 6 6 7 23 Samsung India Newgen C-DAC LG Soft India Infosys
  • 32. Source: Company Annual Reports, Aranca Research: Note: CAGR - Compound Annual Growth Rate, * CAGR calculated on rupee numbers Income and net profit (USD billion)During FY06–13, the company’s revenues increased at a CAGR* of 19.3 per cent to USD7.4 billion from USD2.2 billion During the same period, net profit expanded at a CAGR of 17.8 per cent to USD1.7 billion from USD552 million Infosys spent USD167 million in R&D expenses, up 80 per cent from the USD92 million spent in FY10 Consequently, total R&D spending during FY13 came in at 2.3 per cent of total revenue 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 0 1 2 3 4 5 6 7 8 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
  • 33. Source: Economic Times, Company Annual Reports, Aranca Research Note: CAGR: Compound Annual Growth rate, * CAGR calculated in Indian Rupee terms Strong Research and DevelopmentIncorporated in 1933, HUL is India’s leading company by sales in the fast-moving consumer goods (FMCG) sector in India. British-Dutch company Unilever owns a majority stake of 52 per cent in HUL In 2012, Forbes recognised HUL as the world's sixth most innovative company; it was the highest ranked FMCG company in the list Eighteen of HUL’s brands featured in the ‘100 Most Trusted Brands’ 2012 survey carried out by Brand Equity HUL was felicitated for receiving the highest number of patents in 2009 at the Annual Intellectual Property Awards 2010 The company has over 20,000 registered patents and patent applications worldwide 891 994 1,612 FY10 FY11 FY12 CAGR*: 34.5%
  • 34. Source: Company Annual Reports, Aranca Research Notes: FY09* represents data for 15 months (Jan 2008- march 2009) as the company changed it reporting period from calendar year to Fiscal year, CAGR* - Compound Annual Growth Rate; CAGR is calculated in INR Sales (USD billion)During FY05–13, HUL’s revenues increased at a CAGR* of 12.0 per cent to USD4.9 billion from USD2.6 billion During FY12, the company spent USD336 million in R&D, up 62 per cent from the USD218 million spent in FY11 2.6 2.9 3.7 4.7 3.8 4.5 4.8 4.9 2005 2006 2007 FY09* FY10 FY11 FY12 FY13 CAGR*: 12.0%
  • 35. Source: Company Annual Reports, Aranca Research Note: CAGR* - Compound Annual Growth Rate Total Application for Patents, Design and Copyrights Filed Tata Motors, a subsidiary of the Tata Group, is one of the leading automobile company and has presence in 129 countries across six continents Tata Motors is the leading commercial vehicle manufacturer and the third-largest passenger vehicle manufacturer in India It is also the world’s fourth-largest truck manufacturer by volume During FY06–12, the number of applications for patents, design, and copyrights filed by the company expanded at a CAGR* of 16.4 per cent to 212 in FY12 Tata Motors’ Tata Indica is India's first indigenously developed passenger car Tata Nano, a USD2,100 car, is an indigenous example of India’s innovation in the automobile segment 43 34 254 314 272 182 212 FY06 FY07 FY08 FY09 FY10 FY11 FY12 CAGR*: 16.4%
  • 36. Source: Company Annual Reports, Aranca Research Notes: R&D - Research and Development, CAGR - Compound Annual Growth Rate; CAGR is calculated in INR terms Total Application for Patents, Design and Copyrights Filed During FY06–13, Tata Motors’ revenues increased at a CAGR* of 31.8 per cent to USD34.8 billion from USD6.2 billion The company’s R&D spend expanded at a CAGR of 16.4 per cent to USD323.1 million in FY12 from USD176.0 million in FY07 6 8 10 16 20 28 36 35 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 CAGR*: 31.8%
  • 37. Source: ARAI, Business Standard, India Law Office, Aranca Research Notes: IT - Information Technology, ARAI - Automotive Research Association of India, NVH - Noise, Vibration and Harshness Pharma and Healthcare • Contract research is a fast growing segment in the Indian healthcare industry • Indian pharmaceuticals market is anticipated to expand at a CAGR of 17.2 per cent over 2011-2016 to touch USD27.3 billion • India’s huge population places it among the world’s largest markets for vaccines and drugs Information Technology (IT) • India is increasingly seen as a product development destination • Companies are now offshoring complete product responsibility including complex services like product management Automobiles • Research is being carried out by individual companies as well as industry associations such as ARAI in various areas such as structural dynamics, safety, NVH and electronics • India is the sixth largest auto market globally and is poised to become the third largest by 2020
  • 38. Source: ARAI, Business Standard, India Law Office, Aranca Research Notes: IT - Information Technology, ARAI - Automotive Research Association of India, NVH - Noise, Vibration and Harshness Biotechnology • Protein and antibody production, and fabrication of diagnostic protein chips are promising areas for investment • Stem cell research, cell engineering and cell-based therapeutics are other areas, wherein India will cash in its expertise Agriculture • India has the potential to become a major producer of transgenic rice and several genetically modified (GM) or engineered vegetables • Hybrid seeds, including GM seeds, represent new business opportunities in India based on yield improvement
  • 39. Automotive Research Association of India (ARAI) Survey No 102, Vetal Hill, Off Paud Road, Kothrud, Pune - 411 038 Tel: 91-020 30231111 Fax: 91-020 25434190 E-mail: info@araiindia.com Website: www.araiindia.com Indian Society for Clinical Research (ISCR) c/o Pfizer center, 5, Patel Estate, S.V.Road, Jogeshwari(West), Mumbai-400 102 Tel: 91-022 26774140, 66932028 E-mail: info@iscr.org Website: www.iscr.org The South India Textile Research Association (SITRA) 13/37, Avanashi Road, Coimbatore - 641 014 Tel: 91-422 2574367, 6544188 Fax: 91-422 2571896 Email : sitraindia@dataone.in Website: www.sitra.org.in
  • 40. API: Active Pharmaceutical Ingredient ARAI: Automotive Research Association of India CAGR: Compound Annual Growth Rate CoE: center of Excellence DRDO: Defence Research and Development Organisation FDI: Foreign Direct Investment FY: Indian Financial year (April to March) So FY10 implies April 2009 to March 2010 GDP: Gross Domestic Product GERD: Gross Domestic Expenditure on Research and Development HAL: Hindustan Aeronautics Limited HSL: Hindustan Shipyard Limited
  • 41. IAC: Indigenous Aircraft Carrier ICBM: Intercontinental Ballistic Missile IT: Information Technology NMITLI: New Millennium Indian Technology Leadership Initiative NVH: Noise Vibration and Harshness PPP: Public Private Partnership PPP: Purchasing Power Parity R&D: Research and Development TRIPS: Trade Related Aspects of Intellectual Property Rights USD: US Dollar WTO: World Trade Organisation Wherever applicable, numbers have been rounded off to the nearest whole number
  • 42. Year INR equivalent of one US$ 2004-05 44.95 2005-06 44.28 2006-07 45.28 2007-08 40.24 2008-09 45.91 2009-10 47.41 2010-11 45.57 2011-12 47.94 2012-13 54.31 Exchange Rates (Fiscal Year) Year INR equivalent of one US$ 2005 45.55 2006 44.34 2007 39.45 2008 49.21 2009 46.76 2010 45.32 2011 45.64 2012 54.69 2013 54.45 Exchange Rates (Calendar Year) Average for the year
  • 43. India Brand Equity Foundation (“IBEF”) engaged Aranca to prepare this presentation and the same has been prepared by Aranca in consultation with IBEF. All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of IBEF. This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the information is accurate to the best of Aranca and IBEF’s knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice. Aranca and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation. Neither Aranca nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation.