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February 13, 2014
Intellectual property creation to drive next phase of growth for IT
Indian IT industry is at the cusp of a transformation with SMAC opening up opportunities for patent creation, says the report
India’s software industry lobby said it expects the next phase of growth to come from creating and monetizing intellectual property (IP) over the next decade, although the domestic information technology (IT) sector’s patents business is still in its infancy.
“We are trying hard to reposition the industry as a whole. India has always been viewed as low cost market for back-end processes, but we have not focused on innovation part of it,” said R. Chandrasekaran, executive vice-chairman, Cognizant India, and vice-chairman of the National Association of Software and Services Companies (Nasscom), an industry lobby.
“We have lost quite a bit of opportunity when it comes to generating intellectual property. Now we want to move up the value chain,” Chandrasekaran said. “At present, in India, filing for a patent is an expensive proposition. We are looking at formal procedures and legal frameworks to regularize the whole process of filing patents.”
The Indian IT industry is at the cusp of a transformation with SMAC (social, mobility, analytics and cloud) opening up opportunities for patent creation, Nasscom and KPMG Advisory Services Pvt. Ltd said in a report released on Wednesday at the India Leadership Forum organized by Nasscom.
A few Indian technology companies invest 2-3% of their revenue in research and development and creating intellectual property, which pales when compared with the 7-8% investment by Silicon Valley-based firms, according to industry estimates.
“Over the next few year, Indian IT companies will have to bridge the gap to reach the level at which multinational companies operate,” said Pradeep Udhas, chairman India Global, KPMG Advisory Services .
According to a survey conducted by KPMG of 100 IT companies worldwide, India and China are at the centre of disruptive technologies after the US. But in India, the low risk appetite of venture capitalist and private equity investors remains the biggest challenge for innovation.
“Indian IT-BPM (information technology-business process management) firms have achieved only limited success in the field of IP, their growth having being initially driven by the cost advantage over North American and European destinations,” said Chandrasekaran.
“In the past decade, Indian firms have acquired the scale and skills necessary to deliver largescale, complex transformation projects. However, the vast majority of these projects are linear in nature, with their revenue directly linked to resources. As far as IP is concerned, most Indian firms are at an initial stage of IP development,” he said.
Following the Silicon Valley model, the Indian IT industry has also started partnering with educational institutions, Chandrasekaran said. The Indian Institute of Technology, Madras, for example, has a business park in Chennai to promote research and development-based tech start-ups.
“If there is adequate support from the rest of the ecosystem such as education institutes, funding agencies and regulatory bodies…Indian IT-BPM industry can reach close to the projected growth rate and be a $300 billion industry by 2020,” said Udhas of KPMG.
The size of India’s IT industry is currently estimated at $108 billion.
Via : LiveMint – Moulishree Srivastava
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