GM banks on India’s low- cost know- how
U. S. firms fund research on subcontinent to tap inexpensive, but expert, engineering skills
At 9 p.m. in
s research and development
laboratory in Warren,
Mich., Anil Sachdev is watching an electron microscope being focused by remote control. A metallurgist 8,420 miles away in Bangalore, India, is working while Mr. Sachdev prepares to head home.
“ We’re trying to get more horsepower per litre, better fuel economy from future engines,” says Mr. Sachdev, General Motors’ manager for light-metals research. The 50 employees in Bangalore already have invented ways to make 2009-model cars more gas-efficient, he says.
India is moving from call centres to innovation. GM,
and
are among companies setting up research institutes to utilize the talents of engineers they can pay less than US$12,000 a year. A grasp of what works in the marketplace may give India an edge over China, its main low-cost competitor for research, says Larry Burns, a General Motors vice-president.
“ You couple a sense of entrepreneurship with an extremely intelligent, technically capable people who understand markets, and that’s what you see happening in India,” says Mr. Burns, who heads research, development and strategic planning at the world’s largest automaker. “India has a leg up on China.”
Some of Detroit-based GM’s Indian mathematicians are creating virtual models that limit the need to build real auto prototypes, he says. Others are honing supply-chain technology first developed by Indian companies.
“ There’s a big difference between knowing math and understanding why math models are important to a business,” Mr. Burns says.
The 184,347 Indian engineers who graduated from the country’s 15,437 colleges last year will lure more overseas companies, says R. A. Mashelkar, director general of the Council of Scientific and Industrial Research in New Delhi.
That in turn will encourage more Indians to seek a science education, increase investment in colleges and bolster economic growth, he says. India’s government says it plans to raise education spending by 39% to US$4.17-billion in the year ending March 31, 2006, from the previous 12 months.
Demand has a price. India already is suffering from a shortage of qualified graduates, Mr. Mashelkar says. State and federal governments need to upgrade colleges to ensure supply, he says.
At least 106 overseas companies have research and development centres in India, according to the Tata Management Training Center in Pune, near Mumbai. The country will be hosting more than 200 such campuses by 2008, says B. Bowonder, the centre’s director.
Fairfield, Conn.-based General Electric, the world’s second-largest company, has centres in both India and China. The difference: 2,200 scientists, researchers and engineers at GE’s Bangalore campus, compared with 1,000 in Shanghai. GE has 22,000 such employees worldwide.
“ Any time we invested in the people in India we made a tremendous amount of money,” says Jeffrey Immelt, GE’s chief executive.
GE has sunk US$80-million into its five-year-old Bangalore centre. Its scientists have applied for 260 patents on such products as synthetic materials and ceramics. The U. S. Patent and Trademark Office has approved 37, according to Purnima Sahni Mohanty, GE’s spokeswoman in India.
For General Motors, the US$21million Bangalore lab set up in September, 2003, was the first campus outside its 85-year-old Warren centre. The company also employs 400 Indian engineers, who work on enhancing and adapting existing models.
Five years ago, only 3% of GM’s scientists were based abroad, mostly to liaise with universities in Israel and China, says Alan Taub, the company’s executive director of research and development. This year, 32% work out of nine countries — half of them in Bangalore and 3% in Shanghai. GM doesn’t disclose the number of scientists it employs.
Research and development in Shanghai is done at the GM-Shanghai Jiao Tong University Technology Institute, a joint venture set up in 1998. General Motors also runs a second joint-venture centre in Shanghai, where 800 engineers tailor auto models for the Chinese market, the automaker’s largest outside the United States.
“If GM is going to grow across the globe, it has to develop its technology globally,” says Mr. Sachdev, the scientist in Warren. He was a driving force behind GM’s India move, says Mr. Taub, his boss. An Indian national, Mr. Sachdev and three U.S.-based compatriots successfully lobbied Mr. Taub to visit Bangalore in 2001.
Mr. Taub recalls the trip as a personal disaster. He was stranded by the Sept. 11 attacks in the United States and bedridden with food poisoning.
“Despite all that, when I left I was convinced this was an undiscovered talent pool for the company,” says Mr. Taub, who credits India’s military aerospace industry for developing its scientific flair. “Until you get there and see it, you don’t understand.”
GM’s chief scientist in India, B.G. Prakash, is a 16-year veteran of the Bangalore-based Aeronautical Development Agency. India’s government set up the centre in 1984 to design light- combat aircraft.
Mr. Prakash has a doctorate in mathematics from the Indian Institute of Technology in Mumbai, one of seven elite science campuses in the country.
But the outsourcing of U.S. jobs to people like Mr. Prakash discourages U.S. freshmen from pursuing science careers, says Richard Heckel, a professor emeritus at Michigan Technological University in Houghton, Mich.
About 71,000 engineers emerged from U. S. colleges in 2003, says the American Society of Engineering Education in Washington. Graduate numbers are likely to peak at 78,000 in the next few years and then start to fall, Mr. Heckel says.
“ The Pacific Rim is the centre of engineering education,” says Mr. Heckel, singling out India, Japan, China and South Korea. “It’s got to hurt this country. I’m not sure how we’re going to work our way out of it.”
Overseas companies also hire Indian scientists from 38 laboratories run by the government’s Council of Scientific and Industrial Research. They tap the government’s 33-year-old Indian Space Research Organization in Bangalore and neighboring Hindustan Aeronautics Ltd., a state-owned company that has designed 12 aircraft during the past 41 years.
For General Motors, those scientists have developed composite materials that make cars lighter, increasing performance. General Electric’s dishwashers are quieter because Indians used aerospace technology to help cut vibrations.
“ We are able to get people here who are experienced in aeronautics, space research, electronics, applied engineering, mathematics, physics and chemistry,” says GM’s Mr. Prakash. “Bringing in this type of diversified talent to look at automotive applications from a different perspective is a great opportunity.”
Salary disparities also work in India’s favour. An engineer starting out with a master’s degree earns US$11,486 on average a year, says Vikram Jayaram, chairman of the placement centre at Bangalore’s Indian Institute of Science. That compares with a median of US$54,411 in the United States, according to Salary.com Inc., which runs a wageinformation Web site in Needham, Mass.
Companies don’t save on salaries unless scientists avoid making mistakes, says Biswadip Mitra, managing director in India for Texas Instruments, the second-largest U.S. semiconductor maker.
Dallas-based Texas Instruments was the first overseas company to open an Indian research and development campus. It started with 15 engineers developing automated software for computer chips in Bangalore in August, 1985, and now has 1,200 employees designing new computer chips used in phones. Texas Instruments (India) Ltd. had filed for 272 patents as of early this year, Mr. Mitra says.
“The major companies, along with universities and customers, form an ecosystem,” he says. The pooling of expertise gives India special advantages.
Even so, Indian researchers in advanced technologies are in short supply, says Ajay Gupta, the director at HP Labs, Hewlett-Packard’s research unit in Bangalore.
In addition, the growth of software and services industries is drawing engineers away from graduate study and research, Mr. Gupta says. As more companies set up in India, supply will be tested further.
Governments need to upgrade at least 100 engineering and technology colleges to meet the demand for engineers alone, says Mr. Mashelkar of the Council of Scientific and Industrial Research. “To produce quality manpower in larger numbers is going to be a challenge,” he says.
At Texas Instruments’ Bangalore lab, Mr. Mitra’s team is busy accessing extra computers at the company’s Dallas headquarters to speed up the design of new chips. Seven of Japan’s eight cellphone makers now use processors designed in India, Mr. Mitra says.
While GM’s Michigan scientists are sleeping, Shashank Tiwari, 25, is manipulating their microscope to understand how a mix of copper, iron and silicates changes an aluminum casting.
“ If I have US$ 1 and I have to decide today to get the maximum research output of the best quality, then the place will be India,” Mr. Mashelkar says. “ How quickly a company assembles skills from the very best intellect anywhere in the world and uses it to create any product, that’s going to be the winning strategy.”
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