Editorial: Tech gains for Tata Motors

JLR R&D spend puts firm in global top 50

In a first for an Indian company, Tata Motors moved up 55 ranks this year to make it to the Top 50 of the world’s biggest companies in terms of R&D investments—according to European Commission’s EU Industrial R&D Investment Scoreboard, 2015. In the 10th edition of the Scoreboard, Tata Motors—ranked 49th among the 2,500 top R&D firms globally—recorded the largest increase in R&D (108.9%) spend, at 2,345.5 million euros, among the Top 100. However, much of the increase is at the end of its UK subsidiary, Jaguar Land Rover. During 2010-14, Tata Motors led the world with an 859.9% R&D growth, followed by China Railway (365%) and Facebook (359.7%).

While Tata Motors deserves applause for making it to the Top 50, that it was driven by R&D done in the UK and not in India is a sore spot. Now that it has made it to the big listing, Tata Motors could look to increase R&D in India, too. The performance of other Indian companies in the list is nothing much to talk about. The second Indian company in the list, Dr Reddy’s Laboratories is ranked 404th , followed by Mahindra & Mahindra (451st) and Reliance Industries (540th). In sharp contrast, while Huawei is also the only Chinese company in the Top 50, it is followed closely by Petrochina (65), ZTE (83) and China Railway (91). The clear message from this is that Indian companies need to pump prime their R&D budgets. The innovation that is fostered by increased R&D activity could be crucial to their survival and future growth. The Top 50 list is, not surprisingly, dominated by the US with 21 companies, followed by Germany and Japan (8 each), UK, Switzerland, the Netherlands and South Korea (2 each), China, France, Sweden and Finland (1 each). India is ranked 15th with 26 companies in the list. The US leads with 829, followed by the European Union (608), Japan (360), China (301) and Taiwan (114). What has not changed in the list are the top 5 companies—Volkswagen, Samsung, Microsoft, Intel and Novartis. The top 10 consists of ICT, auto and pharmaceutical companies. Across the world, pharmaceuticals and biotechnology leads in total R&D investment (18.2%), followed by automobiles and parts (15.6%) and technology, hardware and equipment (15.4%).  Here, India is quite in sync with the world as pharmaceuticals accounts for 8 Indian companies, followed by automobiles (6) and software (5).

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