‘Only through heavy investment in R&D’: Zoho’s Sridhar Vembu explains how India can make companies like Apple, Google

By Jessica On Dec 29, 2022

Only ‘heavy investment’ in research and development (R & D) can help India develop companies such as Apple, Google and others, Zoho CEO Sridhar Vembu said on Thursday, as he explained, in a Twitter thread, how the country can come up with globally competitive companies like these.

1/ How can India produce globally competitive companies like Apple, Google, Pfizer, Samsung, Honda, Boeing, Siemens, TSMC or Huawei?

Why are these companies so important to their host nations?

Is India on a path to producing these companies?

I will explore these quesrions.

— Sridhar Vembu (@svembu) December 28, 2022

At present, however, India is nowhere close to producing globally competitive firms, Vembu observed.

7/ Finally, is India on a path to producing such companies? On present trajectory, no.

Indian private sector is not investing sufficiently in R & D. We have not created the culture and mental habits of being R & D driven companies. We must build the culture first. Yes we can. ????

— Sridhar Vembu (@svembu) December 28, 2022

The Padma Shree awardee first explained the ‘Why’ part of the question: ‘Can India produce globally comptitive companies like Apple, Google, Pfizer, Samsung, Honda, Boeing, Siemens, TSMC, or Huawei?’

“These companies are extremely important to their host nations because they embody within themselves the advanced know-how and R & D capabilities essential for modern life and nationhood. Most critical R& D happens within such companies,” he said in a tweet.

“These companies enjoy a disproportionate share of economic value added as well as profits (compared to their direct effect on employment) and also pay heavy taxes to their host nations both through their well-compensated employees and directly as corporations. That’s the why,” added the 54-year-old.

3/ These companies enjoy a disproportionate share of economic value added as well as profits (compared to their direct effect on employment) and also pay heavy taxes to their host nations both through their well-compensated employees and directly as corporations. That’s the why.

— Sridhar Vembu (@svembu) December 28, 2022

Vembu then shifted to the ‘How’ part.

“For India to build such companies, Indian private sector must invest in R & D heavily. There is no other way. The government should incentivise and persuade companies to invest in R & D. Industrial R & D is not the same as academic research,” tweeted the Zoho CEO, adding that investing in research and development in the private sector brings ‘enormous’ returns, and these show up as high GDP growth and high GDP per capita.

5/ The return on private sector R & D investment is enormous. Those aggregated returns from the private sector are what show up as high GDP growth and high GDP per capita.

If we want a $30 trillion economy, we must invest heavily in private sector R & D. One point program!

— Sridhar Vembu (@svembu) December 28, 2022

On where firms can find skilled people for private sector R & D, he conclused by saying investing by private firms in research and development signals deep commitment, and this in turn attracts talented people.

6/ Where will find the skilled people to staff private sector R & D? “If we build it, they will come” – when the private sector invests in R & D and signals it’s deep commitment, talented people stay home. Companies also find ways to create and nurture talent as Zoho has done.

— Sridhar Vembu (@svembu) December 28, 2022

Research and Development

According to britannica.com, these are two intimately related processes in the industry, through which new products, as well old products but in a new form, are created using technological innovation.

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