The $83-billion (Rs 4.2 lakh-crore) Tata Group is looking to increase its R&D expenditure to introduce more innovative products and services and cut costs within group companies. At present, the group spends close to Rs 12,500 crore on its R&D activities, which account for nearly 3% of the group’s turnover.
“We are focusing on unleashing magic products which will deliver functional and emotional benefits,” said R Gopalakrishnan, director, Tata Sons.The group, he said, was not limiting itself to generating ideas only from within its ranks, having tied-up with companies such as Du Pont, P&G and 3M and institutes such as MIT and Fraunhofer. "At least 43% of ideas for innovation are coming from outside the group and it goes on to show that we are not limiting ourselves to internal vision," said Gopalakrishnan.
However, he refused to put any numbers or estimates on how much will the R&D spends surge in the coming few years. At present 90% of Tata’s core R&D focus is in areas such as steel, automotive and software.
While Nano remains its flag-bearer of innovation, the group’s other innovations are its low cost water purifier Swach as also the concept of offshore software services through TCS. Going forward it may look at entering new areas.
“Within the Tata Group, the ‘innovation’ investment over the last 100 years has been sporadic and it’s only in the last five years that there has been a consistent surge and focus in this area,” said Sunil Sinha, chief, Tata Quality Management Services (TQMS).