Research & Development (R&D) Investments by Global and Indian IT Companies

Abstract

In any sector R&D plays an important role in success of their business. It is essentially an investment in technology and future capabilities which is transformed into products, services etc. R&D is the key component of innovation and in developing competitive advantage. Many companies ignore the importance of R&D. Especially Indian companies R&D spending is increasing year by year. In 2016 it has increased from $66.49bn to $71.48bn and it is expected to reach $77bn by the end of the year 2017. But when we take individual sector growth in R&D there is some lag in it. This paper looks into R&D investments in IT services. The IT sector in India constitute nearly 7.7% of national GDP. In the country, despite of huge talent pool, still the companies are lacking in good quality research output. The present situation, where foreign companies coming to India and setting up their R&D centers and gaining the competitive advantage across the globe. The major development in IT services will be block chain technology, Artificial Intelligence etc. But some companies are going for acquisitions as a developmental strategy instead of spending money in R&D, for example Infosys former CEO mentioned in 2016, why should we spend money in what we now instead we will go for acquisitions of company which are developing. This mind set is also one of the reason for the lack of growth in R&D in IT sector. In this paper we have analyzed about the investment in R&D of various IT companies in India with other foreign companies.

Keywords: R&D Investment, IT Sector