Executive Summary: India Innovation Study

A recent study published by the Bertelsmann Stiftung shows that German companies have still not managed to take full advantage of India's significant research and development potential (R&D). While other industrialized Western countries are already relying extensively on India's multifaceted innovation potential, many German firms still see the world's second-largest emerging economy principally as an expanding market for German goods. The study was carried out by the global strategy consulting firm Roland Berger, which interviewed companies and executives in both countries. Their findings show that Germany's economic and political sectors must act fast if they want to avoid being left behind in India and other Asian markets.

India is home to more than 1,000 R&D centers and often forms an essential and integrated part of the global innovation networks of many multinational companies. For the most part, French, British and U.S. firms have already been tapping this potential much longer than have German companies. In fact, the Indian R&D centers operated by French, British and American companies are among the largest outside their respective home countries. Bosch, Siemens and SAP are three of the German corporations undertaking specific R&D operations exclusively in India and profiting from the innovation ecosystem there.

The study also concludes that German-Indian cooperation in the area of R&D lags behind German-Chinese cooperation. In light of decelerating economic growth in China, it would appear all the more urgent that Germany take greater advantage of opportunities to diversify. Other industrialized nations have already started doing precisely that. Last year, for the first time ever, more foreign direct investment flowed into India than into China. Experts are interpreting this as a sign of growing confidence in the Indian economy.

This executive summary highlights India's innovation potential for German businesses.