India Inc has not seen the need for R&D, says R Gopalakrishnan

India Inc. has not seen the need for R&D, rues renowned management expert, Ramabadran Gopalakrishnan, Executive Director of Tata Sons and former Vice Chairman of Tata Sons.

Answering a question in a webinar on ‘Wisdom for Business Leaders’ organized by Business Clinique, a Chennai-based mentoring services provider, Gopal (as he is popularly known) observed ruefully that corporate India historically did not look at expenditure on R&D and branding and advertising as ‘investments’. The word ‘investment’ was reserved only for capital expenditure.

“We have been raised on that diet,” he said.

Often R&D was looked at as a tax-saving measure (when tax sops were given for R&D expenditure). But there were also other tax incentives, such as ‘accelerated depreciation’, so R&D spends were weighed against the alternatives.

However, today the world has changed now, he said. Branding has become important, he said, observing that the Tata brand at $20 billion. “It is valued so high it could become a bone of contention between Ratan Tata and (Cyrus) Mistry,” he said.

Importance of R&D

Stressing the importance of R&D, Gopal said that even seemingly simple products had a lot of R&D. For example, the ball pen was commercialized in 1938, fifty years after it was invented. (The ballpoint pen was created in 1888 by an American tanner, John J Loud, but it was then not commercially viable, and the patent lapsed. In the 1930s, the Biro brothers of Hungary improved upon the ink, made it viable and got a patent in 1938.) While it may look simple, the R&D involved in it was huge—a perfectly spherical ball has to revolve in its socket, it must pick up ink the moment it touches it, and the ink should dry the moment it touches the surface of the paper, and it should not leak. There are at least 12 patents related to the ball pen, Gopal said. Similarly, the first patent for a roller suitcase (wheeled suitcase) was given in 1890, but it was commercialized only in 1985, he said, stressing that it took that much of R&D time for the product to mature.

Likewise, the face lightening cream, ‘Fair & Lovely’ is a simple product if you looked at it in one way. All it contains is “a bunch of vitamins” that prevent the formation of melanin—a pigment that gives colour to the skin—from forming. But beneath that, there is a lot of R&D, as the product involves biology, toxicology, dermatology. There are so many stories protecting it, Gopal said.

“The simple soap has saved more lives (from viruses) than the entire pharmaceutical industry has,” he said, noting that the human palm is like “mountains and ridges” from a virus’ point of view. Viruses can hide easily. The soap works like a Roman gladiator; it beats the hell out of the viruses.

Earlier, in his speech, Gopal spoke about the importance of respecting employees and engaging with them.

Business Clinique, which organized the webinar, is a consultancy formed by a group of ex-corporate honchos. It provides hand-holding services to start-ups and MSMEs by assigning them a mentor to address specific problems.

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