Entrepreneurs Need To Target R&D Of A Million Engineers In India: Ather CEO Indian companies are often quite happy seeing a 3-4 per cent R&D spend but we need to focus a lot on the numbers otherwise no one can beat a 10-100X numbers advantage.
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Ather Energy founder and CEO Tarun Mehta has emphasised on the increased spending on research and development (R&D) in the auto industry saying Given the demographic advantage we are sitting on, our policy focus on RnD needs to go up in an immense way.
He said that entrepreneurs need to target an R&D of a million engineers in India.
"Given the demographic advantage we are sitting on, our policy focus on R&D needs to go up in an immense way. Remember, suppliers come and setup capacities where OEMs produce. OEMs produce where their new product development (NPD) happens. And NPD happens where there are engineers. That's why China today wins the NPD game so that it can continue to maintain its eventual manufacturing advantage," he wrote on X.
The post was in context with Chinese carmaker BYD's R&D strategy where is has claimed that the company has been expanding its R&D team for several years with the number of engineers hired by the company growing 31.5 per cent year-on-year to around 40,400 in 2021. That number increased 72.6 per cent year-on-year to nearly 70,000 as of last year.
"Apparently BYD now has more people in R&D than the rest of the auto industry outside of China, COMBINED," he added.
He said that the most important progress is technological progress and China, for all its faults, is doing good job on this.
"An R&D team size approaching one lakh people with some 20-30K engineers hired last year alone! Almost 10 per cent of their revenue is spent on R&D, even at the scale of USD 40-50 billion in annual revenues," he added.
He said that Indian companies are often quite happy seeing a 3-4 per cent R&D spend but we need to focus a lot on the numbers otherwise no one can beat a 10-100X numbers advantage.
"If we have a 10-20X growth ahead of us for the next few decades then we need to target big numbers everywhere. 10-15 per cent R&D spend in all critical sectors. A million engineers in all critical sectors," he said.
Replying to a comment on the micro-blogging platform, he said that key concern is a fear of investing in R&D. Too many promoters, and even professional CEOs weren't engineers in the past. And very few have seen value creation happen by 'building'. Too many CEOs rewarded for successful 'joint ventures' rather than for being kick ass builders.
