Destination India: People like T.S. Balganesh, head of AstraZeneca's R&D in Bangalore, have made India the world's most happening ideas market

Throwing stones in Bangalore can be an edifying experience: in the 1970s, you would have hit a park; in the 1980s, a pub; in the 1990s, a software services company; and now, in the 2000s, you will probably hit the research facility of a multinational firm. A roll call would probably go somewhat like this:

Intel?
Present
Cisco?
Present
GE?
Present
Motorola?
Present
AstraZeneca?
Present
General Motors?
Present
Google?
Should be here soon.

It isn't just Bangalore, although the city boasts the highest number of research centres of MNCs. There are others scattered across Mumbai, Delhi, Chennai and Hyderabad. And the number is increasing by the hour. For companies with an eye on the main chance-and most MNCs grew to be because their eyes are always on the main chance-India is it. It's been said so often it's become hackneyed even for television channels with their 40-minute cycles, but jet-lagged MNC-execs seem to never tire of it: "The next big breakthrough for our company could well come from India."

Supply is one reason: India produces 350,000 code-jocks and 3,500 Ph.Ds a year. Cost is another: a company wishing to hire a Ph.D in India can avail of one's services for as little as $15,000 (Rs 6.9 lakh) a year. In the US, the cost would be at least $100,000 (Rs 46 lakh). Still, it seems a little facile to believe that cost and supply matter, not in the pursuit of research where talent is all. Then, there's the issue of timing: the world has been aware of the software skills of Indians for over 15 years, and some MNCs set down research facilities in India almost a decade ago, so what explains the sudden rush of MNCs circa 2003?

Companies such as IBM, Microsoft, Sun Microsystems, Intel, Nortel, hp, Adobe, Texas Instruments and Cisco have had research centres in India for some time. Until now, however, not too many people in India and elsewhere knew just what these hothouses of research were up to, nor why these MNCs were, with each passing year, allocating a larger share of their annual R&D budgets to their Indian research centres. Now, it emerges that one of Adobe's most recent products was developed at its facility in Noida, adjoining Delhi, that Intel is moving the R&D of entire product lines to Bangalore, and that i2 Technologies has already done the same. These 'Made in India' stories, apart from providing fodder to publications specialising in coverage of the breathless kind (Nortel To Move Switching R&D To India!; Cisco To Outsource More R&D To India!!; and IBM India Research Labs Working On Demand Computing!!!), encourage other MNCs, ones that don't have an R&D facility in India, to take a serious look at the country.

If Bangalore has emerged India's chip-design hub, blame it on Texas Instruments. In 1985, when TI set up a facility in the city, the world was just waking up to the Indian software story and chip-design was an esoteric concept even in the West. But the company pressed ahead. The chip-design companies that came after TI had it relatively easy. For one, there were trained chip-design engineers they could poach. The network and cluster effects can possibly explain why most MNCs opting to put down a research centre in India head for Bangalore.

At last count, the city had around 50 of the breed. And they explain why it is destination India for any research-minded MNC. After all, globalisation is mostly about setting up operations in countries where there is a great market opportunity, manufacturing wherever in the world it makes economic sense to, and sourcing the best and lowest cost components, again, from all over the world.

If research were all about one big idea and didn't involve a complex supply chain, things would have been very different. Fortunately for India, it isn't. In the IT products space, for instance, research involves product conceptualisation, design, development, and building components and sub-components. There's a similar chain in pharma R&D, from coming up with new molecules to clinical testing and involving biotech research and process research, and everything between. From Wipro to Infosys to a clutch of pharmaceutical start-ups to more-than-a-handful of engineering hotshops, India boasts a thriving ancillary industry. This doesn't just lower the cost of operations for MNC research centres, it reduces cycle time.

Asia and Latin America are the growth markets for most companies. Unfortunately, not all products and services that succeeded in the first world, do so in developing countries. Issues related to economics and culture often make it easier for companies to develop products for these markets out of research centres based in them. Whether it is a global pharma major aiming to discover new chemical entities to treat infectious diseases in the developing world or a telecom behemoth striving to design low-cost communications solutions, India, it emerges, is the place to be. The country's huge population is a bonus, and one that can't easily be ignored by companies in the business of clinical or genetic research.

As more companies start putting down research arms in India, even more will feel the pressure to do so, if only to advertise to their stakeholders that they are present in what is perceived to be the most happening ideas market in the world. Keeping up with the Joneses is as much a corner-room obsession as it is a suburban one.