Need of 'Made' by
India Products and Brands
India has less then 3 percent
share in the world's nominal GDP, based upon exchange rate and mere 2.1% share
in the world manufacturing, inspite of a 17.8 percent share in the world
population. China too had only 2.4%
share in world manufacturing in 1981. But, today it has a 23 percent share in
the world manufacturing and has thereby pushed the US to second position with
17.2% share in world manufacturing.
Moreover, of late, in the post reforms period India has even been
experiencing deindustrialization, on account of liberal imports and growing
foreign direct investments (FDI). Most of the foreign MNCs, which have brought
FDI into India have mostly been bringing their components or completely knocked
down (CKD) kits from outside and are merely assembling their products into the
country. So, the real manufacturing, including manufacturing of the original equipments
has been going down, ever since the onset of the economic reforms in 1990s.
Besides, the Indian brands and indigenously manufactured products are also fast
losing their market share, and many of these are turning to be extinct. They
are being replaced by the Chinese or other foreign brands. More than two-thirds
of the manufacturing in most of the sectors in India has gone under foreign
ownership and control in last 24 years of economic reforms which was largely
under Indian ownership and control, before the reforms. Even, many of the
Indian brands too have Chinese or other imported components or even sometimes
the Indian brands too are assembled outside India, mostly in China, and merely
bear the tags of Indian brands. Besides, on account of dumping of cheap
products by China, Industry and industrial cluster after cluster are turning
sick and facing closures at a large scale. The worse target of cheap dumping
are the tiny and small scale industries, ranging from toys, cycle and cycle
parts glass products, leather products
furniture to electricals and so on. Therefore, there is an urgent need
of pursuing the strategy to our manufacturing technology and promote 'Made by
India' products and brands. In several major sectors of economy. India has only
a miniscule share in manufacturing. For example, in world ship-building, share
of India is just 0.01%. While South Korea, which has 5% of our area and 5%
population has 26% share in world ship-building, inspite of the fact that India
is 4th largest steel producer in the
world with a large pool of skilled manpower. To the contrary, wherever the
industry is provided an enabling environment by the government, it had done
well. For instance, in case of pharma sector, by virtue of an enabling patents
regime provided since 1970 onwards till 2005, the Indian pharmaceuticals sector
has become capable to contribute almost 10% by volume, in the world pharma
manufacturing and now provides affordable medicines world over. Thereby, India
is also called the pharmacy of the world. But, now this sector is also on rapid
decline on account of changes made in the patent laws of India, since 2005 to
comply with the agreement on TRIPS of the World Trade Organization (WTO). So,
today, India can grow only if indigenous industry flourishes. This requires to
promote domestically owned enterprises. For this the domestically owned
enterprises have to enhance their technology, quality and bring economy in
their operations. For launching more aand more by India Product And Brands in
pace of for foreigen companies.
Relevence of Industry Consortia
For this India needs to adopt
consortium approach to move fast on the path to upgrade and develop technologies across the manufacturing value
chains in different sectors, needed to make Indian manufacturing and services
economical and competitive world over and attain an edge over the foreign
products and services. The industry consortiums approach, already having firm
footing in Euro-American and other industrialized countries can only place
Indian manufacturing in the front rank, worldwide by virtue of their time
tested capability to develop affordable technologies at the least cost. The
major industry clusters if transformed into consortiums and consortium
development in stepped up across the country, horizontally as well as
vertically for most of the sectors this can only help the country to overtake
other the industrialized countries including China.
Industrial Research is a high
cost prerogative and most of the industrialized countries have promoted
industry-level pre-competitive cooperative researches by sharing the cost of
developing latest state of the art technologies for a host of industries with
liberal financial support from government via 3 cooperative routes. The 3
common cooperatives routes have been: (i) Initiating formation of industry
specific consortia for technical and market research and liberal state funding
of these consortia. (ii) Facilitating formation of Technology Development
Cooperative Association and state funding of these. (iii) Facilitating,
recognizing and supporting Technology Development Cooperation Agreements among
2 or more companies as well as by industry level agreements. The United States
has enacted the Cooperative Research Act, as early as in 1984 to develop
Industry Consortiums for collective industry level efforts in R&D and
market researches with government support. Even the Airbus corporation was
initially developed as an industry consortium of aerospace component
manufacturers of Europe to launch a high-end civilian aircraft in competition
with the Boeing of the U.S. This Airbus Consortium i.e. “association of
Aerospace component manufacturers” from across the Europe, then developed and launched
high-end civilian aircrafts under the brand of Airbus Industries consortium.
The same Airbus consortium has been converted into Airbus Corporation much
later. All the consortium members, who were aerospace component makers became
shareholder into the corporation made from consortium.
Concept:
A consortium is an association of
two or more individuals,firms companies, associations, universities,
organizations or governments (or any combination of these entities) with the
objective of participating in a common activity or pooling their resources for
achieving a common goal, especially for group of industrial enterprises either
for developing a new technology or
cultivate a market or similar other objective. Generally an industry consortium
engages in pre-competitive research at industry level. But there may be other
types of consortia also. Mostly, in a majority of countries consortium is a
co-operative research effort among business firms, governments and universities
to help the participating companies or firms to attain and maintain leadership
or gain a competitive edge over their international competitors in a particular
industry.
Benefits:
Mostly, the industrialised
countries also emphasize over various advantages of consortia such as
minimizing the cost of developing new technologies by reducing unnecessary
duplication of research efforts, sharing the risks of undertaking R&D,
getting immediate access to new technologies, new markets and cheap production
sources, and making otherwise big and complex research projects possible.
In the United States, technology
consortia, mostly horizontal, have rapidly grown after 1984, when the Congress
implemented the National Cooperative Research Act (NCRA). This law allows
American firms in the same industry to establish consortia that conduct
precompetitive R&D. In the United States, however, the formation of
industry specific R&D consortia was earlier hindered by antitrust laws that
penalized cooperation among competitors until the US Congress passed the
National Cooperative Research Act of 1984 (NCRA). In 1993 the NCRA was amended
to include cooperative production and redesignated the National Cooperative
Research and Production Act of 1993 (NCRPA). These legislative acts reflected a
new technology policy to facilitate cooperative research with sharing costs
aimed at reducing risk for individual companies. Governments often liberally
extend financial grants for the commercialization of new technologies crucial
for any industry to grow and compete globally.
Research and development
consortia in the US are required by the NCRPA to register with the U.S.
Department of Justice, which recorded more than 600 new consortia from 1985 to
1996. While the NCRPA does not provide exemption from antitrust laws, it limits
the damages that may be assessed if an antitrust violation occurs. Where
antitrust laws provide for triple damages to be assessed, the NCRPA limits
liability to single damages. In addition, any alleged antitrust violations
would be judged under a rule of reason standard, rather than assuming they were
illegal per se. In the years since NCRA was passed, no antitrust proceedings
have been brought against registered consortia.
Under the NCRA, firms within an
industry may form consortia to conduct "precompetitive" research.
Precompetitive research is research that is considered generic to the
development of multiple products of basic and primary value to all
participants. By forming R&D consortia, manufacturing firms can avoid
duplicating basic research tasks and share the results more cost effectively.
As a result they are able to compete more effectively in the global
marketplace.
After the implementation of the
NCRA, technology consortia have increased substantially in the United States.
There are now about 350 technology consortia involving about 1500 American and
50 foreign firms. As indicated above, they predominate in high-tech industries.
The Microelectronics and Computer Technology Corporation (MCC), the
Semiconductor Research Corporation (SRC) and the Software Productivity
Consortium (SPC) are examples of co-operative research ventures that involve
companies in similar markets.
• The Primary goal of most consortia
precompetitive research is to conduct on an ongoing basis, and the secondary
goal is product development. The government gives liberal grant to most of the
consortia.
• The funding for technology
development consortia is mostly provided by government-industry shared programs.
Less than 25% consortia are funded solely by the private sector i.e. member
units of the industry.
Technology
Development Cooperative Association - An alternative: Such associations can be created
for a variety of sectors with pre-defined contribution and pattern of sharing
the benefits. Or the benefits of co developed technology can be accessed,
availed and commercially exploited by all equitably.
Cooperative
Research and Development Agreements (CRADAs) - Another Alternative:Such agreements can be worked out
between two or more companies, research laboratories, universities, technology
institutes or any combination of these.A CRADA is an agreement inter se one or
more companies, institutes, laboratories and or any of the one or more parties
under which the can share technocrats, other personnel, services, facilities,
equipment, or other resources toward the conduct of specified research or
development efforts. Such research must be consistent with the mission of the
one or more parties. The CRADA partners contribute any one variable or all of
the above and funding to the project to share the benefits in predefined
ratios.CRADAs involve collaborative research which may result in the sustained
growth and development of inventions. Mostly a CARDA is signed with either a
government or a governmental agency.
Examples
:
Some examples out of several
hundred consortia actively engaged in research in industrialized countries are
being briefly described hereunder:
1 The Airbus example : Airbus Industries was formed in
1970 as a consortium of aerospace component manufacturers to manufacture the
Airbus range of aircraft, with the retention of production and engineering
assets by the partner companies and initially making the Airbus Industries
consortium as a sales and marketing outfit. This arrangement some initial
inefficiencies and inherent conflicts of interest to among the four partner
companies as; they were both shareholders of, and subcontractors to, the
consortium to make aircrafts jointly. The companies collaborated on development
of the Airbus range of aircrafts, but also had intent to guard the financial details of their own
production activities to maximize the transfer prices of their sub-assemblies.
But all these initial problems were overcome with shared vision and ambitions
of participating companies and governments. After successfully running this
consortium, it was consolidated as European Aerospace and Defence Space
company. As consortium the Airbus Industries launched its first 300 seater A300
in 1972. It was converted into a joint stock company in 2001. It has facilities
at 16 places across four countries viz France, Germany, Spain and UK. It now
has 63,000 employees across these 4 countries and a turnover of $ 70 billion (Rs.
5 lac crores).
2. The European Photonics Industry
Consortium (EPIC) :
The EPIC is a good example of not-for-profit association with headquarters in
Paris, France. EPIC serves the photonics industry community through a regular
series of workshops, market studies and partnering. EPIC focuses its actions on
LEDs and OLEDs for lighting, optical fiber telecommunications,laser
manufacturing, sensors, photovoltaics and photonics for life sciences. EPIC
coordinates its activities internationally through its membership in the
International Optoelectronics Association.
EPIC was originally founded in
2003 by five companies: Aixtron, CDT, Osram, Philips, and Sagem. Today, more
than 180 companies, research organizations, universities, and other industry
stakeholders are members of the consortium. The membership works together to
execute the mission by proposing and implementing influential initiatives of
significant impact on the industrial landscape. The strength of EPIC comes from
its capacity to represent the European photonics industry with a clear and
articulate voice. Industry associations such as EPIC have a key role to play in
identifying market opportunities and in helping their members to work together
to capture the opportunity. The European photonics industry is made up of a
broad community of highly innovative small companies. When economic pressures
create turbulent markets and make planning difficult, an association can help
companies to create partnerships and find a better way through the crisis by finding
new revenue streams.
Key initiatives: The EPIC has
following breakthroughs to its credit.
(i) Photonics21 i.e. European technology platform: In 2004 EPIC proposed the
creation of a European Technology Platform in photonics to the European
Commission. EPIC’s members worked in partnership with other European
organizations to develop a vision of photonics as a well defined science
leading to disruptive breakthroughs in telecommunications, life sciences,
manufacturing, lighting and displays, sensors and education. The European
Commission accepted this vision and established the Photonics-21 Platform at
the end of 2005.
(ii) Merging Optics and Nanotechnologies (The MONA Roadmap) : During 2005-2007 EPIC and its
members developed and participated in the MONA project to create a study to
identify synergies between photonics and nanotechnologies, and to identify
opportunities for industry in these areas. The goal of this project is a
roadmap leading from the R&D environment to mastering nano-electronics and
nano-photonics technologies at an industrial scale. This roadmap has been
completed and is available to the public.
(iii) Advanced Components Cooperative for Optoelectronics Research
and Development (ACCORD):
Beginning in 2007, EPIC and its members initiated the ACCORD project which
purchases prototype photonics components and systems from SMEs and awards them
to university R&D groups based on competitive proposals. ACCORD is inspired
by PTAP, (Photonics Technology Access Program), a similar exchange initiative
developed by the OIDA, also a member of the IOA.
(iv) Leadership
in Fiber Laser Technologies (LIFT) :
EPIC organised and led a consortium of 20 companies, SMEs, and research labs in
a proposal to the European Commission for a €17 million project to develop new
technologies for higher brilliance fiber lasers. The project has been accepted
and started in 2009. EPIC also initiated and manages the Linked-In site for
Fiber Lasers.
(v) Workshops on key photonics opportunities : EPIC organises workshops and symposia
on key topics and opportunities identified by its membership. Proceedings and
synthesis of these meetings are available to the public. Some examples are
presented for workshops developed in collaboration with the SPIE.
2.
CAR Industrial Consortium:
The CAR Industrial Consortium has been in operation since 1999, and has since
then succeeded to see the participation
of 25 automotive original equipment manufacturers (OEMs) and suppliers. Over
the years, it has grown with an initial membership of 10-12 companies. The
following members in the CAR Industrial Consortium are global giants from
across the globe. Some of them are"
• Bosch • GM • Renault • Chrysler • Honda • Tenneco • Cummins
• Lubrizol • Transportation Research Center • Ford
Thus, research and development
consortia can provide member companies with many benefits and take the country
to ever newer heights. They are formed to share expenses and resources and to
pool talent and expertise. Consortia that are formed in the United States to compete
globally are eligible for government funding. The most common type of consortia
is horizontal, consisting of competing firms within an industry. Vertical
consortia include firms ranging from materials suppliers to finished product
manufacturers. India can also undertake this initiative in all the sectors.
