Mukund Rajan (left) and Sunil Sinha in Calcutta on Tuesday. A Telegraph picture
Calcutta, April 29: The Tata group is assessing its innovation strategy and has for the first time quantified the economic benefits of such activities.
Mukund Govind Rajan, member of the group executive council, said the Tatas would focus more on innovation going in the future and the spend on research and development would certainly go up.
“Group chairman Cyrus Mistry has pointed out that in an increasingly competitive environment, we must differentiate ourselves through a culture built around customer centricity and innovation,” Rajan said at Tata Innovista 2014, a meet on innovations.
Expenditure on R&D as a percentage of turnover for the Tata group as a whole has increased from 2.3 per cent in 2011-12 to 2.5 per cent in 2012-13.
“As a group, in 2012-13, we spent Rs 13,223 crore, or $2.43 billion, on R&D. This was a growth of 23.8 per cent in rupee terms and 8 per cent in dollar terms over 2011-12. As against India’s R&D-GDP ratio of 0.76 per cent, the Tata group’s R&D-turnover ratio is substantially high. We would like to see these ratios increase, both for the country and our group.”
Sunil Sinha, chief of group quality management services, said the innovation culture was at an inflexion point. “We are looking back at what we have achieved so far and how to take it to the next stage,” he said.
For instance, there is more focus on intellectual property rights. “When somebody comes to us with innovation, we ask if this can be patented,” he said.
The group expects the combined economic value of its innovations to cross $1 billion in the current financial year.
“This is the first year we tried to measure the economic benefit of the innovations and for the full year of 2014-15 it is estimated to be $1 billion for 43 innovations that reached the final round of Tata Innovista 2014,” Rajan said.
Tata Innovista is an annual event that has been held since 2006 by which the group began capturing and promoting innovations of its companies.
The group, however, measured the economic value of just 43 creative ideas out of 1,700 innovations that took place last year. Since 2006, 7,000 innovations have been implemented within the group.