We recently attended the launch of Xerox’s Innovation Hub in Chennai (a major South Indian city), their first such venture outside the developed world. The initial mission of the Xerox India Innovation Hub is to develop document management solutions that are relevant to emerging market countries and, at the same time, that help innovate solutions and services delivery worldwide.
India, of course, has been a major destination for R&D among Western firms for some time now. Texas Instruments was leader of the pack, opening their R&D center in Bangalore way back in 1985. More multinationals followed suit in the 1990s. In 2000, GE founded the John F. Welch Technology Center in Bangalore, which is now GE’s largest lab outside the US. And the story is similar for IBM, Microsoft, Cisco, and many others. Our research shows that Fortune 500 companies currently operate 63 “captive” R&D facilities in India (i.e., “captive” in the sense that these MNCs totally own and control all the physical and human resources available in these labs).
So what took Xerox so long? And are they too late coming to the R&D game in emerging markets?
In fact, what appears like imitation on Xerox’s part is really a reframing of innovation in a global context. Indeed, we believe that Xerox is pioneering a whole new way in managing global R&D. Namely: creating lean and nimble innovation hubs in emerging markets which don’t take the traditional “captive” route of owning all resources. Instead, these hubs focus on partnering with local universities and start-ups to get scale and speed in taking cutting-edge ideas to market.