From India, genius on the cheap
Stream of patent applications flows to U.S. tech companies

By Saritha Rai (NYT)
Monday, December 15, 2003

BANGALORE, India: In clusters of modern low- and high-rise office buildings set amid acres of lush greenery here, thousands of engineers are hard at work, writing software for the latest telephones, designing next-generation microprocessors and developing wireless broadband technology that they hope will transform homes around the world.

The work of these engineers is generating significant amounts of intellectual property for American companies like Cisco Systems, General Electric, International Business Machines, Intel, Motorola and Texas Instruments, whose various Indian units have filed more than 1,000 patent applications with the U.S. Patent and Trademark Office.

A few applications, with patents already granted, date to the early 1990's. But most of the applications from India have been filed in the last two years and still await decisions by the patent examiners just outside Washington.

For U.S. technology companies, under pressure to generate quick breakthroughs and develop products while curbing costs, India's big draw is its deep pool of well-educated but low-cost talent. The Indian research centers of Cisco and Motorola, for example, are now those companies' largest outside the United States.

While outsourcing lower-level technical tasks to India has been a practice of American industry for years, the U.S. technology titans' increasing reliance on Indian research-and-development operations is a relatively new and growing trend.

"In the process of getting low-end work done in India," said Chandra Srinivasan, chairman of the Indian unit of the consulting firm A.T. Kearney, "multinationals discovered that there are not too many locations where they can find this abundance of superior talent at these kinds of costs."

Nearly two decades ago, Texas Instruments became the first global technology company to set up a development operation in India, and the company has reaped the benefits in the form of 225 U.S. patents awarded to its Indian operation, most of them in the last few years.

It was the company's Indian design center that made a central contribution to a chip Texas Instruments announced this month. That chip is one of the world's fastest for converting analog signals, like the human voice, into digital signals that can be transmitted across computer networks.

Sammy Sana, managing director of Motorola India Electronics, said, "Thirty percent of all software for Motorola's latest phones is written in India."

In a Bangalore plant for Intel, the world's largest chipmaker, Ajith Prasad and 20 other engineers are designing and developing a set of chips that they hope will, within a few years, power new types of high-speed broadband wireless technology within the confines of a home or an office.

"This is technology of the future," Prasad said. "Even the standards are still being written." Prasad's team has filed six of the 60 U.S. patent applications from Intel's India unit in the last 22 months. (Because patents can often take four or more years between filing and granting, no Intel India patents have yet been awarded.)

The Bangalore center's rate of innovation compares favorably with that of Intel's mature development centers in the United States, said Ketan Sampat, president of Intel Technology India, who holds six patents for his work in the United States.

"I'm doing exactly what I might have been doing if I worked for Intel in Santa Clara," Prasad said, referring to the company's California headquarters. In the lobby of the high-rise building that houses hundreds of Intel engineers, Prasad's photograph hangs on the "Wall of Fame" with pictures of a dozen other company engineers who have filed for patents from India.

Elsewhere in the building, one floor is out of bounds to other employees as a group of engineers works on a microprocessor chip scheduled for introduction in 2006. The 32-bit processor, designed entirely in Bangalore, is to have one billion transistors. (Intel's Pentium 4, its most advanced 32-bit chip for desktop computers, has 55 million transistors).

India's technology talent pool extends beyond software and chip development. In General Electric's John F. Welch Technology Center, in a Bangalore suburb, 1,800 engineers with backgrounds in fields such as mechanical engineering and polymer science are at work on products as diverse as aircraft engines, power and transport systems, and plastics. They are part of a global GE research team that also has centers in Munich, Shanghai, and Schenectady, New York - all of which are able to collaborate via computer networks.

The growth of research-and-development opportunities for Indian engineers is helping to propel a repatriation wave of Indians who have been working in Silicon Valley and elsewhere.

"First-rate talent is moving back and helping bridge cultures, bootstrap new work and build skill sets in organizations," said Vijay Anand, managing director of Sun Microsystems's India Engineering Center in Bangalore.

According to India's software trade body, the National Association of Software and Services Companies, about 5,000 technology professionals of Indian origin with more than five years of work experience have moved back to India from the United States in the last two years. These include professionals holding U.S. work visas and green cards, and even U.S. citizens.

Despite the spurt in research in India, some skeptics say the country is nowhere close to being a global electronic development hub in the way Taiwan is now a manufacturing center.

Sampat acknowledged, "The ecosystem of design tools, silicon design, systems design, is not completely formed yet."

For Anand of Sun Microsystems, it is mainly a perceptual issue.

"India has the talent and the infrastructure, but it has a branding problem," Anand said. "It's a matter of convincing the rest of the world to see India as large-scale and high-end."