New Delhi, July 18 (IANS) Indian companies have been averse to risk and innovation, things which we need to have to make our space in the world market, Vice President M. Hamid Ansari said here on Tuesday.
“Indian businesses have traditionally been risk averse. Most Indian firms, barring a few notable examples, lack sufficient grounding and experience in global competition because of the absence of intense inter-firm rivalry in the domestic business environment,” Ansari said while conferring the AIMA-JRD Tata Corporate Leadership Award on N. Chandrasekaran, Chairman of Tata Sons Ltd.
He said that “prolonged government protection” has left the Indian companies too “complacent” to wage battles with global firms.
The Vice President remarked on the lack of investment coming from the native industrial players in comparison with their international counterparts, as being a factor in the absence of innovation.
“According to the World Bank, in 2014, India’s gross spending on Research & Development (R&D) was about 0.63 per cent of its Gross Domestic Product, against 1.5 per cent by China and 1.1 per cent by Brazil. Many developed countries, on the other hand, spend upwards of 4 per cent on their R&D,” he said.
He also cited the research-investment done by such private players as Reliance Industries and Larsen and Toubro (L&T), which was a mere one-third of their counterparts Petrobras and PetroChina from the emerging markets.
Ansari called for a “genuine need for change in the internal environment of Indian firms” and acknowledged the challenge Indian companies face in the “times of recession that engender protectionist regimes while competing in a fast evolving technological landscape”.
He added that merely offering incentives to industries will not help and striving towards a change in ‘culture and attitudes’ is needed to foster innovation and entrepreneurship.