Co-creation and capability building for India

Rolls-Royce's Global Government Relations Director elaborates on how partnerships and co-creation offer India an accelerated path for capability development, especially in the security and defence sector.

Highlights:

• A sustained focus on reforms, manufacturing, and indigenous capability-building has helped India's jump in the World Bank's Ease of Doing Business report.

• India's search to build an indigenous defence industry offers an opportunity for global players to work with Indian counterparts in a closer partnership.

• Industry 4.0 is a very important area of opportunity where India could benefit through partnerships with established global technology suppliers.

• Partnerships with global players, with the goal of co-developing relevant technologies and IP in critical areas, will help realise India's potential.

The international business community has long been aware of India's market potential and has been keenly watching the country's progress as an attractive investment destination. A sustained focus on reforms, manufacturing, and indigenous capability-building has surely had an impact, and this is reflected in the latest edition of the World Bank's Ease of Doing Business rankings; India jumped 14 places since last year and also earned a place among the world's top ten improvers for the third consecutive year. However, even with this marked improvement in recent years, India is still only placed 63^rd in these rankings and has ample scope to make further gains.

How best to pursue the next phase of growth and development?

As the country moves towards its “$5 trillion by 2025” goal, India must sustain reforms and revitalise it's manufacturing sector. India has many unique characteristics and hence needs its own unique strategy which leverages its core, inherent strengths, while tapping into the vast partnership opportunities available from across the world. There are countries which have capabilities but may lack capacity and scale. India can offer both scale and large resource capacity, but still lacks the right capabilities in some areas. The answer lies perhaps in bringing the two together by pursuing opportunities in partnership, co-creation and co-production.

Technology has changed the way that businesses behave today. As India progresses towards a developed economy, it is embracing technology at an increasing pace across all spheres of industry and society. Specifically, in the defence sector, the country's aspiration to evolve from a regional power to a global power has led to the creation of well-defined initiatives focused on indigenisation and self-reliance. Currently, the country is at the right juncture to build a vibrant local defence industry ecosystem that could support both domestic and export demand. These development dynamics should be the catalyst for global players to work with Indian counterparts in closer partnership.

Template for the future

Rolls-Royce's presence in India is already an example of a successful partnership. Rolls-Royce started its journey in India over 85 years ago with the powering of the first commercial aircraft as well as the first Indian military aircraft. Today, over 750 Rolls-Royce engines across 10 engine types power Indian Military aircrafts. 50 per cent of Indian wide-body international routes are powered by Rolls-Royce engines. Our marine equipment powers over 270 vessels in India; 98 vessels of Indian Navy and Indian Coastguard operate with our equipment.

The vision for the future is to evolve beyond the traditional technology transfer and manufacturing model and to create a broader ecosystem that includes co-design, co-development, co-manufacturing, supply chain and support. This entails capability creation and skilling rather than just technology transfer and it is something that we consider a core strength. With a growing engineering footprint in India, we are establishing a robust ecosystem that can engage in co-creation across the entire value-chain - from research, design and development to manufacturing, integration, maintenance and repair.

In areas of strategic importance, like security, partnership and co-creation can be of even greater relevance. It involves joint investment in resources and skills among the partners, where the partners may also jointly own the IP developed for solutions. This could be of great significance, given India's status as one of the largest importers of defence equipment in the world, and with its plans to spend $130 billion by 2025. The country also has ambitions to achieve large-scale indigenisation in this area. By entering into strategic partnerships to co-create and co-produce, India could meet these goals faster while upgrading and reinforcing the core capabilities for sustained development of the sector.

Co-creation and Collaboration

Industry 4.0 is another very important area of opportunity where India could benefit through partnerships with established global technology suppliers. Through this, India can leapfrog to high-end manufacturing, skipping the cycle of low-cost manufacturing. Deploying complementary technology strengths can lead to the creation of high-value jobs in emerging innovation clusters in India, creating opportunities for India's increasingly skilled and ambitious workforce. Of strategic importance could be technological collaboration in 'Sunrise' Future Tech sectors such as AI, health technologies, clean technologies, smart urbanisation and future mobility.

These strategic sectors and technologies are being developed and actively pursued in all major countries and trading blocs. India, by virtue of the scale of its domestic market and its unique resources, has the potential to be a global player and competitor in these emerging technologies. Partnerships with global players, with the goal of co-developing relevant technologies and IP in critical areas, will be a key enabler to help realise India's potential in these areas. But this requires long-term commitment and stability in the policy framework will be crucial.

India has the ingenuity and the ecosystem to enable its vision and to take its place as one of the world's most attractive investment destinations. If managed efficiently and equitably, this will be a great development story for the global economy, a great outcome for India and her people and a great source of opportunity for India's partners and friends in the international business community.

Patrick Horgan is Director of Global Government Relations for Rolls-Royce.