TMT
By 27 July, 2009

Billionaire Bill Gates on Friday urged India to move away from low-cost labour toward high-end research and development to keep its giant IT sector competitive.

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On a visit to New Delhi, the co-founder of Microsoft Corp called on the Indian government to speed up its commitment to R&D and to boost low number of home-grown PhD students.

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Gates told a panel discussion that India's "IT success story" should strive to add value and move away from low-cost labour as other developing countries play catch-up.

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"At first some of that (IT boom) was built on low-cost labour. And, of course, as time goes on, you don't want to have that as the only differentiator and it's not a sustainable thing, because others can come along with that as well," Gates said.

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India's R&D sector has made strides in recent years and attracted some big foreign hitters, including Microsoft, in keeping with its IT- and service-driven economic boom.

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But hampered by structural problems and a lack of government commitment, India's R&D still lags behind the United States and Asian rival China. China has more than 1,100 R&D centres compared to less than 800 in India.

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"Leading companies here are contributing a lot of ideas and techniques. Even more of that has to happen and bring it to its full potential," Gates said.

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"You've got to get the government, universities ... and companies like Microsoft to deepen their commitment to R&D."

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India produces 100 computer science PhDs a year -- a fraction of China or the U.S -- even as it exports a large number of students abroad. While English-speaking India is cheaper than China for R&D, New Delhi gives few incentives to researchers.

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Beijing offers incentives like tax breaks for R&D centres, and special economic zones provide infrastructure for hi-tech and R&D industries.

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