H. Narayana Swamy
Partner and Director, CaptiveAide
Believe it or not, technology outsourcing to India began with a captive center back in 1985. When Texas Instruments set up its development center in Bangalore, little did anyone know that it was the first step that would disrupt the way business would be done – forever!
Several countries have followed the model since, and several other models of business have emerged – but Captive centers have remaineda reliable and stable form of outsourcing in India.
In the three decades since TI India’s debut, practically every industry with technology needs has had a brush with India. Some have established a base stronger than others, making it easier for others to follow.
By far the largest number of captives in India belong to the “chip design” or semiconductor industry. The TI captive center was indeed a trail blazer for others to follow. Every major semiconductor company in the world has a presence here and for new companies, that makes life very easy. Talent is easily available, employees have a long history of working with multinational firms; they are used to a certain work ethic, certain rigor of design requirement, and are comfortable in the well-established ecosystem that has sprung up.
Some other sectors in which the captive center culture is well-entrenched are the following:
- Analytics: A large number of mathematics graduates have flocked to the IT industry, making sure that the world’s analytics mysteries are easily solved.
- Biotech: India’s scientific institutions were until recently set up by the government, and they employed huge numbers of talented scientists. Science grads are populating labs by the hundreds, researching and finding biotech solutions in the area of vaccines, clean fuel and anything that can be prefixed with “bio”.
- R&D: India’s pharma sector is strong in churning out generic drugs, but new research in captive centers is playing catch-up, cutting down costs and time to market for new formulations of global pharma companies.
- Retail, finance solutions: These two unlikely candidates for captive centers are actually thriving in India. Large retail chains have saturated the market in developed countries and need to spread themselves in emerging markets. The same story holds true for the banking and finance sector. What better place for a captive than one of the largest emerging markets itself?
India is also suitable for companies doing or seeking animation, textile/jewelry design, automobile engineering/design, specialized electronic designs and many more. Write in if you want to know more!