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Dutch sat nav maker TomTom has opened a global innovation hub in India that will be accessible to all India-based staff by the end of 2016.
The hub in Pune, India will be available to all of TomTom’s Indian workforce, which is currently around 800, but is expected to rise to 1,000.
The company hopes to stimulate innovation through information sharing and support to help staff turn ideas into real products and services.
Barbara Belpaire, general manager India at TomTom and head of the Innovation Hub, said: “This will give employees a platform to develop software, technology, applications, services and futuristic consumer products in the wearables, mapmaking and data services space.”
The facility has three sections with a demonstration and experimentation area that will house TomTom and other technology products for reverse engineering, as well as a break-out section to cultivate ideas.
Earlier in August 2016, German car parts maker ZF Group opened a technology centre in Hyderabad, India, which will focus on software and mechanical engineering. It will be fully operational by January 2017 and is expected to have a work force of 2,500 engineers by 2020.
Stefan Sommer, CEO of ZF Friedrichshafen, said: “As demand for software engineering grows, we will exponentially increase our capacity to help meet our customers’ growth aspirations.
“With this technology centre, we are reinforcing our global research and development footprint, as well as our commitment and investment in the rapidly emerging Indian market.”
These developments are further evidence that offshore hubs are more about strategic business development than cutting costs.
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The two deals are further evidence of the trend for multinationals to set up delivery hubs in close proximity to companies in similar sectors. This helps them access skills and expertise and contributes to the sharing of knowledge.
Peter Schumacher, CEO at management consultancy The Value Leadership Group, said the establishment of captive centers in India reflects the strategic view of the opportunities India offers.
“For example, over the past decade Bangalore and Pune have seen an enormous inflow in captive centers for research and development and corporate services from across sectors,” he said.
“Now venture capital investment in startups is creating a multiplier effect and a dynamic and innovative business environment is rapidly emerging.”
Schumacher said in these cities there is a diverse talent pool with constant interaction. “This is facilitating new relationships, making collaboration easy and enabling the efficient exchange of ideas – all of which are key drivers of innovation.”
“The smartest companies are leveraging the ecosystems to do things they would not be able to do otherwise.”
The rising number of locations that offer their own particular advantages as well as maturing technology makes the offshoring choice increasingly difficult for today’s business leaders.
However, the latest Global Service Location Index from management consultancy AT Kearney puts India top of the pile with a good balance of cost, skills and business environment.