External challenges: Indian companies find their ability to introduce new products constrained by the inability of their vendors to supply the requisite input due to lack of knowhow, product gaps or even financial constraints. Indian companies are wary of developing new products due to certain long held practices of the end users like - end users are hesitant to try new products of Indian companies unless supported with a proven track record. Further, process plant projects continue to be awarded with a focus on minimising capital expense rather than minimising the Total Cost of Ownership. Consequently, companies are constrained to produce products that meet the minimum technical requirements at the lowest possible cost.

Imperatives to develop an ecosystem for innovation
A collaborative approach is needed by the PVPE Industry - companies, industry bodies and central and state governments to develop an ecosystem for innovation and NPD in India.

Companies: Inward focus: Companies need to foster a mind-set for idea generation and innovation within the company by aligning their company vision and mission to being focussed on technology. They need to establish processes for innovation and NPD and benchmark global companies on the processes adopted for innovation and NPD.

Outward focus: Companies need to work jointly with end users, suppliers and academic institutions to carry out joint product development projects.

Industry bodies: Industry bodies need to work towards increasing industry-academia collaboration by establishing agencies like Fraunhofer Society in Germany to channelise the knowledge from academia to applied research with practical industrial value. They need to work with the state and central governments to improve access to R&D funds and infrastructure by setting up sector specific research funds and facilities.

Government: Government initiatives like ‘Make in India' need to be more specificity in their goals. E.g. cap on the maximum import content in new projects. Many industry stalwarts have highlighted the need for the government to provide such end user mandates and incentives. Government needs to provide more fiscal incentives to promote R&D.

Conclusion
Innovation and NPD will be the key for Indian PVPE companies to break free from the image of being low cost manufacturers. Only then will they have the ability to become preferred suppliers for the global markets. The central government has via the National Capital Goods Policy 2016 and other policy decisions already set the ball rolling for large number actions. Now, it is up to PVPE companies to step up their efforts towards innovation and NPD. The companies need to continuously assess their current innovation and NPD processes against successful global companies and institute an improvement program in line with their strategic goals. It is an imperative for Indian PVPE companies and industry bodies to team up with the government on this front to yield the targeted results.

About the authors: Shripad Ranade is Practice Head, Abhishek Bagwe is Engagement Manager & Donnel Peter is Associate Consultant with Tata Strategic Management Group.

Sources:
TSMG - FICCI Advanced Manufacturing Survey 2016; ‘Strategic Report
on Pumps, Valves & Process Equipment' - A Tata Strategic Report
for the FICCI PVPE Expo 2016; ‘National Capital Goods Policy 2016
- Building India of Tomorrow' - Ministry of Heavy Industries & Public
Enterprises Department of Heavy Industry; ‘2016 Global R&D Funding
Forecast - A supplement to R&D magazine', Winter 2016 by the Industrial
Research Institute; The Global Innovation Index 2016 - Winning
with Global Innovation; and data.worldbank.org/indicator