Global R&D Model Of Microsof

Many global research firms have large R&D laboratories in India, covering areas such as information technology, energy, life sciences, and agriculture. In a way, India provides a place to experiment and then export the results to other countries, both developing and developed. Here are some interesting points about Microsoft Research India, posted at the Harvard Business Review blog.

It is interesting to see that Microsoft has adapted to the emerging market culture and is working hard to bring in a diverse group of scholars and researchers. Looking at the research and achievements of companies like Nokia, Apple, Samsung and HP, Microsoft has a long way to prove their strength in original research. The approach is include social scientists and economists in your teams as well. This is a worthwhile approach and we need to adopt this broad thinking within our research initiatives in Pakistan as well.

We were expecting this lab to look like other multinationals’ Indian R&D outfits, i.e., staffed with hundreds of engineers and scientists. But we were in for a big surprise.

The surprise began when we were greeted by a kurta-clad Dr Kentaro Toyama, assistant managing director of MSR India. A Japanese-born American educated at Harvard and Yale, Kentaro left his cushy researcher position at Microsoft’s Redmond headquarters to come to Bangalore in 2005 to start the Technology for Emerging Markets (TEM) unit, which he now leads.

TEM seeks to address the socio-economic needs and aspirations of people in emerging-market countries like India, where the majority of the population still lacks affordable access to computing technologies. TEM’s work is closely aligned with Microsoft’s Unlimited Potential Group, which I have written about in the past.

What impressed me most about TEM is its staff members’ multidisciplinary backgrounds. In addition to computer scientists and engineers, TEM also includes experts in the areas of ethnography, sociology, political science, and development economics, all of which help Microsoft understand the social context of technology in emerging markets like India. For instance, we met with Aishwarya Ratan, an associate researcher trained as a development economist, who is exploring the delivery of financial services to poor and low-literate clients using mobile technologies. Another researcher, Nimmi Rangaswamy, who has a background in social anthropology, is conducting ethnographic research in urban slums to identify the socio-economic needs of micro-entrepreneurs there — many of which can be addressed with technology.

By leveraging its multidisciplinary talent, TEM has developed some amazing solutions designed for emerging and underserved markets, both in rural and urban environments. For example, it has developed the MultiPoint mouse, which allows a single computer to be shared by multiple children in developing nations. My personal favourite is Digital Green (which I nicknamed “American Idol for Farmers”), a Web 2.0 initiative which tapes progressive farmers to disseminate their best practices across agricultural communities. Digital Green just won the 2008 Stockholm Challenge Award in the Culture category.

Undoubtedly Microsoft is pioneering the R&D 2.0 model that I discussed in my last post — an organizational model that relies on anthropologists and development economists to first decipher the socio-cultural needs of users in emerging markets like India and then use these deep insights to develop appropriate technology solutions. And it’s telling that Microsoft picked India as the epicentre of its global R&D transformation.

Indeed, the diversity of the complex Indian society and the scarcity of its multifaceted economy make India an ideal playground for piloting the R&D 2.0 model, a model that can help multinationals effectively serve emerging markets which are poised to power their future growth in decades to come.

Among tech multinationals, Microsoft clearly stands out with its multidisciplinary R&D approach that aims to tackle big societal challenges. Based on my interactions with Microsoft’s top execs, here are some operating principles that I can offer to senior managers in other multinationals who wish to deploy the R&D 2.0 model in their own emerging market units like India:

1. Address societal needs, not narrow B2B or B2C needs. Like Microsoft, try to tackle big societal issues like illiteracy and deficient healthcare that afflict the masses in emerging markets like India, Brazil, and South Africa. Have development economists in your R&D team collaborate with engineers to devise cost-effective solutions for resolving these critical societal problems.

2. Leverage NGOs and grassroots entrepreneurs to scale up solutions. Once your multidisciplinary R&D team has invented a solution for a social problem (like lack of access to financial services), collaborate closely with local NGOs and micro-entrepreneurs to scale up that solution for the masses. Otherwise, the social impact of your invention will be limited.

3. Use anthropologists to link your formal business with the informal sector. The informal sector dominates emerging markets like Brazil and India (where it accounts for 90% of its total workforce). Yet this informal sector represents a huge potential market. To effectively penetrate this market, use social anthropologists who, as trusted brokers, can facilitate connections and interactions with prospective users in the informal sector.

4. Broker best practices across emerging markets and even developed nations. As Microsoft is doing, take best practices and solutions developed in India and replicate them across other emerging and even developed markets. For instance, California (which is slashing its education budget) can surely benefit from low-cost online literacy programs invented in India. And the Obama Administration could rein in skyrocketing US healthcare costs through the large-scale deployment of proven Indian solutions, like telemedicine, across America.