Contract Research is the next big wave.
And India can prepare for the boom.
With a potential to dominate it.
The issue is not whether we are the best in the world or not. But who is the best among those willing. The same way, it is not relevant as to who is the best person for the job. It is about who is the best among those who are interested in taking the job. There is no ideal person or ideal solution.
Ai is going to lead to an explosion in the market for speed research. For over twenty years companies like HCL have invested in what was then called “engineering research and services” or ERS. It is now a USD 2 billion industry.
IT services on the other hand is a USD 200 billion industry. This is set to change.
IT services will reduce at 5-8% pa and Contract Research will grow at 20-25% pa. Do the regression and you can see it won’t be long before contract research will be larger than IT services.
Who are the players in this market ? Who are the potential leaders ? What is the competition. The answer to all three is “none or don’t know”. I had erroneously thought that the IT majors would lead. But my interactions with the leadership in all the IT majors seems to reinforce my hunch – they don’t have what it takes to succeed. Niether the dna nor the competency matrix. The Indian IT industry is by and large technology free. It is a labour supply business. The traffic was outward bound. They had the generals. We supplied the soldiers. Soldiers are large numbers.
But now it is different. We have the numbers and the ecosystem. The research work can be done anywhere. Training ai in medicine alone is a usd 100 billion opportunity. I expect 100k westerners to want to live in India just for training medical ai.
Contract research is a high value business. We are looking at USD 200k pa per researcher. Not because that is fair wage in India but because there is no competition. Monopoly prices are never fair. The good news is we don’t have sight of future competition either.
Way back in 1988, Prof Nag had predicted that in fifty years, contract R&D would be the largest export opportunity for India. IIT Bombay was fourth among five IITs. We produced 325 BTechs, 100 MTechs and under 50 Phds a year. Now we produce 600 Phds a year from IIT Bombay. More than any other college in India. We need to grow this to 5000.
To produce 5000 PhDs a year, we have to onboard 20,000 PhD students assuming four years for a PhD. We also need 3,000 PhD guides in IIT Bombay alone. We have less than 300. So we have to import PhD guides.
Deeptech startups will hire fresh BTechs at typically Rs 1.5 lacs pm salary. They will all enrol for a PhD. For 20,000 phds in IItB, we need 4000 startups. Not an issue.
But we don’t have enough senior people. This is going to unleash the largest inflow of senior talent into India. In the next five years, over 100,000 foreigners will need the equivalent of a H1B visa.
What should India set the fees at ?
