Global energy firms have outperformed Indian companies in research and development (R&D), according to a report by the Foundation for Advancing Science and Technology (Fast) India in collaboration with IIFL Securities. Coal India has the highest R&D intensity at 3.8 per cent, significantly ahead of other firms according to the State of Industry R&D report by FAST India in collaboration with IIFL Securities.
For inputs, the company studied R&D intensity and PhD employees as a proportion of total employees. R&D intensity helps to identify the proportion of revenue input in R&D activities, while the PhD employee number represents an approximate number of researchers in the firm.
Global firms lead ahead of Indian firms in the percentage of PhD employees. Bharat Petroleum Corporation or BPCL and ONGC have the highest proportion of PhD employees among Indian firms. However, it ranks eighth when compared with global firms. Many firms have negligible to no PhD employees.
The report stated that Coal India maintains its first rank in publications per USD billion revenue by publishing more than 3.4 times the second-ranked firm, Tata Power, indicating a strong focus on research and dissemination. NHPC Limited ranks fourth in this parameter. Indian firms perform well in publications per revenue parameter, competing well with global firms.
BPCL and ONGC have the maximum proportion of PhD employees. RIL has only 0.1 per cent PhD qualified employees and ranks last amongst high-cluster firms for this indicator, despite ranking first in R&D intensity. This could be due to a large workforce employed by RIL.
ONGC ranks first amongst its peers for the parameter, publishing 1.5 times as compared to RIL and ranks second when adjusted for revenue. RIL and IOCL have the maximum absolute number of publications over the study period, at 262 and 218 respectively. HPCL ranks last amongst the high-cluster firms for publications by revenue and also has the least number of publications.
It also added that the Indian energy sector, largely dependent on fossil fuels, is slowly moving towards increasing the use of renewable energy and improving efficiency for the use of non-renewable fuel. A large proportion of high market capitalisation firms in the sector in India are PSEs, which compete well with global peers for R&D intensity.
However, when compared to global counterparts, Indian firms generally have a lower proportion of PhD qualified employees and patents by revenue, highlighting the need for increased focus on innovation and intellectual property. For a detailed analysis and further information, the full brief is available for stakeholders and interested parties.
