A major global engineering company’s establishment of new operations in India involves more than just the ceremonial ribbon-cutting to open a facility. It is an act of faith in the company and its commitment to supporting local people, local supply chains, and future technology. Rolls-Royce announced this week that it will construct its largest Global Capability and Innovation Centre (GCC) in Bengaluru. The facility, with the capacity to accommodate 700 employees, is located within the Manyata Embassy Business Park and will enable Rolls-Royce to enhance its digital, engineering, and defense capabilities by creating stronger connections between these capabilities on a global basis.
This facility provides a comprehensive approach to developing global competitive advantage out of local capabilities. For example, this facility will support employees in all aspects of enterprise digital services, enterprise service delivery, and enterprise engineering who support the civil aerospace, defense, and power systems sectors—all three of which are increasingly dependent upon the ability to leverage data, use software effectively, and produce and distribute products using precision manufacturing practices. The announcement by Rolls-Royce that it plans to double its sourcing from India over the next 5 years not only indicates an increase in the volume of parts purchased in India; it also reflects increased design and systems usage by Rolls-Royce at Indian companies and facilities.
The renewed corporate momentum has received a welcome face from the public. In a recent meeting with the CEO of the corporation, Narendra Modi praised the corporation’s plans for scaling up and stated that this demonstrates that India no longer “chases after corporations,” but that corporations have now come to India to take advantage of the demographic dividend and engineering talent available in India. The meeting and the associated social media postings are an indication of how private investment and industrial diplomacy are being combined as part of the national strategy.
What does this mean outside of the office tour? First, the aerospace and defense supply chain is based on precision, trust, and IP. The creation of a GCC that incorporates both the digital lab and engineering teams will allow Rolls-Royce to prototype, validate, and integrate systems more quickly while also opening up potential pathways to India’s engineers on programs that build aircraft, naval vessels, and industrial turbines to be used all over the world. Second, the jobs that will be generated will require high skill levels, such as systems engineers, data scientists, and specialists in digital twins and additive manufacturing; these roles can create entire local ecosystems of tooling, testing laboratories, and training facilities.
There are also historical resonances between Rolls Royce and India, as Rolls Royce has been linked to India for decades and has been supplying Indian defense and civilian platforms with engines for several years. What is new is that Rolls Royce will scale up the existing supplier relationship to have an organizational structure that includes India’s local component development work done from within a global product and digital development team located in India. This significantly increases the role that India is playing as the locus for developing design and engineering from “manufactured here” to “designed and developed from here” and affects the nature of IP ecosystems, skills development, public-private partnerships, and so on that will be required for offices to transition from merely occupying space to providing a sustained source of R&D capability.
The implications for youth and engineers in India are immediate; they will be able to work on some cutting-edge technologies in areas of propulsion, sustainability, and software from India. Likewise, for other multinationals and Rolls Royce, the incentives for having a location are easy to see—being able to tap into a regional engineering labor force, being located near the digital innovation centers, and being in a supportive regulatory environment make this type of investment worthwhile in the long term.
If the GCC is indeed a new beginning, we will assess its success based on how many Indian concepts, innovations, or sources become internationally successful as a result of lab testing within it. The real test will be whether this will serve as a springboard for (1) startups, (2) creating high-quality jobs, and (3) establishing India’s position in the engineering world of tomorrow.
