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Outsource magazine: thought-leadership and outsourcing strategy | August 28, 2014

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Indian ER&D share grows

Outsource Magazine

India’s share of the $1.1tn global engineering research and development market grew to $8.3bn in 2009 – and is set to shoot up to £45bn by 2020, according to a new study from Booz & Co in collaboration with Indian IT/ITES association NASSCOM. The survey shows that the US still retains the lion’s share – 38% – of worldwide ER&D spending, down from 42% in 1990.

The study also demonstrates that much of the R&D work currently being carried out in India for overseas firms is relatively low-level: “true innovation” represents only around 20% of activity in India, according to Booz’s Vikas Seghal, speaking with Bloomberg Business Week.

“The high-end work will be retained in the US, so don’t expect India to do an iPhone,” Seghal said.

“Due to the growing sophistication of the ER&D services industry, customers have begun to view service providers as strategic partners. India is now an epicenter for global ER&D services with a compelling value proposition based on its growing depth and breadth of services, flexible business models, large engineering base and global footprint with greater proximity to customers. Increasing investment in ER&D has the potential to transform India into an engineering powerhouse over the next decade with the potential to create more than five million jobs,” claimed NASSCOM’s president Som Mittal.



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