Nasscom on Thursday said that the pressure on time-to-market, shorter product lifecycle and flexibility in expanding the capacity are some of the factors which are expected to push engineering and R&D outsourcing to India.
The industry body that represents the IT and BPO industries in India estimates engineering and R&D services has the potential to create additional jobs of over one million by the year 2020 on the back of the strong growth. According to Nasscom, Indian offshore ER&D market is expected to reach $37-45 billion by 2020.
Incremental growth for the sector will be driven by newer verticals and markets. Nasscom said the future growth of this sector will be driven by verticals such as infrastructure, automotive, aerospace and energy as well as increasing focus on promoting local manufacturing.
“Indian ER&D service has played a pivotal role in accelerating innovation and is establishing India as a design and innovation hub. To further build on this leadership position, the industry needs to pursue continued efforts to build a high-caliber R&D pool by instilling relevant research aptitudes and capabilities,” Nasscom President Som Mittal, said.
According to a recent study by management consulting firm Zinnov, North America and Europe continue to the biggest markets for R&D spend with a share of 35% and 32% respectively. It had also said that the share of emerging geographies to the engineering and R&D outsourcing market is also growing substantially.
Other than engineering services providers and IT services companies who offer R&D services, a large part of the growth of the offshore ER&D market in India is being driven by global companies through their captive arms in India. The number of captive R&D centres in India has gone up to 874 in FY2012 from 836 in FY2011, according to Zinnov.
