The National Association of Software and Service Companies (Nasscom) in association with management consultancy Booz & Company, released on Thursday the findings of the study “Global engineering research & development: accelerating innovation with Indian engineering” at the Nasscom engineering services conclave in Bangalore.
Nasscom forecasts that global engineering research & development (ER&D) spending to total $1.4 trillion in 2020, from $1 trillion in 2009. The study noted that the Indian ER&D market had grown at a compounded rate of 40 per cent between 2004 and 2009 – from $1.2 billion to $8.3 billion. It forecast that the Indian ER&D services market would be about $40-45 billion by 2020, of which $4-6 billion would be in the domestic market. The study predicted that infrastructure, aerospace and energy segments would account for about 80 per cent of the domestic market.
Som Mittal, President, Nasscom, said India was at “the epicentre of the global ER&D market,” because India offered a “compelling value proposition” that was based on a large and diverse engineering base and flexible business models.
Vikas Sehgal, Partner, Booz & Company, said the industry could potentially employ more than five million persons when revenues reached $45 billion in 2020.
Speaking to The Hindu, S. Valmeeka Nathan, Vice-President and Global Head, product Life Cycle and Engineering Solutions, Infosys Technologies, said companies were now more inclined to “re-examine core technologies.” “They used to consider these as holy cows in the past, but they are now under greater pressure to reconsider their engineering processes,” he said. Engineering services contribute about nine per cent of Infosys' revenues.
He said the “challenging” economic environment provided opportunities for companies such as his to “impact the core business of customers by enhancing business value.” Traditionally, companies tended to treat engineering as their “core” business and were reluctant to let them out.
“They now realise that external talent, competence and partnerships can be leveraged to enhance their own business value,” Mr. Nathan said.