How Engineering R&D Playing a Crucial Role in Indian Ecosystem

The Indian ER&D services sector is expected to reach $63 billion by 2025, up from $31 billion in 2019, according to Nasscom’s report
  • BY Jaspreet Kaur

    Feature Writer, BusinessEx

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  • Nov 12,2021
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  • 11 Mins Read

Engineering research and development (R&D) has become a vital area. According to Nasscom’s report, in 2020, the global Engineering R&D spending was $1.2 trillion, with corporate engineering R&D (ER&D) spending being $772 billion. 

The Indian ER&D services sector is expected to reach $63 billion by 2025, up from $31 billion in 2019. The country’s current share of the global ER&D outsourcing market is 30 percent and is expected to reach 50 percent within a decade. At present, the nation is turning into a hub for global ER&D enterprises. 

According to Nasscom's report, the key pillars and value propositions that fuel India’s attractiveness as the destination of choice include the ability to drive strategic business impact, a strong focus on innovation, a large and diverse talent pool, and a focus on differentiated service delivery. The country has evolved from providing engineering support to end ownership of engineering and product development initiatives

Homegrown ER&D players also play a crucial role in creating strategic business impact. These players have a crucial role in helping global enterprises create competitive advantage, move to a digital-first paradigm, and create tangible business value. In addition, they aid customized localization in unlocking new market segments for global enterprises and build products that are ‘Made for India’ and ‘Made for the World’.

Infusing in ER&D Sector 

Besides turning into a vast ER&D hub, India is also turning into an attractive investment destination. The report unveiled during 2014-19, the country jumped 79 spots in the “Ease of Doing Business” rankings and moved 33 positions in the “Global Innovation Index.”

 

The nation is undergoing a digital revolution and is poised to become a digital economy worth over $1 trillion by 2025, up from $200 billion in 2018. The Indian government has rolled out

various national-level missions and initiatives to foster digital proliferation. 

Significance of ER&D

ER&D players have used various solution accelerators, frameworks, and IPs (Intellectual Property) to provide differentiated services to their headquarters and global customers across verticals, including automotive, industrial, telecom, healthcare, and more. 

The differentiated service delivered by Global Capability Centers (GCCs) and Engineering Service Providers (ESPs) has helped their customers in a multitude of ways, such as creating new business opportunities and revenue streams, enabling cost reduction and control, improved time to market. 

The Scope of ER&D Segment

Homegrown ER&D players have increased their scope to assume end-to-end ownership of global products across industry verticals such as healthcare, telecom, automotive, aerospace and defense, and industrial. By leveraging fast and frugal innovation, they have created cost-effective, localized, and customized products for regional and global markets. Some of these ER&D products are Affiniti 30 by Philips, PAG1S by Infineon, Software Defined Radio by Cyient,and Robotic Endotrainer Kit by L&T Technology Services,etc

These products have enabled global enterprises to foray into new market segments, generate non-linear revenue streams, and meet sustainability targets. In addition, they have offered multiple benefits to their enterprise customers, such as optimized total cost of ownership, increased energy savings, improved product features, and efficiency, etc. 






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