Nasscom, an industry association, has asked the government for assistance in assisting the engineering and research and development (ER&D) business in creating super innovation clusters in India. “These clusters might focus on innovative manufacturing, electric vehicles, 5G security standards, healthcare, and other fields. To strengthen India’s innovation potential, it is vital to identify a few hotspots across the country where academic research, talent, and start-ups may coexist and establish a holistic model. “Israel has done it, and Kerala is attempting to follow in their footsteps,” said K S Viswanathan, Nasscom’s vice-president (industry initiatives).
About 48% of the world’s top 2,000 R&D spenders do not have a presence in India, and are mostly from North America, Korea, Europe, and Japan. Viswanathan went on to say that the industry was working with the federal and state governments to bring more of these enterprises to India.
Of the 500-600 companies present in the Indian ER&D space, 45-50 per cent are engineering service providers, and 55-60 per cent are global multinational corporations (MNCs) and global contact centres. According to Nasscom’s Strategic Review for FY22, companies such as Accenture, DXC Technology and Capgemini moved into the ER&D segment last year, while players like Cyient, Onward Technologies, VLSI/Chip design firms and medical devices firms shifted focus to greater ER&D. “Engineering products have a direct impact on customers,” said Karthikeyan Natarajan, chief operating officer and executive director at Cyient.
According to Nasscom, India’s contribution of the worldwide ER&D industry is predicted to expand at a CAGR of 12-13 percent between 2019 and 2025, reaching $63 billion from $31 billion in 2019. Global firms in the automotive, aerospace, consumer electronics, medical devices, industrial and energy, semiconductor, and telecom sectors are driving this expansion. The epidemic caused a worldwide decrease in ER&D spending. Because of insourcing and carve-outs, the global ER&D sourcing market in 2020 was $89 billion, down 6% from 2019.