NEW
DELHI: A $40-billion pie is there for the grab, if the
Indian IT industry takes advantage of global outsourcing needs of the
aerospace, automotive and Hi-tech industry. This is the substance of the study
on “Globalization of Engineering Services — the Next Frontier for India”
conducted by
NASSCOM and management consulting firm Booz Allen Hamilton.
India
enjoys a relatively strong position in the automotive and
high-tech / telecom engineering services market with a US$25 billion
opportunity by 2020, says the report. Aerospace offers the greatest potential
for expansion — though it is also one of the toughest opportunities to tap
because of its close association with the defence sector.
This
report, a first of its kind study, takes a systematic and comprehensive view of
the role of emerging markets in engineering services and assesses the evolution
of the engineering market between 2005 and 2020.
Elaborates BVR Mohan Reddy, chairman
NASSCOM Engineering Services Forum, “Spending on engineering services was
$750 billion in 2004 and is projected to increase to $1.1 trillion by 2020. The
report also indicates that the market is highly fragmented by industry with
automotive at 19 per cent, aerospace at 8 per cent and utilities at 3 per cent
in 2004. High-tech / telecom is the dominant and fastest growing sector, with 30
per cent of the market, and the traditional engineering powerhouses — USA,
Germany and Japan have a lead in engineering spend.”
Says
president
NASSCOM, Kiran Karnik, “ The total offshore engineering spend is expected to
grow to US$150 — US$225 billion by the year 2020, and India with its talent pool
and existing experience in engineering services, is well suited to realize 25
per cent of this opportunity. However, we must ensure that required steps are
taken by stakeholders to address possible roadblocks - especially those
concerning workforce”, he added.
“The
demand for engineering talent is growing, and emerging market countries such
as India will play a vital role in expanding capacity,” said Kevin Dehoff, vice
president at Booz Allen. “Companies will increasingly create competitive
advantage by accessing and building core innovation capabilities in a
world-class global network.”
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