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Flying high on outsourcing

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CIOL Bureau
New Update

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.

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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.

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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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