Indian ER&D sector expected to reach $45 bn by 2020

PUNE, INDIA: The National Association of Software and Services Companies (NASSCOM) today said the Indian Engineering R&D services sector is expected to reach $37-45 billion by 2020 and will create over a million jobs.

''Indian ER&D service has played a pivotal role in accelerating innovation and is establishing India as a design and innovation hub,'' Som Mittal, Nasscom president said at the fourth edition of NASSCOM Engineering Summit at Pune.

''To further build on this leadership position, the industry needs to pursue continued efforts to build a high-caliber R&D pool by instilling relevant research aptitudes and capabilities, both from educational and training perspective,'' Mittal added.

According Nasscom, India is gaining depth in its ER&D capacities offering end to end product development. Indian offshore ER&D market is expected to reach $ 37-45 billion by 2020 and will create over 1 million jobs.

This exponential growth in the Indian ER&D services is a result of flexible business models, short product life cycles, decreasing time to market and flexible capacity driving ER&D sourcing. Growth in this area is being driven by need for new products to meet the growing demand in emerging economies as well as fast evolving customer preferences.

Incremental growth for the sector will be driven by newer verticals and markets. Significant opportunity exists for supply base to develop product-based solutions that encompass other service offerings. Domestic Indian ER&D market is expected to add to future growth with infrastructure, automotive, aerospace & energy and increasing focus on promoting local manufacturing.

"Over the past decade, global ER&D spend has been growing steadily and the industry is targeting new growth engines, driving globalization of the ER&D structure across verticals and gaining a foothold in ER&D services off shoring,'' Ravi Pandit,  NASSCOM Engineering Services chairman said.

Further the KPIT Cummins chairman and group CEO concluded, ''Though the Indian engineering services industry has been a leader, it needs to drive concerted initiatives to strengthen the innovation capacity and research capabilities through specific domain focus and by encouraging R&D collaborations."