Long Way For Nascom to Achieve $100b Engineering Research and Development Goal

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Team Industry Outlook | Monday, 30 September 2019

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Nasscom has set a goal of $100 billion for India’s engineering research and development sector. The industry executives believe that many factors ranging from government policies to availability of talent will have to be sorted out first for achieving this goal. The Indian ER&D sector which employs 7,00,000 people in the country, could increase to one million by 2025 if conditions for growth become more congenial.

“This is an aspirational target. We have to stretch to get here and several aspects will need to fall in place. We will need government support in aspects like incentives for setting up facilities and creating talent skills.” The government could also assist the companies to boost the sector by setting the centre of excellence to showcase skills in various technologies.

The ER&D sector is burgeoning and is growing at apace faster than the core IT sector business. This is because global companies across industries have started outsourcing larger parts of their engineering research.

TCS has acquired 1,200 employees in a deal worth $500 million, one of the largest in the ER&D space. Many companies are setting R&D facilities in India. About 40 R&D global captive centers were set up in 2018. “The sector will reach $75 billion by 2025 with the way we are growing now; it is the additional $25 billion that we are focusing on getting,” said KS Vishwanathan, vice-president for industry initiative at Nasscom. To achieve this the industry is tapping different markets.

Ajay Prabhu, chief operating officer at QUEST Global said, “We have focused on the English speaking world, but now we also need to grow more in Germany and Japan, which are large engineering markets.” There is also a need for Industry to ensure the availability of skilled talents who can help in the creation of a product culture with expertise in product management and also reduce the domain gap.
Nasscom is trying to change the perception of India from a service-outsourcing haven to a production hub. It is also in collaboration with the Karnataka government trying to chalk out “initiatives that promote, enable and position Karnataka as the global ER&D destination, attracting significant investments high-end research capabilities and skilling initiatives in the state,” Nasscom said. The state government will be providing financial support for this purpose.