Study: US$42 Billion In Engineering R&D Outsourced To India By 2020

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At least US $42 billion worth of research and development and product engineering work will be outsourced to India by 2020, and will grow at 14% annually, according to a new study from Zinnov Management Consulting.

Infosys headquarters in Bengaluru, India

Infosys is one of the major outsourcing firms in India.

“The Indian captive landscape has grown to 874 centers as compared to 836 in fiscal 2011,” Pari Natarajan, Zinnov’s CEO, told The Economic Times of India. “Even in the telecom sector for that matter, deregulation in India and China is fueling the future growth prospects.”

The nation will face competition from outsourcers in Russia and China, according to Zinnov’s study “Engineering R&D: Advantage India.”

India To Remain Outsourcing Leader

India will remain leading offshore destination for such work, with a market share of 22%, according to Zinnov, a gloabl outsourcing consulting firm.

Global corporations are again focusing on innovation, Zinnov reports, following a short lull caused by factor such as the global economic crisis and the natural disaster in Japan. R&D outsourcing by firms in North America and Europe is again in the rise. These two regions respectively account for 35% and 32% of global R&D spending.

Automotive, health care and industrial verticals are poised for growth globally and will drive future business offshoring to India.

The offshoring future operations will likely either take the form of multi-national corporations setting up research centers in within the country or in outsourcing work to Indian firms, according to the Zinnov report.

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