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R. Savitha

Pune, July 1 A Nasscom study has reported that engineering offshore services will reach $40 billion by 2020. And several companies are vying to cater to a small piece of that big pie.

Mr Prasad Shetye, Vice-President and Head, Engineering Services, Patni, spoke to Business Line about its outlook on the industry and the future

According to the Nasscom study, engineering offshore services will be valued at $40 billion by 2020. From which areas would this be coming in? What are the trends observed in this space, which would ultimately reach the quoted figure?

According to a study by Nasscom and Booz Allen Hamilton on Engineering Offhore Services the global engineering services market will reach $750 billion, of which about $10–$15 billion is offshored. India accounts for about 12 per cent of the total offshore market – $1.2 billion–$1.8 billion. This could go up to $40 billion by 2020 and an increase in India’s share to approximately 20 per cent –25 per cent. The total offshored market is likely to grow to $150–$250 billion by that time.

This is equal to more than 2.5 lakh jobs for Indian engineers. India’s current share of offshored engineering services market is about 12 per cent and is relatively small compared to the information technology and business process outsourcing sectors. It is well positioned to increase its marketshare of engineering offshoring from 12 per cent to 30 per cent by 2020.

Patni feels that majority of this outsourcing will happen in the R&D space. The aerospace and automotive sectors that have traditionally led the outsourcing bandwagon will continue to do so and retain a major chunk.

We feel that these will be closely followed by the medical, industrial automation and consumer electronics sectors. We also see a lot of outsourcing development coming from the European region.

This geographical extension to traditional US outsourcing will provide a major boost to the Indian vendors.

More Stories on : Outsourcing | Research & Development | Engineering

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‘R&D will drive engg offshore services growth’

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