Economy

'Engineering R&D to draw investments of $42 billion by 2020'

| Updated on: Sep 25, 2012

The country is expected to attract investment of $42 billion in engineering R&D by 2020, according to a recent survey.

“India is the leading destination for product engineering services with 22 per cent market share and total R&D investment expected to grow at a 14 per cent CAGR from $14.7 billion in FY12 to $42 billion by 2020, mainly driven by the growing ecosystem of captives, service providers and start-ups,” Zinnov Management Consulting said in its report `Engineering R&D: Advantage India’

According to the report, captive centres are growing in maturity and global significance with core research teams located in the country co-creating innovations with service providers and playing a decision-making role in global sourcing initiatives.

“There has been significant activity in the domestic captive landscape in FY12, with the presence of 874 centres as compared to 836 in FY11 and the determining factor for this is the strong focus on emerging nations as target markets across major verticals,” Zinnov Chief Executive Pari Natarajan said in a statement.

Further, the report mentioned that engineering services in the country for healthcare and automotive are growing faster than traditional verticals such as ISV and telecom, at 26 per cent and 17 per cent CAGR, respectively.

“The automotive, healthcare and industrial verticals are hot sectors that are poised for growth globally and are correspondingly expected to drive future MNC captive centre growth. Further, MNC captive centres are also growing in maturity, with many companies starting their core research teams operating from India,” he said.

Published on September 25, 2012

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