NASSCOM ER&D
Report 2014
Reaching the Inflection
Point?
Booz & Company is now Strategy&
Strategy&
1
Global strategy
model, leading
foresight,
capabilities
positioning
Sca...
Over last 8 years, we have collaborated with NASSCOM on
the ER&D study
Strategy&
2
2006
“Globalization of
Engineerin...
Global ER&D spend will grow to US$ 1.6 - 1.7 Tn by 2020
Total: US$ ~1.400 Trillion
Strategy&
Share of Global ER&D Spend...
Corporate ER&D spend will cross $850 Bn in same period
Strategy&
Global Corporate ER&D Spend by Verticals
5% 7%
7%
3%...
US and Europe are major geographies; Asia will grow fastest
Strategy&
21%
29%
38%
2%
0.4%
6%
4%
16%
20%
23%
2%...
Six key trends will drive ER&D spend globally
• Miniaturized Inverters
• Wearable Medical devices
• Smaller CNG
compre...
Propensity to offshore is increasing
High
Strategy&
Propensity to Offshore – Product Development Value Chain
Source: 2...
India can capture a third of the market
Strategy&
76%
Global ER&DOffshoring Market
24%
69%
31%
2012-13 2020
India ...
India continues to be a preferred offshoring destination
Strategy&
Country Preference for Offshoring Engineering Service...
Outsourcers see positives with Indian services providers
Source: 2014 ER&D demand side survey and interviews, Strategy& I...
Focus on enhancing capabilities while promoting India as
the ‘go-to’ ER&D destination will hold the key to the future
St...
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NASSCOM Engineering Summit 2014: Panel discussion I: Indian ER&D Industry reaching the inflection point: Nilesh Narwekar

Nilesh Narwekar Partner and Vice President at Strategy& (formerly Booz & Company)
Published on: Mar 3, 2016
Published in: Business      
Source: www.slideshare.net


Transcripts - NASSCOM Engineering Summit 2014: Panel discussion I: Indian ER&D Industry reaching the inflection point: Nilesh Narwekar

  • 1. NASSCOM ER&D Report 2014 Reaching the Inflection Point?
  • 2. Booz & Company is now Strategy& Strategy& 1 Global strategy model, leading foresight, capabilities positioning Scale, quality prominence, and deep relationships, skills, and insight Our Vision The pre-eminent strategy through execution firm that delivers superior value, offers premium talent, and is differentiated by its ability to help clients build their own capabilities on a global scale. Strategy& Vision
  • 3. Over last 8 years, we have collaborated with NASSCOM on the ER&D study Strategy& 2 2006 “Globalization of Engineering Services” 2014 “Reaching the inflection point?” 2010 “Accelerating Innovation with Indian Engineering” 2012 “India’s Maturing Ecosystem” Source: NASSCOM, Strategy&
  • 4. Global ER&D spend will grow to US$ 1.6 - 1.7 Tn by 2020 Total: US$ ~1.400 Trillion Strategy& Share of Global ER&D Spend 32% 19% 49% 18% 51% 30% Corporate ER&D (Top 2000 Companies) Total: US$ 1.6 - 1.7 Trillion Corporate ER&D (Others) Government ER&D Source: Literature review, Strategy& Innovation 2000 database, Strategy& IC, Strategy& analysis 3 2012-13 2020
  • 5. Corporate ER&D spend will cross $850 Bn in same period Strategy& Global Corporate ER&D Spend by Verticals 5% 7% 7% 3% 3% 11% 16% 39% 1% 1% 4% 3% 41% 3% 0% 1% 3% 16% 4% 5% 6% 6% 3% 11% Automotive Aerospace Energy Medical Devices Consumer Electronics Semiconductors Telecommunications Computing Systems Machinery Construction Industrial Automation Others Total: US$ ~700 Billion Total: US$ 850-900 Billion Source: Literature review, Strategy& Innovation 2000 database, Strategy& IC, Strategy& analysis 4 2012-13 2020
  • 6. US and Europe are major geographies; Asia will grow fastest Strategy& 21% 29% 38% 2% 0.4% 6% 4% 16% 20% 23% 2% 2% 8% 29% Global Corporate ER&D Spend by Geography US Europe Japan China Rest of Asia India RoW Asia Total Source: Literature review, Strategy& Innovation 2000 database, Strategy& IC, Strategy& analysis 5 2012-13 2020 Total: US$ ~700 Billion Total: US$ 850-900 Billion
  • 7. Six key trends will drive ER&D spend globally • Miniaturized Inverters • Wearable Medical devices • Smaller CNG compression units • Localized Automobiles • Localized Consumer Electronics Strategy& Key ER&D Themes Connectivity ER&D Themes Digital Engineering Sustainability Miniaturization Localization Software-led Differentiation Source: 2014 ER&D demand and supply s interviews, Strategy& IC and analysis • Connected Cars • Connected Flights • Connected Medical Devices • Design Virtualization • Concurrent Engineering • Simulation-based Testing • Fuel Efficiency • Advanced Materials (Composites) • Alternate Fuels • Intelligent Cars • Digital Oil-fields • Smart Engines • In-flight Entertainment 6
  • 8. Propensity to offshore is increasing High Strategy& Propensity to Offshore – Product Development Value Chain Source: 2014 ER&D demand side survey and interviews, Strategy& analysis Post Introduction Production Testing and Validation Prototyping Detailed Engineering Concept Development Propensity to Offshore Low +32% +86% +58% +33% +28% +24% Current (2014) Future (2020) 7
  • 9. India can capture a third of the market Strategy& 76% Global ER&DOffshoring Market 24% 69% 31% 2012-13 2020 India RoW Total: US$ ~63 Billion Total: US$ 100-110 Billion Source: Strategy& demand side interviews, Strategy& IC and analysis 8
  • 10. India continues to be a preferred offshoring destination Strategy& Country Preference for Offshoring Engineering Services Source: 2014 ER&D demand side survey and interviews, Strategy& IC and analysis • High preference • Low preference 9
  • 11. Outsourcers see positives with Indian services providers Source: 2014 ER&D demand side survey and interviews, Strategy& IC and analysis Strategy& Key Positives Areas of improvement Scalability of resources Cost effectiveness Greater maturity in offshoring Senior leadership engagement Design capabilities 10 Program management Quality and reliability Innovative approach to solutions Prototyping capabilities
  • 12. Focus on enhancing capabilities while promoting India as the ‘go-to’ ER&D destination will hold the key to the future Strategy& Call to Action for India ER&D Industry Growth Source: Strategy& analysis Positioning Business Environment Capability 11 A Capability Development • Digital engineering hub • Hardware capabilities • Deployable technical talent • Acquisitions and expert hiring Enhanced Profile • Evolved value proposition • Globally recognized accreditations • Global footprint and strategic partnerships Attractive Business Environment • Investor friendly policies • Govt. funded research programs • Industry academia collaboration B C

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