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‘Long road to Nasscom’s $100 billion engineering R&D goal'

The Indian ER&D sector already employs about 7,00,000 people in the country, which could rise to one million by 2025, if the conditions for growth become more favourable, experts said.

, ET Bureau|
Sep 30, 2019, 07.29 AM IST
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Nasscom is looking at tweaking the branding of the country to make it clear that India is not just a service outsourcing destination — it can be a good product destination too.
Bengaluru: Nasscom may have set a $100 billion by 2025 goal for India’s engineering research and development sector, but industry executives believe several factors — from government policies to availability of talent — will have to fall in place for it to get there.

The Indian ER&D sector already employs about 7,00,000 people in the country, which could rise to one million by 2025, if the conditions for growth become more favourable, experts said.

“This is an aspirational target,” said Karthikeyan Natarajan, global head for engineering, IOT and enterprise mobility at Tech Mahindra.

“We have to stretch to get here and several aspects will need to fall into place. We will need government support in aspects like incentives for setting up facilities and creating talent skills.”

The government could also boost the sector by helping set up centres of excellence to showcase skills in various technologies, he told ET.

The ER&D sector is growing faster than the core IT sector business as global companies across industries begin to outsource larger part of their engineering research.

Earlier this month, TCS acquired more than 1,200 General Motors employees in a deal worth over $500 million over five years, one of the largest in the ER&D space.

Several companies are setting up R&D facilities in India. About 40 R&D global captive centres were set up in 2018. Yet, software industry association Nasscom’s target seems ambitious. “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 Viswanathan, vice-president for industry initiatives at Nasscom.

To achieve that, the industry needs to tap different markets.

“We have focused on the Englishspeaking world, but now we also need to grow more in Germany and Japan, which are large engineering markets,” said Ajay Prabhu, chief operating officer at engineering services firm QuEST Global. “So, we need to build those language skills from a high-school level.”

The industry also needs to ensure availability of skilled talent who can create a product culture with expertise in product management and to bridge the domain gap.

Nasscom is looking at tweaking the branding of the country to make it clear that India is not just a service outsourcing destination — it can be a good product destination too.

The industry lobby is also working with the Karnataka government to drive “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 last week. The state government would provide financial support to enable the initiatives.

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