Engineering R&D outsourced to India to touch $42 billion by 2020: Zinnov

BANGALORE: At least $42billion worth of research and development work product engineering will be outsourced to India by 2020, marking a growth of at least 14% every year from now, according to a recent study by Zinnov Management Consulting.

"The Indian captive landscape has grown to 874 centers as compared to 836 in fiscal 2011. Even in the Telecom sector for that matter, deregulation in India and China is fueling the future growth prospects," said Pari Natarajan, CEO at Zinnov.

However, India will face stiff competition from service providers in Russia and China, according to Zinnov's study Engineering R&D: Advantage India, results of which were released on Monday. India, will remain leading offshore destination for such work, with a market share of 22%, according to Zinnov.

After a brief lull in activity on account of macroeconomic factors like global economic crisis and natural disaster in Japan, global corporations are again focusing on innovation, driving R&D outsourcing by MNCs in North America and Europe. These two regions account for 35% and 32% of the global R&D spend respectively.

Automotive, healthcare and industrial verticals are poised for growth globally and consequently, will drive future offshoring to India, either in the form of multi-national corporations setting up research centers here or by outsourcing work to Indian services providers.