Worldwide market trends in Engineering Services

Engineering services is a huge market: global spending for engineering services is currently estimated at $750 billion per year, an amount nearly equal to India’s entire gross domestic product in 2005. By 2020, the worldwide spend on engineering services is expected to increase to more than $1 trillion.

Key sectors that dominate global engineering spends include high-technology / telecom, automotive and aerospace – accounting for over 55 percent of the total. Other sectors include industrial, defense, utilities and construction.



To date, offshoring of innovation services has largely been done in advanced countries — only 9 per cent of the world’s budget for engineering found its way to low-cost countries.





However, like in many other business functions, competitive pressures are driving large corporations to undertake their engineering activities on an increasingly global basis. A 2005 survey by Booz Allen and Duke University’s Centre for International Business Education and Research (CIBER) found that 36 per cent of companies surveyed sent some of their engineering offshore, 31 per cent offshored some research and development, and 16 per cent shipped out a portion of their product design



Of the $750 billion spent today, only $10-15 billion is currently being offshored—a tiny fraction of the total. India brings home about 12-15 percent of today’s offshored market, which it currently shares with Canada, China, Mexico, and Eastern Europe. This trend towards building increasingly global R&D footprints, observed over the past few decades, is expected to accelerate over the coming years with emerging economies – notably India emerging as the destination of choice for these expansions




Updated on: 27 Sep, 2006


Source: NASSCOM

NASSCOM has released the rankings of the top 20 IT-ITES employers in India for FY 06-07.

The rankings are based on the India-based headcount of firms with IT-ITES operations in India, as reported to NASSCOM in its annual survey.

Methodology

NASSCOM sends out a detailed questionnaire annually to all its member companies, accounting for 95 percent of the Indian IT software and ITES industry revenue. Information collated through the questionnaire includes: aggregate performance; service lines; verticals and geographies.

Key findings of the survey:

The top 20 companies collectively employ over 500,000 people of the 1.6 million employed directly in the industry

IT-ITES industry is India’s largest employment generator in the organized sector IT-ITES industry is creating jobs for over 7.5 million people both directly and indirectly and this figure is expected to cross 10 million by 2010

A varied combination of factors have led to this - healthy growth environment, attractive remuneration and different kinds of employment opportunities in the new economy based on varying skill sets, and above all the availability of talent in India which meets the employment projections

This industry needs to work on is the quality factor to ensure we remain the highest employment generator and maintain India’s share of the global offshore IT and ITES industry

Employment is spread across many cities, and the industry is increasingly going to tier II and tier III cities

This process of widespread geographical dispersion of the industry is being adversely affected by the non-extension of the STPI scheme and attendant tax incentives

NASSCOM, DRDO Collaborate to Develop Innovative Technologies

National Association of Software and Services Industry (NASSCOM), the Indian IT industry lobby, has signed a deal with the Indian Defence Research and Development Organisation (DRDO) to focus on developing innovative technologies.

Under the terms of the memorandum of understanding, NASSCOM’s expertise will complement DRDO’s capabilities to develop advanced projects for the IT industry. In addition, the agreement will enhance the involvement of the IT software companies for DRDO’s development projects.

DRDO’s advanced military systems projects are increasingly relying on software, thus, its partnership with NASSCOM is essential for the development of its software projects related to radars, electronic warfare systems, flight control systems, avionics, missile systems, and command, control, and communication systems.

According to Kiran Karnik, the President of NASSCOM, the partnership with the Indian R&D agency will allow NASSCOM to focus on creating an innovative ecosystem.

DRDO has been successful in developing various innovative technologies across areas, such as aerospace, control systems, communication, etc. This was the prime reason for NASSCOM to choose DRDO as its partner. In addition, the Indian IT industry is moving up the value chain in these areas, and thus, DRDO’s expertise is very relevant and of interest to the industry.