Indian offshore engineering research and development (ER&D) services market is expected to reach USD 37-45 billion by 2020 and create over one million jobs, software industry body Nasscom said.
This exponential growth is a result of flexible business models, short product life cycles and decreasing time to market, Nasscom President Som Mittal said at the two-day Engineering Summit 2012 at Pune.
"Indian ER&D service has played a pivotal role in accelerating innovation and is establishing India as a design and innovation hub," Mittal said, adding that incremental growth will be driven by newer verticals and markets.
ER&D exports are estimated to be USD 10.2 billion, growing year-on-year at 14 per cent and comprising 15 per cent share of the IT-BPO exports.
Mittal said the domestic Indian ER&D market is expected to add to future growth with infrastructure, automotive, aerospace and energy as well as increasing focus on promoting local manufacturing.
"To further build on this leadership position, the industry needs to pursue continued efforts to build a high-calibre R&D pool by instilling relevant research aptitudes and capabilities, both from educational and training perspective," Mittal added.
While the ER&D services industry has been growing by leaps and bounds, certain challenges exist and require immediate redressal.
"India needs to sustain its cost competitiveness and fill its absence of linkages to manufacturing capabilities. Also, lack of a formal innovation policy and supporting ecosystem will pose a threat to the budding ecosystem. Collaborative action is required to ensure future growth," he said.
India is now an emerging epicentre of the global ER&D market with more companies exploiting its supply base for future growth.
"It is important for major stakeholders of this industry -- Indian Government and trade associations to ensure the growth trajectory of the industry and moving it to the next level of product development," Mittal said.
The theme of the summit is 'Engineering Innovations for a better world' and has focus on key verticals including automotive, robotics, construction, heavy engineering and telecom.