Investments in Digital Engineering to Drive Growth Within ER&D Market: Says Zinnov

BENGALURU, November 29, 2017 /PRNewswire/ --

- Global ER&D spending stands in excess of USD 1 trillion, of which the G500 R&D spend alone is at USD 640-650 billion
- Automotive and Internet & Software companies account for 30-35% of the G500 R&D spend
- United States contributes 45% of the global R&D spend, followed by Europe and other geographies
- Investments in Digital Engineering is expected to grow at 15-20%, and will drive future Global ER&D spend

Zinnov, a global management and strategy consulting firm, today released its study on the global rankings of Service Providers in the ER&D segment for 2017, titled, 'Zinnov Zones 2017 - Product Engineering Services', an analysis of the Global Engineering R&D landscape, evolving customer preferences, and assessment of Service Providers in this space. According to the study, the total corporate Engineering and R&D spend is pegged in excess of USD 1 trillion, and further growth is expected to be driven by investments in digital engineering.

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From a geographical perspective, the report revealed that enterprises headquartered in the United States contribute to ~45% of the global R&D spend led by companies like Amazon, Alphabet, Microsoft, Intel, and MERCK & Co. European headquartered enterprises in comparison were a distant second, accounting for ~29% of the global R&D spend. Another perspective distilled was that R&D spending continues to stay highly consolidated, with top 100 R&D spenders accounting for two-thirds of the total R&D spend, with the dominant industry verticals being Automotive, Software/Internet, and Telecom. Interestingly, the top 100 R&D spenders saw nine new entrants, primarily from Software & Internet and Automotive verticals.

Speaking about the findings, Pari Natarajan, CEO, Zinnov, said, "Enterprises seek to drive agile product development, improve operational efficiencies, and enhance overall product ownership experience for end customers. As a consequence, they are investing in new-age technologies such as AI, Robotic Automation, Blockchain, Big Data, AR/VR, and 3D Printing. This in turn will drive growth in digital engineering spend, which is expected to grow annually by 15-20%. The reality is Service Providers who focus on embedding digital technologies with digital outcomes and build deep capabilities to drive change across enterprise-level architecture will succeed."

The report also provided a perspective on how end customers' expectations are increasing significantly as they seek more differentiated capabilities across multiple areas. Aspects like competency across next-generation engineering technologies, differentiated business models, and ecosystem engagements are the most sought-after. This change is largely being driven by the Automotive, Industrial, Telecom, Software, and Medical verticals. To provide a more comprehensive study, in addition to the landscape overview, Zinnov also conducted an overall ranking of global services players in the Product Engineering space.

About Zinnov Zones for Product Engineering Services 2017:   

'Zinnov Zones 2017 - Product Engineering Services' rates 40+ global Service Providers on their product engineering prowess. Service Providers were assessed based on multiple dimensions such as spread and maturity of delivery and services capabilities, scalability, growth rate, financials, innovation & IP, ecosystem linkages, and feedback from enterprise buyers.

The ratings were done extensively across segments: Mechanical Engineering, Embedded Systems, and Software (Enterprise and Consumer) as well as verticals such as Aerospace, Automotive, Computer Peripherals and Storage, Construction and Heavy Machinery, Consumer Electronics, Energy & Utilities, Industrial Automation, Medical Devices, Semiconductor, Telecommunication and Transport to analyze a service provider's overall position.

About Zinnov:  

Zinnov was founded in 2002, and is headquartered in Bangalore, with presence in Gurgaon, Silicon Valley, and Houston. Since its inception, Zinnov has built in-depth expertise in Product Engineering and Digital Transformation. They assist their clients by:

- Research and strategy consulting for software service providers in the areas of Product Engineering and Digital Transformation;
- Enabling companies to develop and optimize a global engineering partner strategy to achieve higher throughput, innovation, productivity, and cost savings;
- Growing revenue for company's products and services in India and other emerging markets;
- Helping MNC GICs to consolidate their geographic footprint.

With their team of experienced professionals and research teams, Zinnov serves clients across software, semiconductor, consumer electronics, automotive, storage, telecom & networking, healthcare, banking, financial services, and retail verticals in US, Europe, Japan, and India.

For more information, visit

Media Contact :
Nitika Goel
Director - Marketing, Zinnov

SOURCE Zinnov Management Consulting

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