R&D Spend by Global 500 Organizations Stands at $621B and Continues to be on the Rise With Focus on Building Digital First R&D Organizations: Says Zinnov
BANGALORE, December 13, 2016 /PRNewswire/ --
- The Addressable Engineering and R&D Globalization and Services Opportunity Stands at $215B
- India, Western Europe and North America Capture ~75% of the Global Engineering R&D Services Market
- Hi-Tech and ISV Segments Share in Global 500 Spenders as Percentage of Revenue is 34%
- India's Engineering R&D (ER&D) Globalization and Services Market Expected to Reach $38 Billion by 2020
- Zinnov Releases an Overall Ranking of the Leading Service Providers in the Product Engineering Services Market, Titled as "Zinnov Zones 2016 - PES"
Zinnov, a leading management consulting firm, today released its recent study on the global rankings of Service Providers in the ER&D segment for 2016, titled, "Zinnov Zones 2016 - PES". Throwing light on the Global Engineering R&D landscape, the Zinnov study read that the R&D spend by Global Top 500 R&D Spenders (G500) companies is growing consistently at 1.5% over the last two years with focus on building digital first R&D organizations. Companies from the Consumer / eWeb 2.0 & E-Commerce vertical have significantly increased their R&D spending.
The R&D spending by the Billion Dollar spenders totalled up to $471B, with five new companies entering the billion dollar R&D spender club this year. It also added that increased demand for embedded and software content is driving the R&D spend.
The Global R&D spending continues to stay highly consolidated with top 100 R&D spenders accounting for two-third of the total R&D spend, it read. Laying specifics on the addressable Engineering and R&D globalization and services opportunity, the Zinnov study pegged opportunity to be around $215B. The current addressed market stands tall at $85B, of which $34B is the Current Addressed ER&D market through offshore in-house R&D Centres, while $51B is the Addressed ER&D Globalisation & Services market through outsourcing partners.
Speaking about the findings, Pari Natarajan, CEO, Zinnov said, "R&D Globalization as a phenomenon is here to stay with locations in emerging economies being the hotspot. Our findings show that the overall R&D Globalisation in Emerging Economies stand at $34B ".
"The drivers for outsourcing have changed tremendously over the last year and some newer trends have emerged like the R&D Service providers exploring engineering opportunities beyond Product Development Life Cycle (PDLC) activities; Emergence of End-to-End Full stack Product Engineering Service providers and the Rise of the Global-Shore model, etc.", he added.
With the Total Addressable R&D Globalisation & Services opportunity in 2016 at $232B this is estimated to reach $289B by 2021. Embedded and Software engineering constitute ~76% of the R&D outsourcing addressable market, said the Zinnov report. On the geographical spread it read that India, Western Europe and North America capture ~75% of the global Engineering R&D Services market. The released study brought to light that India's Engineering R&D (ER&D) globalization and services market which currently stands at $22.3B is expected to reach $38B by 2020.
Zinnov also conducted an overall ranking of global services players in the Product Engineering space titled, "Zinnov Zones for PES 2016", where it mapped the leading service providers in various segments like Mechanical Engineering, Embedded Systems, Aerospace, Automotive, Computer Peripherals and Storage, Construction and Heavy Machinery, Consumer Electronics, Energy & Utilities, Industrial Automation, Medical Devices, Consumer Software, Semiconductor, Telecommunication and Transport. These global players were ranked on the basis of their R&D Practice Maturity, Breadth, Innovation and Ecosystem Connect.
In the context of Zinnov Zones for Product Engineering Services, the team at Zinnov reached out to a limited set of service providers that could be potential leaders in the space. Their set of inclusion criteria enabled them to then shortlist them and effectively based on which service providers were further invited to participate. For details on the overall ranking of players and individual categories, please log onto the following link: http://www.slideshare.net/zinnov/zinnov-zones-2016-pes-executive-summary
About Zinnov Zones:
Zinnov Zones is an annual rating published by Zinnov which rates Service Providers based on their competencies and capabilities. Since 2009, Zinnov Zones (previously known as GSPR - Global Service Provider Ratings) has become one of the most trusted reports globally, for both enterprises and service providers to better understand the vendor ecosystem in multiple domains.
Founded in 2002, Zinnov is headquartered in Silicon Valley and Bangalore. In over a decade they have built in-depth expertise in engineering and digital practice areas. They assist their customers in effectively leveraging global innovation and technology ecosystems to accelerate innovation and digital transformation. Zinnov helps their customers:
- Benefit by benchmarking their technology strategy and business models with best practices from peers and technology start-ups
- With large scale engineering and digital transformation through globalization and innovative engagement models
- Build their M&A strategy
- Grow revenue by helping them identify relevant products and services for emerging markets
With Zinnov's team of experienced professionals, they serve clients in Software, Automotive, Telecom & Networking, Semiconductor, Consumer Electronics, Storage, Healthcare, Banking, Financial Services & Retail verticals in US, Europe, Japan & India.
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SOURCE Zinnov Management Consulting
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