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Global Engineering R&D Pulse Survey 2022

Global demand market insights

Markets world over have endured a series of shocks over the past 2 years – first the COVID-19 pandemic, and then its long-term implications on economy and supply chain, pushing every company into uncharted territories. While it is safe to say that every enterprise function has had to improvise and evolve to address the challenges it is facing, of particular interest is the Engineering Research and Development (ER&D) function, known for its levels of standardisation in work and delivery model historically.

The need for ER&D to adapt almost overnight to its teams being decentralised and the economic constraints compelling them to ‘do more with less’ have driven the function to effectively reinvent itself in the past year. But this has also opened new avenues of opportunity: as companies realise that even R&D (that traditionally operated out of a central physical location) could be run remotely, we are progressively seeing the function take risks with hybrid ways of working, digital engineering, new innovation acceleration models, and having even upstream work executed through globally distributed models.

The NASSCOM-Deloitte Global ER&D Pulse Survey 2022 attempts to put a finger on the pulse of the latest thinking and sentiment amongst the R&D leaders worldwide. The study yielded a number of key findings and trends that help predict how the function will transform in the coming years.

Market insights

There is a gradual but steady recovery in ER&D spend across sectors globally, with 70% of the surveyed companies stating that they have already surpassed their pre-COVID levels of ER&D spend this year

While the top investment area for ER&D understandably is the creation of customer-centric, connected products, there is an increasing prioritization of spend on developing products for sustainability & circular economy, building a technology ecosystem, and globalizing the R&D footprint

Supply chain disruption continues to be the top challenge that organisations are grappling with in the aftermath of COVID-19. But companies are also facing growing pressures due to continuously accelerating innovation / product development cycles and faster time to market

Evolving delivery models

In response to the increasing speed of technological changes, co-creation is emerging as an innovation model of choice, with companies exploring collaboration with start-ups, academia, Engineering Service Providers and competitors

Even as 50 percent of the ER&D workforce globally is predicted to be based fully out of office by 2024, 1 in 3 employees will continuing to operate either in hybrid or fully remote models

India growth story

India continues to be the ER&D destination of choice, with over 70 percent of the surveyed companies with Global Capability Centre (GCC)/Engineering Service Provider (ESP) in India planning to increase their ER&D spend in their India GCCs or ESPs this year

Research and Advanced Engineering – especially in advanced technologies, such as Artificial Intelligence (AI)/Machine Learning (ML), automation, and big data – is shaping up to be the principal focus area for India GCCs and ESPs

Respondents Overview:

Responses were gathered from 104 R&D leaders from 99 unique companies across 19 countries.

The survey covered eight major sectors within ER&D and about 80 percent of respondents were senior decision-making leaders in ER&D verticals of their respective companies.

 

Download the report for more insights on priorities, challenges, delivery model evolution, and the growing importance of Global Capability Centers and Engineering Service Providers.

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