The relevance of ER&D in accelerating growth of businesses across industries has become prominent with the emphasis on innovation and leveraging technology for improving processes, design, and services.

The year 2021 paved way for an increased focus on ER&D function to drive solutions for challenges related to talent shortage, supply chain diversification, research to fuel growth and meeting rising consumer demand. The spend on ER&D from top 1,000 corporates increased significantly in 2021 which was a positive shift from 2020 when investments in ER&D were impacted adversely due to the onset of COVID-19 pandemic.

The renewed interest in R&D led growth has also shifted the focus on identifying the most suitable locations to expand ER&D operations. While locations that offer the right mix of talent availability and existing industry presence are attractive for enterprises, the level of maturity associated with a location to facilitate digital transformation and readiness to implement hybrid working models also feature prominently in the location strategies of companies to set up ER&D delivery centres.

This report analyses the attractiveness of 18 established hotspots across the globe for ER&D operations. The report intends to guide stakeholders in the ER&D industry to assess and identify the right location strategies fit to their growth plans. The location analysis of 18 countries which involves a comprehensive assessment of four key parameters, namely talent availability, cost attractiveness, ER&D industry ecosystem, and business environment, is supplemented with location strategy templates for different ER&D players.

India, which consistently features among the most attractive locations across different parameters, has strengthened its position as a location of choice in the global ER&D landscape owing to its large skilled talent pool, attractive costs, extensive network of established and emerging ER&D hubs, and presence of leading global ER&D players. The report also evaluates the attractiveness of 8 leading Indian ER&D hotspots and indicates the more suitable location choices for ER&D companies and engineering service providers exploring India to set up ER&D delivery centres.

The report identifies leading locations among global and Indian hotspots with respect to key parameters pertinent to ER&D centres:

  • Key locations that provide relevant human capital for scaling ER&D operations
  • Most attractive locations for players primarily considering cost of operations and labour in their plans to sustain research operations
  • Locations with established industry ecosystem to support partnerships and accelerate growth with a mature network of stakeholders
  • Locations that offer highly facilitative business environment to set up facilities specific to ER&D

This report titled “Engineering research and development - Global location analysis” authored by NASSCOM-KPMG in India provides an overview of global ER&D industry and offers objective assessment of leading ER&D locations globally. This report also provides insights into emerging operating models and location strategies adopted by global ER&D players in form of case studies that highlight success stories and future-ready approach.

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