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Global Multinationals Shifting Their ER&D Centres To India, China

The number of headcount in the captive centres will surpass that of the company headquarters mainly driven by the skills offered by the emerging geographies

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Global multinationals are shifting their engineering research & development (ER&D) centres towards the eastern emerging geographies like India and China, said Pari Natarajan, CEO of Zinnov at the annual conference 'Confluence 2016'.

In terms of the global ER&D footprint of top 10 companies spread across 13 industry verticals this year, China ranked highest with 200 centres followed by India with 156 centres, according to a Zinnov report. Both China and India are next only to the West Coast in the US with 180 ER&D centres, the largest cluster globally. By 2020, the number of ER&D hubs in China and India are expected to surpass that of the US.

As a result, the number of headcount in the captive centres is also expected to surpass that of the company headquarters mainly driven by the skill sets the emerging geographies offer. Also, today the Indian captive centres are no longer at the periphery, but are at the core of a dynamic global innovation fabric, Natarajan said.

"India has established itself as a prime destination to drive strategic R&D for global corporations," Natarajan said. India's ER&D globalisation market stood at $12.3 billion in 2015-16 and added about 1.3 million direct and indirect jobs. Globally, the top 500 companies added over $150 billion in R&D spend in the last five years with an incremental spend of over $200 billion driven by emerging technologies like artificial intelligence, augmented reality, big data, and internet of things.

The startups are taking the lead in the evolution of the next-generation technologies with 65 per cent of the Indian startups focusing on R&D in software, 15 per cent in healthcare, and 10 per cent in the industrial sector.


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