Bengaluru, November 30, 2017
Zinnov, a global management and strategy consulting firm, 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 ER&D spend is pegged in excess of USD 1 trillion, and further growth is expected to be driven by investments in digital engineering.
From a geographical perspective, the report revealed that enterprises headquartered in the United States contribute to approximately 45 per cent of the global R&D spend led by companies like Amazon, Alphabet, Microsoft, Intel, and Merck and Co. European headquartered enterprises in comparison were a distant second, accounting for 29 per cent 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 verticles.
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 per cent. 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, 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.
'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 and 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 and utilities, industrial automation, medical devices, semiconductors, telecommunication and transport to analyse a service provider's overall position.