For The First Time In Six Years, Global R&D Spending Decreases: Zinnov Study Send
Thursday, January 27, 2011

(1888PressRelease) Companies headquartered in APAC were the only ones to increase their R&D spending.

 

Zinnov Management Consulting, a Leading Management Consulting firm, today released its most-sought after report on R&D spending titled, 'Global R&D Benchmarking 2010''. The study targeted at the MNC R&D centers in India, brings to light that for the first time in six years, global R&D spending has decreased, however, this decline is much lower than the decline in net sales, which indicates the strategic importance of R&D.

 

Highlighting the vertical split of R&D spending, the report read that verticals like Automotive, Semiconductor and Telecom have witnessed a significant decline in absolute R&D spending while others remained steady. It also added that companies headquartered in APAC were the only ones to increase their R&D spending, with the contribution being more than 10 percent of the global R&D spending at PPP. The Top 500 R&D spenders account for close to 90% of the total corporate R&D spending in the world with the majority of investments coming from North America (NA) and Europe (EU).

 

Speaking about the study, Mr. Pari Natarajan, Chief Executive Officer, said, "Our study showcases that only about 27% of the top 1,000 R&D spenders have a center in India, infact in some verticals, less than 20 % of the companies headquartered in APAC, EU and Japan have an India R&D center. India still accounts for a small proportion of the total R&D investments by global companies despite having a strong talent pool across verticals".

 

"We have noticed that only a few large centers have been set up in India, with most of the centers having an employee headcount of less than 300. We very strongly feel that there is indeed a lot of scope to expand for optimization", he added.

 

Giving specifics of geographical growth, the study read that North America dominates Software R&D and even though most R&D centers for software in India are mature, the need for diversification may increase competition from alternate locations such as China. Talking about Industrial vertical as a segment, it read that companies of various sizes from Europe, Japan and North America contribute to the R&D there, while as for India, the R&D centers in the segment started only recently and are still ramping up.

 

Talking about the Semiconductor vertical, the study read that North America is one of the top R&D spenders in the segment and even though India R&D centers are mature, the competition from other APAC locations is also rising rapidly. For Consumer Electronics, large companies from Japan and APAC dominate the R&D spending chart, while most India centers are currently operating at low intensity.

 

For Telecom, North America and Europe dominate the R&D spending, while as for India, some of the R&D centers here have become global R&D hubs in just a short period of time. Similarly, North America and Europe dominate the Aerospace and Defense vertical while most India centers were started in the last few years and more are expected to enter this space soon. For Automotive vertical, Japan and Europe undoubtedly dominate the R&D spending most of the R&D centers in India in this vertical have also started recently and are well positioned for growth.

 

Last but not the least, the study read that anecdotal information shows that the top global R&D spenders across various verticals are making large investments in China. And added that India is lagging behind China on several parameters which decide the attractiveness of a country as an offshore R&D services destination.

 

About Zinnov Management Consulting Pvt. Ltd

 

Founded in 2002, Zinnov - meaning Zeal in Innovation - is a leading management consulting company providing services in the area of Offshore Advisory, Market Expansion and Human Capital Optimization to Fortune 1000 companies. Zinnov works collectively with clients to tackle prevailing organizational challenges by analyzing the changing dynamics, improving performance, and building institutional capability. The services delivered to its clients through advanced reasoning and analytical techniques, provides solutions that help in integrating organizational vision, business definition and processes.

 

Visit http://www.zinnov.com for more details and information.

 

Source:

http://www.1888pressrelease.com/for-the-first-time-in-six-years-global-r-d-spending-decreas-pr-274392.html







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