Digital engineering to account for 50-60% of ER&D revenue in India: Report

India has emerged as a leading destination for digital engineering, and its share in the overall ER&D revenue is expected to “grow substantially” from the current 28-30% (as of FY22), according to a joint report published by industry body National Association of Software and Services Companies (Nasscom) and consulting firm Deloitte. The report pegs digital engineering to account for 50-60% in the country’s overall ER&D revenues in the coming years, without revealing any specific timeline. 

In the field of engineering, research and development (ER&D), digital engineering (DE) is gradually displacing traditional engineering as the main force, said the report titled 'the future growth sectors in digital engineering'. 

The availability of key technologies like AI (Artificial Intelligence), cloud technology, blockchain, automation, and Internet of Things (IoT) has transformed businesses. This, in turn, is giving rise to digital strategies for sustainable and smarter ways to operate. The report also said that sectors such as banking, financial services and insurance, healthcare, consumer packaged goods and retail have witnessed a gradual increase in Digital Engineering. 

“Disruptive technologies are currently delivering on their promise to alter these industries and establish them as pillars of the future,” it said. 

“India is advancing into the fourth industrial revolution with optimistic digital transformation revenue amounting to 50-60 per cent in overall ER&D revenues in the coming years,” Nasscom, President, Debjani Ghosh said. 

She said that the country has already established a strong presence in this market due to its growing talent pool, developing environment for partnerships and favourable encouragement towards this industry from government institutions. 

“DE will play a crucial role in government and industry alike, whether it is for planning or decision making, discovering latest trends or new product creation. However, to realise this potential, a balance between growing technical capabilities and the need for domain and business depth, enhancing India’s data protection infrastructure and patent regulations can further alleviate India’s position as a DE offshoring/outsourcing location,” said Keerthi Kumar, Partner, Deloitte India.

Supportive central and state government initiatives such as investments in the country’s technical skill development programs, setting up country-wide centres of excellences (CoEs) and accelerator programs can further contribute significantly to the growth and adoption of this ecosystem, the report noted.

Already, the promotion of the development of tech clusters, such as BioValley and Medivalley for the medical devices manufacturing and testing of new technologies are also proliferating the Digital Engineering landscape in the country, it said.