Key Sectoral Developments Driving Engineering R&D Spend
Published on : Monday 01-04-2024
The ER&D sector is also the fastest growing amongst all other sectors and it is only going to accelerate in the future as well, says Vandhna Babu.
Globally, ER&D spending has accelerated post pandemic to witness a growth of 7-8% CAGR. ER&D organisations improved investments to bridge the gap between evolving market demands and offerings. Proliferation of new technologies such as Gen AI, as well as omnipresence of digital engineering across all sectors served as a catalyst for increased investments and growth.
As per Nasscom-BCG “Seizing the ER&D Advantage – Frontiers for 2030” report, global ER&D spend is expected to grow from the current $1.8 trillion to $3.3 trillion in 2030. Developments within various sectors are expected to drive this growth.
1. Aerospace and Defence – Focus on shifting to more fuel-efficient aircrafts, tackling concerns of cybersecurity and increased use of automation, leveraging additive manufacturing and proliferation of urban air mobility is expected to drive growth in this sector.
2. Automotive – Expected to be among the top growth driving sectors in ER&D, under automotive adoption of electric powertrains, increasing role of software through SDVs, connected cars, in-car technologies and autonomous driving are expected to drive growth.
3. Consumer Electronics – Growth in this sector is expected to be driven by use of quantum computing for faster market launch, foldable and flexible display
tech, connected tech including smarter devices and homes and use of sustainable electronics.
4. Energy, Utilities and Oil & Gas – The net-zero transition in this sector with low-emission technology and digitisation are expected to drive growth.
5. Healthcare & Medical Devices – Increasing use of AI-enabled treatment and discovery, precision medicine and robotic aid and consumer-driven digital health (wearables, etc.), are expected to drive growth in this sector.
6. Industrials including construction – Use of automation and robotics, Platformisation is expected to increase and drive growth.
7. Semiconductors – Innovation in advanced packaging and chip stacking, use of AI, design customisation to meet specific needs are expected to be growth drivers.
8. Software – The transition from platform to super platforms, integration of advanced AI/ML into enterprise software suite, continued focus on cybersecurity are some of the growth drivers.
9. Telecommunication – Achieving hyperconnectivity, implementing Open Digital Architecture (ODA) & Virtualisation, evolving into a ‘Telco to Techco’ operating model and a pervasive 5G & 6G development is expected to be the key growth drivers.
The ER&D sector is also the fastest growing amongst all other sectors and it is only going to accelerate in the future as well.
Article Courtesy: NASSCOM Community – an open knowledge sharing platform for the Indian technology industry: https://community.nasscom.in/communities/engineering-research-design/key-sectoral-developments-driving-engineering-rd-spend
Vandhna Babu is Principal Analyst – Research at NASSCOM. Her areas of interest include ER&D, Engineering, Digital, Automotive, Aerospace and Defence, 5G, Cloud, GCC, etc.
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