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Global investment in the engineering and research and development (ER&D) sector is likely to grow at a compound annual growth rate (CAGR) of 10% despite the slowdown, forecasts Bain & Company.
Global investment of enterprises in ER&D was set to grow strongly over the next five years, growing at a 10% CAGR through 2026 despite uncertain economic conditions, said research by Bain & Company on Thursday.
A rapid pace of investment by industry in digital engineering and related capabilities, as businesses accelerate spending on digitization, was central to the strong forecast trend in overall investment.
Bain & Company’s findings revealed that a majority of senior executives (more than 500 globally) plan to increase ER&D spending despite the current economic turmoil and turbulence. Industries still planning to increase such spending include automotive and mobility, aerospace and defense, medical devices, advanced manufacturing and services, energy and natural resources and telecommunications.
“This increase in ER&D spending, with the intention of increasing outsourcing, presents an opportunity for ER&D service providers offering services from India,” said Sudhir Narayan, India-based partner.
Digital investment was set to register a CAGR of 19% from 2022 to 2026 – nearly double the overall investment growth rate for ER&D spending, Bain’s survey gathered responses from more than 500 senior executives globally.
Tech layoffs could fill talent gap at ER&D companies, study suggested.
Mr. Narayan said that providers investing in talent in high-demand skill areas such as data engineering, data analytics, artificial intelligence, cyber security, IoT and connectivity will be well-positioned to capture a larger share of this growing ER&D market.