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 engineering and R&D spend is pegged in excess of $ 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 ~45% of the global R&D spend led by companies like Amazon, Alphabet, Microsoft, Intel, and MERCK & Co. European headquartered enterprises in comparison were a distant second, accounting for ~29% 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 and internet and automotive verticals.

 

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%. 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, software, and medical verticals. To provide a more comprehensive study, in addition to the landscape overview, Zinnov also conducted an overall ranking of global service players in the product engineering space.