India emerges as the #1 destination for the outsourcing of R and D projects

With Indian talent being recognized the world over, outsourcing of Research and Development (R and D), is steadily on the rise. It has been estimated that the R and D outsourcing industry will increase by 23% by the year 2012. In fact, Bangalore is said to be in second place when compared to Silicon Valley, since 130,000 engineers are currently being employed in software research and development.

According to the study by the management consulting firm Zinnov, the number of outsourced R and D centers in India has increased from 180 in 2000 to 594 in the past year. The reason being attributed to this is that, in spite of the rising costs of outsourcing, India still remains a lot cheaper than the US. The total cost of employing a fulltime Indian engineer including wages and benefits, facilities, telecom, travel and administrative support ranges from USD 35,000 to USD 55,000. This works out to be three times lesser when compared to employing an engineer in the US.

Another vital reason that cannot be overlooked is the growing quality and experience of India’s huge technical workforce. Apart from the highly trained and experienced Indian workforce, there has been a steady influx of returnees from the U.S., Britain and Australia, many of whom have held years of managerial and R and D experience at Western corporations.

According to Zinnov’s statistics, about two thirds of Bangalore’s 80,500 engineers working in foreign owned R and D centers have four to seven years of experience and the remaining one third have worked seven to fifteen years, enough to qualify as the lead architect for many products.

With a talented and experienced workforce available at nearly one third the cost, Indian R and D centers have emerged as the number one destination for clients from all over the world.