The R&D Ecosystem in India has grown at a phenomenal pace in the last decade. MNCs, Service Providers, Tech Startups and Indian Cos/Establishments are driving this growth. A number of factors have contributed to this, including a dynamic and young tech talent pool, proactive government initiatives etc.

1. 2016
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INDIA MNC R&D TALENT POOL STUDY
EXECUTIVE SUMMARY

2. EXECUTIVE SUMMARY • R&D Talent pool in India is expected to grow at a CAGR of 10.9% from
present 610,000 to 1 Million by 2020
• Increasing focus of MNCs on R&D in India is reflected in the rapid growth
of installed talent
• Initiatives such as ‘Make in India’ and ‘Digital India’ are expected to drive
the R&D talent intensity
• 96% of MNCs are setup in Tier-1 Cities
928
R&D MNCs in India
1165
R&D Centers in India
323,000
MNC R&D Talent Pool in India
06
R&D Hubs in India

3. 3
THE INDIAN R&D
COMMUNITY
610,000
R&D Talent Pool
1,020,000
R&D Talent Pool
IN 2015 BY 2020
MNCs
Service Providers
Tech Startups
India Cos/ Est
323,000
166,000
44,500
76,500
520,000
280,500
109,500
111,000
Tech Startups have raised USD 9
billion in funding in 2015.
India’s current product engineering
services market is valued at USD 20
billion and is expected to grow at a
CAGR of 13.7% over the next 5 years
42% of the Global 500 R&D Spenders
have centers in India
11,500 Tech Startups are expected to
set up centers with over 72,500 R&D
jobs being created
India’s R&D globalization and
services market is expected to reach
USD 38 billion by 2020
By 2020, 49% of the Global 500 R&D
Spenders will have centers in India
R&D Talent Distribution
The R&D Ecosystem in India has
grown at a phenomenal pace in the
last decade. MNCs, Service Providers,
Tech Startups and Indian
Cos/Establishments are driving this
growth. A number of factors have
contributed to this, including a
dynamic and young tech talent pool,
proactive government initiatives etc.
There is an increasing shift in mindsets
across the R&D community, moving
away from cost arbitrage to value
creation.
The Indian R&D Talent pool is expected to grow at a CAGR of 10.9% to 1 Million by 2020
Source: Zinnov Research & Analysis

4. 4
721 776 835 872 913 928 955 988 1033 1085 1139
204
220
244
268
295
323
353
387
424
464
508
2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E
R&D Installed Talent Growth in MNCs in India
1 Software/ Internet 121,650
2 Electrical & Electronics 33,057
3 Telecom & Networking 31,043
4 Automotive 30,757
5 Semiconductors 23,333
Top 5 Verticals with R&D Talent in 2015
1 Bangalore 155,000
2 Pune 40,300
3 NCR 31,000
4 Hyderabad 30,700
5 Chennai 27,900
Top 5 Locations with R&D Talent in 2015
No of MNCs with R&D Centers in India* Headcount is in ‘000s
Key Insights
• 928 MNCs and 1165 R&D centers in
India employ 323,000 R&D
workforce (which is around 55% of
India’s total R&D Installed Talent
Base)
• In 2015, 15 new MNCs entered
India, some of which included
Twitter, Gionee, Mapr, Kellogg’s,
Sealed Air, Cleo etc
• India’s MNC R&D Talent Pool has
been growing at a steady 10%
CAGR even though Service
Providers and Tech Startups are
eating a sizeable chunk from this
pool
• Software/ Internet vertical employs
over 37% of the total MNC R&D
Installed workforce
• Bangalore continues to be the most
preferred R&D destination for MNCs
since almost 50% of the installed
MNC R&D workforce resides in
Bangalore
The increasing focus of MNCs on R&D in India is reflected in the rapid growth of installed talent
Source: Zinnov Research & Analysis

5. 5
Aerospace & Defence
Automotive
Biotechnology
Chemicals & Materials
Diversified
Electrical & Electronics
Energy
Engineering Services
FMCG
Industrial
Media & Entertainment
Medical Devices
Others
Pharmaceuticals
Semiconductors
Software/ Internet
Telecom & Networking
Travel & Transportation
323,000 MNC R&D Talent Pool
928 MNCs With 1165 R&D
Centers
VERTICALS
3,356 13
30,757 62
1,040 07
6,219 39
26,350 11
33,057 90
6,958 18
11,535 21
1,895 22
15,742 57
2,550 09
202,980
04410
4,115 25
23,333 58
121,650 392
31,043 76
04315
The software vertical employs approximately
37% of the total R&D talent.
Telecommunication/ Networking,
Semiconductor & Automotive verticals
employ approximately 10% each of the total
MNC R&D talent pool respectively.
‘Make in India’ and ‘Digital India’ are
expected to drive the R&D talent intensity in
the Automotive, Industrial, Software,
Semiconductor and Engineering Services
verticals.
The requirement for talent in the software
vertical shall continue to increase due to
software eating the world.
India continues to attract Software R&D Offshoring –
A testimony to this is the setting up of 37% of all
R&D centers in the past three years.
The Smart Cities initiative is going to attract
investments that shall drive the setting up of new
R&D centers across verticals.
Larger MNCs are looking at India for strategic
partnerships/ M&A activities with a focus on Indian
startups/ SMEs.
MNCs in IndiaMNC R&D Talent Pool
Initiatives such as ‘Make in India’ and ‘Digital India’ are expected to drive the R&D talent intensity in the
Automotive, Industrial, Software, Semiconductor and Engineering Services verticals
Source: Zinnov Research & Analysis

6. 6
Installed Talent Distribution Across Locations Tier – 1 Cities Talent View
National Capital Region : Increasing pollution levels coupled with higher
operations cost will be a factor of concern for newer MNCs intending to set up
operations in the NCR area
Pune : Pune is becoming a hub for the automotive vertical. Cheaper operations
costs will drive MNCs entering India to choose Pune as a preferred destination
Hyderabad : The Telangana government’s efforts to build a tech capital by
investing in infrastructure and ecosystem is going to result in more R&D centers
being set up
Bangalore : Increasing pollution levels, infrastructure demand-supply gap, along
with the sudden population inflow will act as negative drivers for MNCs entering
the tech capital of India. However, ease of access to R&D talent is going to be the
major driver for Bangalore towards becoming the most preferred destination for
MNCs
Chennai : The recent floods in Chennai will significantly impact investments into
Business Continuity Planning, which will result in re-distribution of talent in MNCs
Others include the following cities: Chandigarh, Jaipur, Ahmedabad, Baroda, Kolkata,
Vishakhapatnam, Mysore, Coimbatore, Kochi, Madurai, Trivandrum
96% of MNCs are set up in Tier-1 Cities with Bangalore and Pune accounting for the highest concentration of R&D
Talent
Source: Zinnov Research & Analysis

7. 7
Installed Talent Distribution Across Locations Tier – 2 Cities Talent View
Tier-2 Cities are able to provide higher cost arbitrage to MNCs in comparison to
Tier -1 Cities
Growth of educational and research institutions in Tier-2 cities is helping in
the growth of the R&D talent pool. Colleges in Tier-2 have started establishing
their own Centers Of Excellence or have partners with MNCs based on focused
technologies
A lower attrition rate is being witnessed in Tier-2 Cities when compared to Tier-1
cities, which is a major driver for MNCs from a talent-retention point of view
Quality infrastructure coupled with lower operations cost has become an
important driver in MNCs’ decision to set up R&D centers in Tier-2 Cities
The startup boom and penetration of IT Service Providers in Tier-2 cities has
helped in upskilling of local talent in these cities
Others include the following cities: Chandigarh, Jaipur, Ahmedabad, Baroda, Kolkata,
Vishakhapatnam, Mysore, Coimbatore, Kochi, Madurai, Trivandrum
Quality infrastructure coupled with lower operations cost has become an important driver in MNCs’ decision to set
up R&D centers in Tier-2 Cities
Source: Zinnov Research & Analysis

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