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Global investments in the engineering and research and development (ER&D) sector are likely to grow at a compound annual growth rate (CAGR) of 10% despite the slowdown, Bain & Company forecasts.
Businesses’ global investments in ER&D are set to rise sharply over the next five years, expanding at a CAGR of 10% through 2026 despite uncertain economic conditions currently prevailing in the market, says research released by Bain & Company on Thursday.
A ramped-up pace of industry investment in digital engineering and related capabilities, as businesses accelerate spending on digitization, is central to the strong expected trend in overall investment, it said.
Bain & Company’s findings revealed that the majority of senior executives (over 500 worldwide) surveyed planned to increase ER&D spending despite the current economic turmoil and turmoil. 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, along with the intention to increase outsourcing, is providing an opportunity to ER&D service providers who are delivering services from India,” said India-based partner Sudheer Narayan.
Digital investments are set to register a CAGR of 19% from 2022 to 2026 — nearly double the overall investment growth rate for ER&D spending, shows a Bain survey that drew responses from more than 500 senior executives in worldwide.
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Providers that have invested in talent in high-demand fields such as data engineering, data analytics, artificial intelligence, cybersecurity, IoT, and connectivity will be well placed to capture a larger share of this growing ER&D market, added Mr. Narayan.