October 2022

Mohammad Anas Wahaj | 27 oct 2022

India's large talent pool has exacerbated the growth of Global Capability Centres (GCCs). Currently there are about 1300 of them set up by global corporations. Keerthi Kumar, partner at Deloitte, provides analysis of their evolution and how they are becoming value added research and innovation centres. He says, 'This shift has borne multi-faceted benefits not just for parent organisations but also for India. First, in India's journey towards digitalisation, GCCs have provided a considerable push in skilling and developing a highquality and tech-savvy workforce. Further, the sector has acted as a channel of support for India’s social and environmental objectives. GCCs spend ~US$ 100 million on CSR, of which, 40% is relegated for educational initiatives, and save between 190 and 200K tonnes of GHG emissions through green initiatives. The sector makes a considerable and holistic impact across the economic, human capital, innovation, social, and environmental dimensions of India. Currently, the sector contributes ~US$ 103 billion to India in direct, indirect, and induced output-amounting to ~1 percent of the country’s GDP. Additionally, GCCs also bring forth investment opportunities, with global parent organisations having invested ~US$ 1.5 billion in India, while also directly contributing ~US$ 15 billion to start-up revenue annually.' The main focus is now towards Engineering Research & Development (ER&D). According to the 2022 Global Engineering R&D Pulse Survey by Deloitte and NASSCOM, 85% organisations indicated using a GCC for their ER&D activities. Further, ~75 percent of those were already based in India, while many more are expected to come in. HIGHLIGHTS OF THE SURVEY - The GCC sector generates employment for close to 5.5 million Indians, directly employing 1.2–1.3 million Indians (~25% of the direct employment generated by the Indian IT sector); 85% companies' leadership indicating a positive experience with their India GCCs; 90% surveyed organisations intend to maintain or increase their spend on India GCCs in the immediate future. Half of these organisations intend to increase their spend by more than 10% this year, a higher percentage than the global increase in the R&D budget; There is a growing propensity amongst India GCCs to forge partnerships with start-ups, academia, and Engineering Service Providers (ESPs); Co-creation is thus, quickly emerging as the model of choice with ~70% companies exploring or already being involved with start-ups and ESPs in co-creating; ER&D GCCs in India are likely to drive front-line innovation for their parent organisations and oversee end-to-end product development over the next three years; Upward trend to set in over the next three years in terms of volume of tasks migrated to GCCs in India, making India both a 'volume' and a 'value' creator. To maintain its lead India has to ensure that the talent pool remains competitive and future ready, start-up ecosystem continues to grow and ER&D strengthens. Read on...

DATAQUEST: Engineering innovation: India's opportunity to emerge as the world's engine room
Author: Keerthi Kumar

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