Traditional engineering streams like Mechanical are back in demand, and I’m going to get to the why right away!
It is a well-known fact that, over the last two decades, core engineering graduates have moved into the IT sector. With the downturn and uncertainty in the software industry, demand for engineers has been decreasing. But there’s been an emerging sector – Engineering R&D. This sector has been steadily growing and attracting traditional core engineering disciplines such as:
- Mechanical Engineering
- Electrical Engineering
- Architecture
- Aeronautical Engineering
- Automobile Engineering
Engineering R&D, complemented by the domestic Automotive sector, has given a thrust to the vast engineering talent in India. Engineering R&D is making a global impact by becoming the go-to destination for high-end engineering and research work. It is one of the few areas in which India beats China in terms of attracting foreign investment!
India Story
India has become the world’s second-largest hub for engineering research talent after Western Europe. Most of the world’s largest companies have established their Engineering Centres or Captives, as they are commonly known. The rest who did not are now toeing the line. Engineering Captives were set up for cost-effectiveness and as a pilot option to an offshore service provider. This gradually transitioned to Centres of Excellence, offering innovation and highly in-demand niche skills to support the parent company.
In the digital world, the buzz is around automation, digital transformation, IoT, connectivity, and mobility. These Engineering Captives will play a significant role in building innovative solutions and products. They will help companies stay ahead and unlock new opportunities from existing products.
Big and small companies from across the world and across sectors have invested in setting up Engineering Captives. Sectors like Automotive, Aerospace, Consumer Electronics, Semiconductors, Energy, Utilities, and Telecom have taken the lead. Daimler, General Motors, Renault Nissan, Robert Bosch, Cisco, Boeing, EADS, Samsung, Intel, Schneider, Shell, GE, and Honeywell are already here. There are over 30 core Automotive Engineering R&Ds and over 1000 Captives across sectors. They employ over 300,000 professionals who offer opportunities across engineering streams.
Mechanical Engineering and the Auto Industry
- The global Automotive Engineering market is valued at US$ 265 billion. The Indian Automotive Engineering service providers address only a fraction of this market.
- The auto sector is one of India’s most important contributors to GDP and employment. It accounts for 7% of India’s GDP and 45% of manufacturing GDP and employs about 19 million people directly and indirectly.
- The automotive and automotive component sector has the potential to generate up to $300 billion annually by 2026. It can create 65 million additional jobs, as per the Society of Indian Automobile Manufacturers (SIAM) and the Government of India. It also envisions the industry to grow around four times by FY26.
- Large presence of Global Automotive OEMs, Component Suppliers, and Engineering Captives.
- The Automotive Sector is a clear leader in R&D spending, contributing 18% of the global R&D spend.
- Top Automotive R&D spenders have already set up captives in India.
- According to a new study by consulting firm Zinnov, $31 billion was spent globally on engineering-related R&D. In this, India alone accounted for $12.3 billion.
- 69% of all offshore R&D centers that opened in 2015 were based in India.
- The government’s push to manufacture through the ‘Make in India’ initiative has garnered considerable attention from the industry. This has brought the spotlight back on the manufacturing sector.
- Salaries for entry-level roles are better than in other industries, with excellent growth opportunities. The prospects to interact with global teams, learn new skills, and pursue overseas career opportunities are plenty.
- Automotive regulations are likely to focus on making transport cleaner (electric, hybrid) and safer. This is fuelling the need for more Engineers to innovate.
New Talent Frontier
This could well be the new golden frontier for Indian talent for the next 15 years. It is an opportunity to leverage our traditional manufacturing sector hubs to establish ourselves as a manufacturing destination. This should enable us to enhance our manufacturing capabilities by investing in R&D. It would allow us to meet the demands of the digital age through our high-caliber engineering and software talent.
The 1.5 million engineers India produces every year is enough to meet the demands of the Auto industry. The challenge is in bridging the skill demand that the industry has been complaining about for a long time. However, the arrival and expansion of Engineering Captives is a shot in the arm for engineers graduating from traditional streams.
If you know a student who is confused about which engineering stream to pick, without batting an eyelid, say ‘Mechanical!’
