At an industry summit last year, Gartner rightly described India as a “co-innovator, enabler and optimizer of the design services model”. This is a clear indication that the world sees India as an integral part of its expansion plans, and no longer as an outsourcing destination.
Let us consider the factors that make India an attractive destination for design outsourcing. Availability and scalability of talent is a key strength. India is home to one of the largest pools of engineering and technical talent globally, after the US. Why is scale important? When companies consider expanding their operations, scale and time to market is key. Hence, when resources are needed to accelerate the project, access to these resources is important. An abundance of technical talent in India allow companies to ramp up faster, and this is the greatest advantage.
Cost benefits
Outsourcing definitely offers cost benefits. But it is not the only reason companies are expanding operations in India. To quote an official from the Indian Semiconductor Association (ISA), “Growing numbers of multinationals are opening design centers in the country or are expanding existing ones. Semiconductor companies are considering opening operations in India not to cut engineering costs but to leverage the country's rich intellectual infrastructure.”
India’s design industry has progressed substantially on the design front – the country is emerging as a major design center for systems-on-chips (SoCs). Its capabilities in very large scale integration (VLSI) design and embedded software development could potentially help us capture a larger share of the global market. Today, Indian R&D centers of multinationals and Indian design services companies are moving beyond labor-cost arbitrage to become true contributors to product innovation.
Ecosystem evolution
What is helping their case is the evolution of the electronic design ecosystem. Most of the world’s major original equipment manufacturers (OEMs), integrated device manufacturers (IDMs), electronic manufacturing services firms, design services firms, IP providers and EDA suppliers are present in India. Now, the country is seeing the rise of design startups - first-generation Indian entrepreneurs who have left lucrative jobs in global technology majors are leading this wave.
To add to that, India has favorable laws for intellectual property protection and supportive government policies that encourage investment in the country’s hi-tech sector.
The emerging trend of product innovation in India is the “icing on the cake”. Across sectors, the ecosystem is collaborating locally to create products for the Indian market.
Potential opportunties
Overall, there is huge potential for products designed specifically for India. At the bottom of the pyramid is a huge market opportunity for companies. For example, healthcare: With a population of more than 1 billion, of which many have limited access to healthcare, there is an increasing demand for medical diagnostics. This will likely translate into opportunities in biometrics, blood-pressure monitoring, blood analysis and other remote technologies as well as geriatric telemedicine.
Similarly, the two-wheeler market presents a great opportunity. The latest motorbikes are equipped with microcontrollers, which enable electronic ignition control, cluster and body electronics. Another classic example is the inverter, a product one is likely to find in most Indian middle class households, with power being a scarce resource.
The trend of innovative chip design from India powering futuristic products globally is definitely expected to thrive. The electronics industry in India is excited over the “made-in-India-for-India” opportunity and the benefits it offers. The country is undergoing a gradual but inexorable transition from a software-driven outsourcing model to one increasingly focused towards research and development and eventually evolving as a solution provider.
