In terms of geographical choices, many countries like Brazil, Indonesia, Romania, and few south Asian countries offer a different choice of design destinations. While the options are plenty with various pros and cons for each choice, India seems to be overcoming most cons and ‘not just inching’ but leaping ahead in its ability to be a design leader. As far as Indian companies are concerned, the term ‘Outsourcing Services Provider’ has evolved to a ‘Design Partner’.
It all started with the companies from the west (which dominated the global product markets and continue to do so). The need to be competitive required them to be cost competitive. India offered the technical know-how, on the platter of English language at relatively lower costs. This was the platform on which the Indian IT services market grew. India was reactive to the demand and with aplomb lapped up the opportunity to launch itself in the ‘knowledge business’ sector.
The continuous meeting of the demand created a skilled workforce that has now moved up the value chain and is taking responsibilities of designing key components/modules and complete products. Indian engineers are now proactive and are claiming design work based on merit and not just on cost.
After excelling in providing services, which helped other companies to design high quality products, Indian engineers are now creating complete products and designing quite a few more. India's total design market is expected to reach $7.37 billion by the end of 2008, according to a report produced jointly by the India Semiconductor Association (ISA) and IDC India Ltd. The sector is expected to grow to $10.96 billion by 2010. About 130,000 professionals were employed in the design market as of 2007, 82% of whom were working in embedded design, 11% in VLSI designs, and 7% hardware/board designs.
It is estimated that by 2015, the Indian design market will grow 10 times the size it is today. India's Ministry of Commerce and Industry aims to increase the market value of the design industry to 1% of the nation's Gross Domestic Product (GDP) during the next five years.
There are a few factors, which are contributing to this shift, or rather evolution, for India to be recognized as a key contributor in the design area:
· Understanding of end customers
Having been part of the engineering ecosystem for better part of two decades, a good number of Indian Engineers have been exposed to end customers and discussions with business teams that formulate product specifications. This has given them the insight, helping them include the business outlook into their designs
· Thought leadership in core areas in technology
A growing number of engineers have been repetitively exposed to the technology, specific to few domains and carry a significant exposure to such technologies. This often helps in providing a thought leadership in these technologies, which are helping solve critical business problems
· Process awareness
India has the maximum number of IT companies with various process certifications and even beyond this, exposure to working with process stringent companies has made Indian engineers evolve their own best practices.
· Appreciation of IP, Confidentiality and Security aspects
Product companies are not wary of sharing their business ideas with Indian design houses to obtain the value that the Indian company brings. The trust and confidence that Indian companies enjoy from multinationals is evident.
· Growth of the ecosystem
This is more contextual for hardware designs (complete products, board designs, etc.) which calls for the existence of an ecosystem for various activities that go on to create a working physical product. With the growth of the design industry, the ecosystem - be it for plastic molding, rapid proto types, component vendors, embedded design houses, and test and certification providers - has grown and some very high end, complex products needing multimillion piece productions are being designed in the country.
· Value for money
While the costs of providing services from India are rising, the ability of Indian companies to meet higher expectations is balancing it off and in totality there is still a good ‘value for money’ advantage that the country offers.
· Government support
Designing in ICT and the IT industry as a whole enjoys a special status in India with significant encouragement from the government by way of tax-breaks and other benefits. This creates an encouraging platform for design companies to operate in. The growth in the proportion of national GDP, revenue from the Indian technology sector has been significant, i.e. from 1.2% in FY1998 to an estimated 5.5% in FY2008.
All these factors on the base line of Indian companies sitting on a near endless source of raw talent, specially English speaking talent, resource availability, maturing mindset, and the cultural background of innovation and services gives India that natural advantage, which many countries are striving hard to achieve.
Corroborating the facts put forward are cases such as Intel announcing its new Xeon 7400 processor as ‘designed in India’, TI establishing its second design center some time back, and other large companies like IBM Microelectronics, AMD, HP, GE, Cisco, etc. strengthening their product design teams in India centers.
This is important because it indicates the further possibilities that the next wave of electronic product design has in store for India. Put into context, as a proportion of national GDP, revenue from the Indian technology sector has grown from 1.2% in FY1998 to an estimated 5.5% in FY2008.
To summarize, it would be apt to say that the whole product design landscape in India is going through a very stimulating phase, which large companies find it exciting to invest in.
You can reach Neel Sinha at neel_sinha@procsys.com
