India's next big job grab: Engineering services

But this time it might not be so easy to offshore

May 29, 2008 (Computerworld) India's tech companies, interested in capitalizing on their success in drawing IT outsourcing business from U.S. and other Western countries, are examining what they need to do to capture a broader range of the engineering services business.

The National Association of Software and Service Companies in Delhi, India's leading IT trade group, commissioned a study by Booz Allen Hamilton Inc., a McLean, Va.-based consulting firm, to examine the country's potential to gain a larger share of the offshore engineering services business, going beyond software engineering to a swath of industries, including automotive, aerospace, utilities, construction and industrial.

The Booz Allen report is almost breathless in describing India's potential to provide engineering services, but it also details two problems the country has to address to make it happen: the quality of its infrastructure, including ports, roads, airports and telecom, and the quality of its education.

"A new window of opportunity is opening now for India," wrote Booz Allen, of the engineering services market.

Worldwide, about $750 billion is spent on engineering services, the report said, and the figure is expected to reach $1 trillion by 2020. Of the amount now spent on engineering services, only $10 billion to $15 billion is done by offshore vendors, with India getting about 12% of that offshored work, according to the report.

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For over 20 years doing engineering for civil infrastructure and petroleum projects. It's been there long enough that we now have fathers and sons (and a few mothers and daughters) at work in the same office.

What's different is that my company (a US-based multinational) hasn't contracted out engineering services to Indian subcontractors but grown the office from the ground up so that there is seamless integration with the other locations where we do a lot of engineering.