Nearshore Americas

Even R&D Is Being Outsourced to Offset Talent Crunch

About 60% of corporate houses around the world are likely to outsource their engineering R&D activities over the next three years as talent shortages threaten to make them fall behind in the race for innovation.

Outsourcing is the only viable option left for large and research-dependent corporations, according to the latest survey of 500 senior engineering executives by research firm Bain & Company.

One of the most surprising findings of the report is the fact that companies are giving thought to outsourcing not to save money, but rather to gain access to talent.

The Y2K bug gave IT outsourcing one of its first pushes in the early 2000s. Now, the need for innovation and survival in an increasingly competitive market is fueling offshoring.

Engineering services being outsourced range from basic research to designing products and developing plans for state-of-the-art manufacturing facilities.

Until recently, companies outsourced only trivial activities such as testing and compliance. Today, they are outsourcing entire product designs and the creation of critical components such as combustion engines.

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In the survey, more than 80% of respondents said they have a serious shortage of expertise in data analytics, artificial intelligence, cybersecurity, the Internet of Things and data engineering.

The industries that are prioritizing outsourcing include automotive, mobility, medical devices, energy, natural resources and aerospace and defense.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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