Pune, Hyderabad, Bangalore Dominate Engineering R&D Space 

Pune, Hyderabad, Bangalore Dominate Engineering R&D Space

Pune, Hyderabad, Bangalore Dominate Engineering R&D Space

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These cities contribute 64% of talent in the engineering research and development sectors.

15 June 2024

By Khushi Maheshwari 

Pune, Bengaluru and Hyderabad have drawn talent in the engineering research and development (ER&D) field over the years, thanks to a decent number of engineering universities and a sizable presence of IT businesses. This is encouraging for the local talent because the industry is rapidly expanding in India. 

Due to their strong industrial and manufacturing sectors, these cities have emerged as a top option for organisations offering ER&D services. This is because ER&D requires not only IT capabilities but also a deep domain understanding of particular industries.

According to data from HR firm Teamlease Digital, these three cities combined have captured close to 64% share of talent in the sector, followed by Delhi NCR, Chennai and Mumbai. The most in-demand job profiles right now are those in computer science and automation, which are followed by big data, analytics, IoT (internet of things), robots and machine learning.

Although recruiting in the core IT services sector has slowed down, global capability centres (GCCs) and ER&D businesses are still hiring, but not at a high rate. In addition to technology abilities, people desire subject expertise. Pune is home to many automakers, therefore applicants with both IT prowess and industry knowledge are highly sought after. The combination of two domain knowledge is why they are willing to pay more, according to Teamlease Digital CEO Neeti Sharma. 

But the majority of businesses are required to provide a minimum of training, which might last up to six months. Thus, hiring freshmen and preparing them for the workforce is the standard approach. Because the company operates in a fairly specialist market, there are lower attrition percentages in this area as the company functions in very niche areas, as per industry experts. 

For example, managing director Kishor Patil stated in a recent analyst call that city-based KPIT Technologies will be able to acquire top talent because very few companies are hiring from campuses right now this year. Furthermore, the organisation is able to sustain single-digit turnover rates, which contrasts with greater rates observed by conventional IT organisations. 

According to a previous report by JP Morgan, the distinction between IT and ER&D is that the former is focused on future products that are expected to hit the market in a few years, so the current weak macroeconomic environment may not affect those spending decisions. In contrast, IT is concerned with faster return on investment (ROI), which leads to the postponement of discretionary digital projects.

There are not many huge enterprises in the area and a scattering of relatively small businesses with as few as 50–100 employees. The evolution of this sector has, likewise, taken twenty years. Ketan Bakshi, the chairman and founder of Neilsoft, stated that while Pune can rightly be called the engineering valley, Bengaluru and Hyderabad have significant engineering talent which is tapped into by companies such as L&T Technology Services and Cyient.

Training is an ongoing process, even for Tata Technologies, a significant player in ER&D. The company reported in its annual report that it advanced the skills of 1,000 engineers and developed learning paths and training programs to guarantee that 10,000 of its engineers are trained in the fundamentals of generative artificial intelligence (AI), with an additional 2,000 engineers receiving intermediate-to-advanced gen AI training over the course of the next 12 months.

Teamlease estimates that the ER&D market in India is worth $25.6 billion, with over 1,400 companies operating there that employ just 70 lakh experts. Comparatively, according to some figures, 5.4 crore people are employed in the IT sector as a whole.