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Talent - A key parameter while selecting a location for setting up an Engineering R&D centre
Talent - A key parameter while selecting a location for setting up an Engineering R&D centre

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This blog is second in the series of blogs on NASSCOM – KPMG Engineering R&D Global Location Analysis report

For any Engineering R&D enterprise, setting up a new physical facility is always a daunting task, as it has to take many aspects and parameters into account. An appropriate location has the potential to reform the profitability of a business and enhance its market position. There are many parameters which are evaluated while choosing the most suitable location, availability of relevant talent is one of the most important parameters.

Talent continues to remain one of the top considerations while choosing an ER&D location for an enterprise. In the NASSCOM-KPMG Engineering R&D Global Location Analysis study, we further analysed and broke down the talent parameter and delved deep into the other considerations within the talent parameter which companies look into. These include –

  1. Proximity of the location to the relevant talent including
    • number of graduates / STEM graduates, research workforce etc.
    • availability of experienced and skilled workforce near the location
  2. The competitiveness and quality of the available talent including ease of finding skilled employees, ability to scale up, overall competitiveness score

To find the relevant and skilled talent, with an ability to scale up fast, many ER&D enterprises often partner with local universities for training, internship opportunities.

 

Location 5

 

In the report, for ER&D enterprises across the world, Asia Pacific remains an attractive destination, primarily due to the availability of a large pool of skilled workforce, making it easy for organizations to scale up. In particular, India ranks highest compared to other due to the availability of highest workforce and STEM talent, along with presence of a significant number of R&D personnel. India also performs better than other APAC countries in talent competitiveness due to the relative ease of finding skilled employees.

Not only is it important to find the relevant skilled talent with relative ease, but it is also pertinent that the relevant talent is available at a competitive cost to make it lucrative for the companies to consider setting up their ER&D competency centre. In fact, out of all the four major considerations for setting up an ER&D company in a location, in the report, talent availability and cost attractiveness account for nearly two-thirds of the total weightage in the overall location assessment exercise.

While assessing the availability and quality of relevant talent against the cost attractiveness, India emerges a winner due to the availability of large engineering talent pool available at a significant cost advantage when compared to other countries. There are many countries in the Asia Pacific, which offer a cost advantage, but the availability of relevant engineering and STEM talent at a large scale is not available. Similarly, in North America or Europe, although the relevant scalable STEM talent is available, but does not offer cost advantage like India.

While there are many parameters to be assessed while choosing a location for setting up an ER&D enterprise, it is worth noting that perhaps everything starts with the availability of the right talent. Many a time, the ability to scale up fast enables a company to turn profitable before its competitors, and this can only be possible when the relevant, skilled, cost competitive workforce is available.

 

Read more about this in the report “Engineering Research and Development – Global Location Analysis” from the links below –

NASSCOM Website – https://nasscom.in/knowledge-center/publications/engineering-research-and-development-global-location-analysis

NASSCOM Community - https://community.nasscom.in/communities/engineering-research-design/engineering-research-and-development-global-location

 


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Vandhna Babu
Principal Analyst - Research

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