Sunday, January 18, 2009

Boom or Recession - India always a preferred R&D outsourcing destination

I remember the oft quoted statement "A pessimist sees a partially filled glass of milk as half empty; an optimist as half full" when i was reading an article in the Times of India on how India is still a red hot favorite when it comes to R&D outsourcing by corporations across the globe.

India has emerged as the 2nd largest preferred destination for global R&D and innovation with US$12.9 billion of R&D investment being poured into India by 184 top R&D companies globally, a study by Booz Hamilton has revealed. The chief reasons being labor cost arbitrage & dominance of talent pools to undertake complex R&D

Many a time, I joke that recession or no recession companies can never stop outsourcing. Boom times force companies to outsource so that they can get to market faster, tap newer markets with their products/services faster; hence they tap into the abundant talent pool offered by countries like India. Recession times force companies to tighten their purses, get jobs done from countries where the cost arbitrage works to their advantage while the quality is not affected; hence they outsource.

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