Global consulting heavyweight Booz Allen Hamilton will come out by April this year, with a detailed study report on the rapidly emerging engineering services sector in India.

"We are focusing on automotive, aerospace, utilities, construction and hi-tech telecom sectors as part of the study," Vikas Sehgal, principal, Booz Allen Hamilton, said. The agency has been engaged by Nasscom for doing the study.

According to Sehgal, the prevailing global spend on engineering services was estimated in the range of $600 billion to $700 billion and the same was expected to grow more considering that it's a knowledge-based industry.

Citing the Booz Allen Hamilton projections, he said that India was expected to be among the world's top five markets by 2020 and the country had a good potential for engineering services in the fields of automotives as well as aerospace.

"The last 15 years in particular has seen the country develop into one of the biggest automotive markets," Sehgal pointed out.

At a session during the ongoing Nasscom 2006 summit, here on Wednesday, heavyweights from automotives, IT and engineering services deliberated on whether engineering services in India had the capability to move away .from the traditional CAD/CAM or product lifecycle management image, to emerge as an independent sector parallel to IT services. The general consensus was that engineering services sector presents a high potential growth but much was needed for exploiting the opportunities.

Estimating the Indian engineering services market to be in the range of $10 billion to $20 billion, Infotech Enterprises founder chairman and MD B.V.R. Mohan Reddy said that the country's strong engineering talent, large manufacturing base and domain expertise in critical engineering services were key drivers to this niche sector.
"Domain knowledge is the differentiating factor," he said and observed that the industry was also dominated by concerns of intellectual property (IP). "If stress is laid on people, processes, technology tools and training, things would go smoothly for the emerging sector," Reddy said.

Founder and MD of Neilsoft, Ketan Bakshi observed that the level of investment going into establishing an engineering service practice was quite different from mainstream IT service and that makes harnessing the opportunity for engineering services a big challenge. "Much depends on how we address issues of upgrading educational infrastructure and what kind of joint initiatives comes from Nasscom and the industry," Bakshi said.
Executive vice-president of Avendus, Kaushal Aggarwal said that knowing how broad the canvas for engineering design was, remained crucial to the sector's growth.

Booz Allen Hamilton partner and capital senior advisor Steven A. Torok said that demonstrating ability and capabilities for minimising risk was crucial. "The key will be in process integration," he said.

DaimlerChrysler India MD and CEO Wilfried Aulbur said apart from risk, managing cost escalation and human resource issues would be key challenges and strong local companies were needed for fostering engineering services.

Consultant advisor V. Sumantran observed that India needed large core programmes capable of galvanising a vast population of scientists, engineering and technologists to come together and work on focused areas. This also allows better system integration skills, he added. "India has already made some beginning in this direction," he said, citing projects like Indian space, nuclear and remote sensing programmes. "Yet, we need more such programmes for ensuring apt flow from science to technology," he said.