The COVID-19 pandemic completely disrupted the way businesses functioned in 2020, with enterprises across verticals and geographies grappling to adopt remote working models and taking drastic measures toward cost-saving and cash flow optimization.
The Engineering R&D (ER&D) world was not spared either, where enterprises resorted to significant ER&D budget cuts and project cancellations amid slow sales, delayed product launches, and disrupted supply chains. On the ER&D outsourcing front, service providers showcased new highs in client commitment as they successfully shifted 90-95% of their engineering talent to remote delivery within weeks. Despite these efforts, outsourcing underwent a significant slowdown for large parts of the year on account of canceled projects and decision-making delays as enterprises moved into a recession mindset.
The global economy is expected to grow by 4% in 2021 as progress on vaccine dissemination and pandemic containment, coupled with fiscal, monetary, and financial sector policies, act as tailwinds to global investments. It is imperative to examine how the ER&D spending and outsourcing will align with the global economic sentiment in 2021. This document presents Everest Group’s views on how ER&D spending and outsourcing will shape up during the year, on the back of various macroeconomic and technological factors.
