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In a cramped building on the outskirts of Bangalore, 140
Indian engineers are hunched over computer screens on
behalf of Rolls-Royce, the UK company that is one of the
world's top three makers of jet engines.
The engineers are assisted by three UK technology experts
- known as the "greybeards" - who are employed by
Rolls-Royce and who sit in the same Bangalore building to
act as the interface with the company's UK operations,
mainly in Derby.
The India-based team work on improvements to Rolls-Royce's
range of aero-engines, which power many of the world's
aircraft, and they do so at about a third of the cost if
the work is done solely in the UK.
The Indian engineers in the Bangalore centre work for
Quest, a fast-growing US company that has virtually all
its operations in India.
Quest's 850 India-based engineers use computer-assisted
techniques to design new products on behalf of about 30
customers, almost all of them based in the US or western
Europe.
Its operations are related to the established information
technology outsourcing activities of leading Indian
companies such as Infosys, Tata Consultancy Services and
Wipro, all of which have tens of thousands of employees
and operate globally.
However, Quest's activities go further than these
operations and are linked to developing new products -
ranging from parts for gear boxes to new aircraft engines
- using computer-assisted tools.
These tools encompass powerful sets of software. They
assist in visualising in three dimensions the shape of new
products that could be made in the future, plus how to
fabricate them using computer-controlled machine tools and
how they would perform once they are in use.
The computer tools can predict the transfer of heat
through a product such as a refrigerator valve, therefore
helping development engineers come up with ways of
extending the valve's lifetime or assisting in
maintenance.
Quest's business is centred on the idea that India has a
huge stock of engineers who are highly educated, speak
good English, are technically proficient and cost a
quarter of the comparable employment rate of an engineer
based in the US or western Europe.
To pay for one hour of engineering development in India
costs a company $10-$25 (£5-£13), compared with $50-$60 in
the US.
Consequently, India is fast becoming an attractive centre
for many western businesses keen to add a greater
engineering effort to their work on developing new
products - increasingly a big part of their businesses -
or to cut the costs of existing product development.
"India is poised to become a huge provider of engineering
services for the restof the world," said Brad Holtz, chief
executive of Cyon Research, a US consultancy in
computer-aided engineering.
According to industry estimates, the world's manufacturing
companies will spend $850bn this year on product
development, covering work on completely new ideas plus
enhancements to existing items.
Of this, virtually all of the work is likely to be done in
the main industrialised countries with only $25bn of the
effort being conducted in emerging economies such as
India, China, Brazil and the Czech Republic.
India has the largest share of these "low-cost" nations,
accounting for work valued at $3bn.
But by 2020, with the overall figure for product
development spending due to rise to $1,000bn, the share of
the emerging economies is expected to rise to $125bn with
India maintaining its leading position. By 2020 India's
share of the total is expected to be about $30bn.
Among the companies with big operations in India - that
are responsible for a large amount of this product
development - are the India-based offshoots of large
western businesses such as Philips, Siemens and General
Electric.
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