india, zoom, volkswagen, er&d, bmw, mnc

Bengaluru: Global capability centres (GCC) are expected to employ 2 million people in India by 2025, up from the current 1.3 million, a new report on the GCC landscape by Nasscom and Zinnov said. GCCs are the technology centres of foreign companies in India. They used to be called captive centres, but many in the industry now prefer the term GCCs, given the growing maturity of these centres and the greater autonomy they now enjoy.
The GCC market size is expected to nearly double to $60 billion, from $35 billion, in the same period, and the number of GCCs is expected to grow to 2,000, from the current 1,430. The next wave of GCCs would be led by tech unicorns, SaaS and healthcare companies expanding their footprint to India, the report said. India has emerged as a critical cog in the global technology narrative. GCCs in India are spearheading digital transformation charters for their parent organisations with a digitally-skilled tech talent pool.
Most GCCs incepted before 2004 in India were established as mere support centres but now have moved up the maturity curve. From being an outpost, they have emerged as transformation hubs, with the ownership of product roadmaps and technical leadership roles operating out of India. Pari Natarajan, co-founder and CEO of Zinnov, said there has been a spurt in GCCs across the country due to digital transformation needs, and India being a hotbed for talent. "While there is a temporary glitch in the demand and supply of talent, things will become better in the next few months," he said.
Natarajan noted that one sector where the next GCCs can come up is in healthcare. Hospital chains and insurers are setting up such centres here. "The next could be from medical devices, medical technology companies, global unicorns and SaaS companies. We will also see industrial companies in the picture, especially from Europe. Companies like Volkswagen and BMW have their technology shops here, but not their design engineering shops yet,” he said. He said the emerging model of technology -- the intersection of 5G, data, cloud, embedded systems -- will usher in the new wave of GCCs.
KS Viswanathan, VP of industry initiatives at Nasscom, said only 15% of the Fortune 2,000 companies have a footprint in India, and only around 25% of Fortune 500 companies have a GCC in India. But all of them are now augmenting their digital capacity and fool-proofing their digital architecture. “This decade, which is also being referred to as tecade (technology driven decade), will also see investment from middle America companies, not just the West Coast and East Coast ones," he said.
Viswanathan said there have been three cycles in GCC growth. "The first is the traditional companies that came in the 1980s and the 1990s. The next was between 2005 and 2015, which was driven by e-commerce, retail and healthcare. Since 2015, GCCs have become a mainstay of all businesses. While the first 1,400 GCCs took more than 20 years, the next 1,400 can come up in the next 10 years," he said.
In recent years, companies like Zoom, Slack, PepsiCo, Tesla, GitHub, and Apptio have established GCCs in India. Engineering R&D is leading the growth story of GCCs in India with a 55% market share. This is driven by digital technology creating new sources of revenue. India’s ER&D GCC talent pool grew at over 11% CAGR between FY2015 and FY2021. AI/ML centres of excellence (CoEs) have been set up by GCCs at every stage of maturity, indicating that India has successfully established itself as a frontrunner in AI/ML.
Asked about the talent war, Natarajan said attrition in the GCCs have gone up to 17% from 11%. The centres, he said, have undertaken campus programmes, return-to-work initiatives for women, and reskilling to bridge the talent gap.

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