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Offshore R&D spending grows, recession or not

Patrick Thibodeau | July 19, 2010
India won't be making iPhone anytime soon, but it may pressure U.S. engineering salaries

Of the total low-cost ER&D offshore market in 2009 of about $38 billion, India's share was 21% -- the largest -- and China had between 18% and 20%, according to the study.

Seghal believes that India will have a deflationary impact on global engineering services that will keep costs from escalating.

The average hourly engineering wage in the U.S. is $41, with the average salary in India at $4 an hour; the report points out in a footnote that the range is from $2 to $11 an hour, depending on experience.

By contrast, the average engineering wage in Russia is $10 an hour, and in China $6 an hour.

According to the Institute of Electrical and Electronics Engineers (IEEE-USA, the 2008 median income for its U.S. members working full time in design and development engineering was $110,330. But the group said the impact of offshoring on salaries is unknown.

The use of offshore for research and development by U.S companies is getting a detailed look at the National Science Foundation, which, in a preliminary report released in May, said U.S. companies spent $330 billion in R&D in 2008, with $234 of it spent in the U.S.

 

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