Manufacturers plan to outsource more R&D

While many manufacturers are comfortable outsourcing non-core parts of their business, most have been reluctant to outsource research and development (R&D). However, according to Outsourcing innovation: A manufacturer’s perspective*, a paper by the Economist Intelligence Unit and sponsored by Siemens PLM Software, this is about to change. In an online survey of 306 senior manufacturing executives conducted for this report, 57% of respondents said they expect to see an increase in the proportion of innovation coming from external partners.

Manufacturing companies pioneered outsourcing—especially in the automotive sector—as a way to cut costs and focus on core competencies. The survey shows that, decades later, these remain the top two motives for outsourcing. The survey also shows, however, that 22% of manufacturers use outsource-providers as a source of innovation—whether that be in product design or in process improvement.