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Digital engineering – Growing investment areas and use cases

4 Mins read

Covid has brought many changes across various organizations and sectors. The pandemic has brought drastic changes in the way companies operate and has also accelerated digitalization and digital engineering in a pace much faster than previously envisaged. The impact of digital engineering is pervasive across all industries.  Many companies across various sectors are rapidly adopting digital engineering into their day-to-day processes and are increasing the spend towards the same.

In recent years, there has been an increasing priority in terms of focus as well as investments in digital engineering across various industries and verticals.

There are many areas of investment across various industries, and we can a few of them below.

Digital 1


For an industry like automotive, the scale and maturity of adoption of digital engineering is quite high, with many use cases.

  1. In automotive, Connected Vehicles has become one of the top areas for investment towards digital engineering. Vehicles are constantly evolving and are no longer just vehicles for transportation. They are digital hubs and are constantly connected for real time two-way wireless transfer. The priorities are towards creating hardware, software, and embedded engineering and exploring as a service mobility and software/connectivity/data led revenue streams. The current global ER&D spend towards the same is approximately USD 8-9 billion
  1. In addition, Autonomous Driving is another one of the top investment areas for digital engineering in the automotive sector. Autonomous vehicles are fitted with sensors, GPS trackers, etc. are connected to other vehicles as well as infrastructure and algorithms etc., are another investment area. The priorities are towards enabling the communication of vehicle-to-vehicle and vehicle-to-infrastructure and integration of platforms and software. The current global ER&D spend is approximately USD 3-4 billion.
  1. Another major investment area for digital engineering in automotive is Electrification. EVs are of great interest for companies, who are focusing on sustainability. The priorities are towards finding the right suppliers, setting up infrastructure for manufacturing and charging infrastructure. The current global ER&D spend towards the same is approximately USD 14-16 billion.


Similarly, investment areas for digital engineering also arise in Industry 4.0 domains redefining value chains and acting as a new growth engine.

Digital 2


  1. Industry 4.0 involves digitalizing of manufacturing operations and automation and data exchange in manufacturing technologies and processes and it is one of the top investment areas for digital engineering. The priorities are towards identifying best-suited IoT applications, and towards IP protection and cyber-attacks. The current global ER&D spend is USD 7-8 billion.
  1. Another investment area is Product-as-a-Service, which is a business model that allows a customer to pay for a desired result rather than purchasing the equipment that delivers the result. The priorities are towards redesigning products to integrate IoT sensors and connectivity components. The current global ER&D spend for the same is USD 3-4 billion.
  1. Additive manufacturing is another key investment area for digital engineering, where it is redefining digital manufacturing by radically simplifying the production of complex parts, while simultaneously enhancing their functional performance. The priorities are towards encouraging design teams to incorporate additive manufacturing more and more into the process and explore partnerships with research institutes, start-ups, machinery providers, and service providers to accelerate adoption. The current global ER&D spend is USD 3-4 billion.

Post pandemic, healthcare and heath-tech are sought after by the companies and governments, and they are investing more and more to improve all aspects of the healthcare systems. Digital advancements are driving innovation in varied areas of healthcare industry and a robust framework will be required to assure a transformational shift from legacy.

There are many avenues where continuous investments and digital advancements are taking place.

Digital 3


  1. Connected health ecosystems is one area where continuous advancements are being undertaken, with the advent of smart and connected medical devices, to assist in continuous patient monitoring and enabling timely interventions, leading to adoption of connected health ecosystems. The key priority would be towards assessing therapy areas for continuous monitoring in a remote setting using smart and connected medical devices as well as incorporating patient needs and insights from monitoring and engagement to product life cycles. The current global ER&D spend is USD 2-3 billion.
  1. Digital platforms and technologies can help streamline and accelerate every process in the healthcare and life sciences value chains. The key priorities include identifying platforms, product vendors and capabilities for large scale implementation. The current ER&D global spend is around USD 1-2 billion.
  1. Digital therapeutics are another area in health-tech which is rapidly gaining traction and are used to deliver data-/evidence-based therapeutic interventions to prevent or treat medical conditions. The key priorities here are planning aspects around data management and standardization and identifying patient cohorts, conducting trials, and measuring outcomes; comparing results with patients on traditional treatments and developing an associated value proposition. The current global ER&D spend is USD 0.6-0.8 billion.


Digital engineering is fast becoming a prime priority among the enterprises across the world, and more so post the Covid pandemic, with a significant portion of global ER&D spending going into creation of smart, connected, and intelligent products. Digital engineering is the way to produce continuous chain of innovation and competitive positioning that evolves with customer, market, and technical opportunities and the companies are leaving no stone unturned to make themselves future ready and insulated against any future exigencies.


To read more about Digital Engineering, download our report “Digital Engineering – An opportunity unparalleled” from the links below

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