Changing and investing in new services and products

Of the respondents indicating plans to change their product range, more than half (56 percent) say they will make significant investments to launch one or more new products into the market; Thirty-nine percent say they will invest to launch one or more new services.

"Whether investing in incremental improvements for existing products or inventing entirely new products and services, what is clear is that manufacturers recognize an urgent need to increase their investment into innovation and R&D. Over the past three years KPMG has been tracking manufacturers' investment intentions. The KPMG data shows that, following a drop in R&D in 2014, investment expectations skyrocketed in 2015 and seem set to continue to grow in 2016," says Gates.

"India is proving itself to be a valuable hub from which to sell to smaller - yet growing - markets in the region, as well as larger - yet less cost effective or less stable - emerging markets. Simply put, manufacturers see India as both a low-cost regional manufacturing center and as a vital customer market. Nearly 62 percent of Indian respondents have confirmed their plans to make significant investments to launch new products, "says Sukumar.

More than one-in-five (21 percent) of all KPMG's GMO survey respondents say they expect to spend more than 10 percent of revenues on R&D over the next two years. Almost half (49 percent) say they will spend 6 percent of revenues or more (in the next two years).

(Continued on the next page)