USD 1.3 trillion
Global Engineering Services Outsourcing Market Size, Share, Growth Analysis, By Service(Designing, Prototyping), By Location Type(Onshore, Offshore), By Industry Vertical(Aerospace, Automotive) - Industry Forecast 2024-2031
Report ID:
SQMIG45B2095 |
Region:
Global |
Published Date: February, 2024
Pages:
165
|
Tables:
93 |
Figures:
76
Global Engineering Services Outsourcing Market Insights
Engineering Services Outsourcing Market size was valued at USD 1.3 trillion in 2019 and is poised to grow from USD 1.62 trillion in 2023 to USD 7.76 trillion by 2031, growing at a CAGR of 24.6% in the forecast period (2024-2031).
The growing collaborations between original equipment manufacturers (OEM) and engineering service providers are indeed one of the factors influencing the adoption of engineering services outsourcing. Engineering services outsourcing market growth is projected to be fueled by the globalization of R & D operations, higher demand for incorporating the latest technology into product offerings, and the growing desire to lower costs and shorten product lifecycles. The market for outsourcing engineering services has been continuously expanding as a result of customers' increased emphasis on outsourcing a variety of services as part of their efforts to reduce costs.
The ESO model was created to provide clients with smart solutions. The embedded engineering solutions in the engineering services outsourcing market has undergone a paradigm shift from basic engineering services to solutions that include automation, analytics, and the internet of things (IoT), among other things. Furthermore, Platform-as-a-Service (PaaS) plans with bundled IT solutions are now possible thanks to technical improvements.
The demand for engineering services has changed dramatically in the market, moving from mechanical and non-core needs to center competencies in place marketplaces. The new strategy for product lifecycle development is centered on where engineering service projects (ESPs) fit into OEM supply chains. As the ESO delivers and develops, ESPs are developing service delivery standards that combine significantly larger engagement portfolios with a licensing system that fosters innovation and quickens both top- and bottom-line growth. The growing digitalization of numerous industries to boost productivity is also having a substantial influence on engineering services outsourcing market growth.
US Engineering Services Outsourcing Market is poised to grow at a sustainable CAGR for the next forecast year.
Market snapshot - 2024-2031
Global Market Size
Largest Segment
Onshore
Fastest Growth
Onshore
Growth Rate
24.6% CAGR
Global Engineering Services Outsourcing Market, 2021-2028 ($ Bn)
Country Share for North America Region- 2021 (%)
Global Engineering Services Outsourcing Market Size By Location Type, 2021-2028 ($ Bn)
Global Engineering Services Outsourcing Market Size By Location Type, 2021-2028 (%)
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Global Engineering Services Outsourcing Market Segmental Analysis
The global engineering services outsourcing market is segmented based on service, location, industry vertical and region. Based on the service, the engineering services outsourcing market is segmented as designing, prototyping, system integration, testing. Based on location, the engineering services outsourcing market is segmented as onshore and offshore. Based on industry vertical, the engineering services outsourcing market is segmented as aerospace, automotive, construction, consumer electronics, semiconductor, others. Based on region, the engineering services outsourcing market is categorized into North America, Europe, Asia-Pacific, and MEA.
Engineering Services Outsourcing Market Analysis by service
In 2021, the testing portion earned roughly 31% of the total engineering services outsourcing market share. The rise of the testing component over the past few years has been driven by the requirement to create and remodel product prototypes with higher optimization and error-free processes. For the purpose of ensuring user-friendliness and error-free software, OEMs are specifically collaborating with ESPs for help with software testing. Additionally, the growing need for testing services to be outsourced in order to facilitate manual intervention and turnaround time is projected to support the growth of the testing segment.
Designing is predicted to experience the quickest development, with a CAGR of about 27% during the forecast period. As designs get more complex, there will be a greater need to outsource design work to a skilled but relatively inexpensive labour in order to cut expenses. Over the projection period, it is expected that the growing popularity of industrial, visual, and architectural designing for next-generation logistics solutions and tools will spark a demand for innovation engineering.
Engineering Services Outsourcing Market Analysis by location
The on-shore segment, which generated the highest revenue share of about 57% in 2021, is projected to dominate the engineering services outsourcing market from 2022 to 2028. Language and cultural barriers, time zone barriers, political and geographical limitations, and others are some of the barriers that encourage OEMs to choose to outsource on-shore engineering services. On-shore outsourcing greatly reduces linguistic barriers and helps OEMs and service providers communicate better, which further improves the delivery of goods and services.
Due to high mix rates, foreign inflation rates, training expenses, and a growing preference for outsourcing to domestic partners, it is projected that the off-shore portion will develop more slowly than the on-shore portion. Additionally, in order to serve customers who are located in other countries, ESPs must agree to a number of principles in outsourcing contracts. The category growth can be accelerated by the availability of low-cost resources and the readily available availability of a skilled labour pool in nations like China, India, Malaysia, and Mexico.
Global Engineering Services Outsourcing Market By Location Type, 2021 (%), 2023 (%)
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Global Engineering Services Outsourcing Market Regional Insights
With a revenue share of over 41% in 2021, the Asia Pacific region is expected to experience significant growth between 2022 and 2028. Industrial items are manufactured in the region, and highly skilled engineering professionals provide cost-effective employment support. Additionally, the region serves as the hub of major software outsourcing service providers. The expansion of the Asia Pacific regional market is projected to be driven by the escalating need for technological advancement and the pervasive integration of embedded software into the existing models.
South America is predicted to increase at the highest rate throughout the projection period, with a CAGR of more than 29%. The region has become one of the many tops off-shore outsourcing locations for American manufacturers and suppliers. As a result, a number of significant corporations are striving to establish a presence in South America. The consistent wage rise attained in other off-shore locales is a significant driver boosting the local market in South America. Additionally, the extremely thorough paperwork required for outsourcing operations in the region serves as a benefit, making it an appealing market for both sides.
Global Engineering Services Outsourcing Market By Geography, 2021-2028, 2024-2031
- Largest
- Fastest
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Global Engineering Services Outsourcing Market Dynamics
Engineering Services Outsourcing Market Driver
- Technological advancements
Engineering services outsourcing has emerged in order to offer customers or end users cutting-edge solutions. As a result, embedded engineering solutions like the internet of things have replaced core engineering services in the market for outsourcing engineering services. Similar to this, technical developments have made it possible for products as a service to be created that are built with integrated information technology solutions capable of planning maintenance and foreseeing problems in advance. As a result, during the forecast period, technological improvements are offering profitable prospects for the expansion of the engineering services outsourcing market.
Research and development initiatives as well as significant financial investments are needed to create new and inventive technologies and solutions. Leading members of the industry have been forced by the globalisation of research and development to incorporate global delivery systems into their own company strategies. As a result, the engineering services outsourcing market would rise due to the expansion of research and development activities during the projected period.
Engineering Services Outsourcing Market Restraint
- Growing concerns regarding cybersecurity
Digitalization raises concerns regarding cybersecurity. engineering services providers, original equipment manufacturers, and consumers exchange large volumes of information, with end user industries and industry verticals, including information on monitoring, load management, and quality assurance. Similarly, in order to create and design software and solutions, original equipment manufacturers and engineering service providers routinely exchange secret information about technology and equipment. The key market participants are therefore taking precautionary measures as part of their efforts to protect intellectual property, including safeguarding sensitive data with access codes, monitoring network activity, and maintaining original versions of the design and source code.
- High service costs
Small and medium-sized businesses lack the resources to outsource engineering services. Businesses in developing nations lack the resources to outsource company operations. This is due to the high cost of services, which no firm can afford to pay the engineering services outsourcing providers. As a result, the high service prices provide a significant obstacle to the expansion of the engineering services outsourcing market.
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Global Engineering Services Outsourcing Market Competitive Landscape
As the number of nations offering engineering services outsourcing increases, service providers are creating service delivery models with far wider engagement portfolios and an authorization structure that fosters creativity and quickens top line and bottom-line growth. The leading engineering services outsourcing industry players now include worldwide systems of delivery in their business plans as a result of the global R&D operations. In order to build and increase customer commitment and maintain long-term partnerships, ESPs work to meet the needs of their clients and advance their core capabilities. OEM-supplier partnerships streamline work processes, encourage diversification, and cut total costs by integrating business operations and activities.
Engineering Services Outsourcing Market Top Players Company Profiles
- Alten Group
- Capgemini Engineering
- Tata Consultancy Services
- Infosys Limited
- Wipro Limited
- HCL Technologies Limited
- Tech Mahindra Limited
- Accenture plc
- Cognizant Technology Solutions Corporation
- Genpact Limited
- L&T Technology Services Limited
- Cyient Limited
- QuEST Global Services Pte Ltd.
- Mindtree Limited
- GlobalLogic Inc.
- EPAM Systems, Inc.
- Luxoft Holding, Inc.
- Mphasis Limited
- Wipro Limited (Appirio)
- Synechron Inc.
Engineering Services Outsourcing Market Recent Development
- In February 2022, The Adecco Group acquired 59.915 of AKKA Technologies shares from the Ricci Family Group and SWILUX S.A., a wholly owned subsidiary of Compagnie Nationale à Portefeuille SA2, bringing its total holding to 64.72%.
Global Engineering Services Outsourcing Key Market Trends
- One of the main factors propelling the market's expansion is the rise in industrial automation combined with the increasing use of integrated solutions for engineering system analysis and design. The industry is also expanding as a result of the growing use of engineering systems including computer-aided design (CAD), computer-aided engineering (CAE), computer-aided manufacturing (CAM), and electronic design automation (EDA) software. These programmes can be used by the user on smartphones, computers, and tablets and help to increase the overall productivity of the industrial operations. Other growth-promoting aspects include various technical developments and the introduction of digital transformational services. OEMs are integrating robotics, artificial intelligence (AI), and smart manufacturing systems to improve the modelling and detailing of the products, which is also fostering an optimistic outlook for the market.
Global Engineering Services Outsourcing Market SkyQuest Analysis
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our business information services team that collects, collates, co-relates, and analyses the data collected by means of primary exploratory research backed by the robust secondary desk research.
According to our analysis, two significant trends influencing the engineering services outsourcing market are the rising need for automation and the adoption of integrated solutions for analysing and designing engineering systems. The market for outsourcing engineering R&D services is growing as a result of the introduction of cloud-based engineering software products. The market is being restricted by costly licence and maintenance costs as well as a lack of technical know-how in using this software. The growing need for engineering R&D services outsourcing from the shipbuilding, marine, and offshore industries to provide dependable operational platforms to get over physical space limits, severe weather conditions, and remote locations presents a substantial potential for key stakeholders.
| Report Metric | Details |
|---|---|
| Market size value in 2023 | USD 1.3 trillion |
| Market size value in 2031 | USD 7.76 trillion |
| Growth Rate | 24.6% |
| Forecast period | 2024-2031 |
| Forecast Unit (Value) | USD Trillion |
| Segments covered |
|
| Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
| Companies covered |
|
| Customization scope | Free report customization with purchase. Customization includes:-
|
| Historical Year | 2019 |
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Table Of Content
Executive Summary
Market overview
- Exhibit: Executive Summary – Chart on Market Overview
- Exhibit: Executive Summary – Data Table on Market Overview
- Exhibit: Executive Summary – Chart on Global Engineering Services Outsourcing Market Characteristics
- Exhibit: Executive Summary – Chart on Market by Geography
- Exhibit: Executive Summary – Chart on Market Segmentation
- Exhibit: Executive Summary – Chart on Incremental Growth
- Exhibit: Executive Summary – Data Table on Incremental Growth
- Exhibit: Executive Summary – Chart on Vendor Market Positioning
Parent Market Analysis
Market overview
Market size
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- SWOT Analysis
KEY MARKET INSIGHTS
- Technology Analysis
- (Exhibit: Data Table: Name of technology and details)
- Pricing Analysis
- (Exhibit: Data Table: Name of technology and pricing details)
- Supply Chain Analysis
- (Exhibit: Detailed Supply Chain Presentation)
- Value Chain Analysis
- (Exhibit: Detailed Value Chain Presentation)
- Ecosystem Of the Market
- Exhibit: Parent Market Ecosystem Market Analysis
- Exhibit: Market Characteristics of Parent Market
- IP Analysis
- (Exhibit: Data Table: Name of product/technology, patents filed, inventor/company name, acquiring firm)
- Trade Analysis
- (Exhibit: Data Table: Import and Export data details)
- Startup Analysis
- (Exhibit: Data Table: Emerging startups details)
- Raw Material Analysis
- (Exhibit: Data Table: Mapping of key raw materials)
- Innovation Matrix
- (Exhibit: Positioning Matrix: Mapping of new and existing technologies)
- Pipeline product Analysis
- (Exhibit: Data Table: Name of companies and pipeline products, regional mapping)
- Macroeconomic Indicators
COVID IMPACT
- Introduction
- Impact On Economy—scenario Assessment
- Exhibit: Data on GDP - Year-over-year growth 2016-2022 (%)
- Revised Market Size
- Exhibit: Data Table on Global Engineering Services Outsourcing Market size and forecast 2021-2027 ($ million)
- Impact Of COVID On Key Segments
- Exhibit: Data Table on Segment Market size and forecast 2021-2027 ($ million)
- COVID Strategies By Company
- Exhibit: Analysis on key strategies adopted by companies
MARKET DYNAMICS & OUTLOOK
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- Regulatory Landscape
- Exhibit: Data Table on regulation from different region
- SWOT Analysis
- Porters Analysis
- Competitive rivalry
- Exhibit: Competitive rivalry Impact of key factors, 2021
- Threat of substitute products
- Exhibit: Threat of Substitute Products Impact of key factors, 2021
- Bargaining power of buyers
- Exhibit: buyers bargaining power Impact of key factors, 2021
- Threat of new entrants
- Exhibit: Threat of new entrants Impact of key factors, 2021
- Bargaining power of suppliers
- Exhibit: Threat of suppliers bargaining power Impact of key factors, 2021
- Competitive rivalry
- Skyquest special insights on future disruptions
- Political Impact
- Economic impact
- Social Impact
- Technical Impact
- Environmental Impact
- Legal Impact
Market Size by Region
- Chart on Market share by geography 2021-2027 (%)
- Data Table on Market share by geography 2021-2027(%)
- North America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- USA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Canada
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Europe
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Germany
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Spain
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- France
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- UK
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Europe
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Asia Pacific
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- China
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- India
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Japan
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Korea
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Asia Pacific
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Latin America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Brazil
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of South America
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Middle East & Africa (MEA)
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- GCC Countries
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Africa
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of MEA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
KEY COMPANY PROFILES
- Competitive Landscape
- Total number of companies covered
- Exhibit: companies covered in the report, 2021
- Top companies market positioning
- Exhibit: company positioning matrix, 2021
- Top companies market Share
- Exhibit: Pie chart analysis on company market share, 2021(%)
- Total number of companies covered
Methodology
For the Global Engineering Services Outsourcing Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Global Engineering Services Outsourcing Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
Analyst Support
Customization Options
With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Global Engineering Services Outsourcing Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Global Engineering Services Outsourcing Market for additional countries.
Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.
Go to Market Strategy: Find the high-growth channels to invest your marketing efforts and increase your customer base.
Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.
Category Intelligence: Customized intelligence that is relevant to their supply Markets will enable them to make smarter sourcing decisions and improve their category management.
Public Company Transcript Analysis: To improve the investment performance by generating new alpha and making better-informed decisions.
Social Media Listening: To analyze the conversations and trends happening not just around your brand, but around your industry as a whole, and use those insights to make better Marketing decisions.
Global Engineering Services Outsourcing Market Report Snapshots
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