Engineering Research and Development (ER&D) Outsourcing Market Report 2026

The engineering research and development (er&d) outsourcing market size has grown exponentially in recent years. It will grow from $665.27 billion in 2025 to $830.55 billion in 2026 at a compound annual growth rate (CAGR) of 24.8%. The growth in the historic period can be attributed to increasing complexity of product design requirements, expansion of global manufacturing footprints, rising cost pressures on in-house r&d teams, growth of embedded systems development, widespread adoption of outsourcing models.

The engineering research and development (er&d) outsourcing market size is expected to see exponential growth in the next few years. It will grow to $2026.43 billion in 2030 at a compound annual growth rate (CAGR) of 25%. The growth in the forecast period can be attributed to increasing demand for ai-enabled engineering solutions, rising adoption of digital twins and simulation tools, expansion of connected product ecosystems, growing need for rapid innovation cycles, increased focus on scalable engineering partnerships. Major trends in the forecast period include increasing outsourcing of advanced engineering functions, rising demand for embedded and software engineering services, growing adoption of offshore r&d models, expansion of multidisciplinary engineering programs, enhanced focus on time-to-market optimization.

The growing demand for outsourcing is expected to drive the expansion of the engineering research and development (ER&D) outsourcing market in the coming years. Outsourcing involves contracting research projects to specialized development companies that employ skilled engineers and leverage advanced technologies, creating profitable outsourcing partnerships. Outsourcing engineering services enables businesses to lower costs by reducing expenses related to additional office space, labor, infrastructure, and operations. For example, in June 2025, according to the Organisation for Economic Co-operation and Development (OECD), a France-based international organization where governments of market economies collaborate to promote economic growth, prosperity, and sustainable development, governments in developed countries spent an average of 9.2% of GDP on outsourced expenditures in 2023. Therefore, the rising demand for outsourcing is contributing to the growth of the ER&D outsourcing market.

Major companies in this market are concentrating on expanding their facilities to drive the development of the mining sector and meet market demand. Facility expansion involves the process of increasing the capacity or capabilities of an existing facility. As an illustration, in May 2023, Applied Materials Inc., a US-based provider of engineering solutions, announced a facility expansion for collaborative research and development (R&D) in semiconductor process technology and manufacturing equipment. The extensive facility, backed by a multibillion-dollar investment, is strategically designed to provide a unique combination of capabilities within the industry. Covering over 180,000 square feet of cutting-edge cleanroom space - equivalent to more than three American football fields - it is dedicated to collaborative innovation with chipmakers, universities, and ecosystem partners. Purpose-built to accelerate the introduction of new manufacturing advancements, the EPIC Center is expected to significantly reduce the industry's timeline for transitioning technologies from concept to commercialization. This approach enhances the success rate of new innovations and maximizes the return on R&D investments across the semiconductor ecosystem.

In April 2024, Infosys Limited, an India-based provider of digital transformation services, engineering research and development (ER&D) outsourcing, IT consulting, and technology solutions, acquired in-tech GmbH for an undisclosed amount. Through this acquisition, Infosys aims to expand its ER&D presence across Europe, strengthen its capabilities in automotive, rail, and smart-industry engineering, and enhance its capacity to deliver integrated digital-engineering solutions to global industrial clients. in-tech GmbH is a Germany-based provider of engineering R&D services, offering system design, electronics and software development, hardware and software validation, and consulting solutions for e-mobility, autonomous driving, rail transport, and industrial automation markets.

Major companies operating in the engineering research and development (ER&D) outsourcing market include Accenture plc, International Business Machines Corporation, Tata Consultancy Services Limited, Capgemini SE, Cognizant Technology Solutions Corporation, DXC Technology Company, Harman International Industries, Wipro LTD., Tech Mahindra Limited, EPAM Systems lnc., Alten Group, HCL Technologies Limited, Altran Technologies SA, Horiba Ltd., Akka Technologies Group, Mindtree Limited, Bertrandt AG, L&T Technology Services Limited, GlobalLogic Inc., IAV Gmbh, Cyient Limited, Tata Technologies Limited, Assystem, Kistler Group, KPIT Technologies Limited, FEV Europe GmbH, Infosys Limited, QuEST Global Services Pte. Ltd., Luxoft lnc., Wabtec Corporation, Siemens AG, Robert Bosch GmbH, ABB Ltd., Honeywell International Inc., NEC Corporation

Asia-Pacific was the largest region in the engineering research and development outsourcing market in 2025. The regions covered in the engineering research and development (er&d) outsourcing market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the engineering research and development (er&d) outsourcing market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The engineering research and development (ER&D) outsourcing market includes revenues earned by entities by providing outsourcing services such as service outsourcing, equipment outsourcing. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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