Engineering Services - Global Outlook

  • ID: 1089922
  • Report
  • Region: Global
  • 215 Pages
  • Global Industry Analysts, Inc
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The global outlook series on Engineering Services provides a collection of statistical anecdotes, market briefs, and concise summaries of research findings. Laced with 26 supporting market data tables, facts, and figures, the report analyzes the impact of globalization and engineering expenditure on the engineering services market. The report also offers a detailed review of the engineering services outsourcing market, analyzing the benefits, drawbacks, growth drivers and challenges associated with the industry.

Regional markets briefly abstracted include the United States, Canada, France, Germany, UK, China, and India, among others. Also included is an indexed, easy-to-refer, fact-finder directory listing the addresses, and contact details of 792 companies worldwide.

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ENGINEERING SERVICES

A GLOBAL OUTLOOK, JANUARY 2012

CONTENTS

1. INDUSTRY OVERVIEW 1
Globalization and Engineering Industry 1
Global Spending on Engineering Services to Witness Nominal yet
Steady Growth 1
Table 1: World Recent Past, Current & Future Analysis for
Engineering Services by Geographic Region - US, Canada,
Europe, Asia-Pacific (Including Japan) and Rest of World
Markets Independently Analyzed with Annual Sales Figures in
US$ Billion for Years 2010 through 2015 2

Table 2: World 5-Year Perspective for Engineering Services by
Geographic Region - Percentage Breakdown of Dollar Sales for
US, Canada, Europe, Asia-Pacific (Including Japan) and Rest
of World Markets for Years 2011 and 2015 3
Share of Outsourcing Still Paltry
Trend to Alter in Years Ahead 3
Table 3: Leading Sectors in the Global Engineering Services
Market (2011): Percentage Share Breakdown of Spending for
High-Tech/Telecom, Automotive, Aerospace, Utilities and
Others 4

Table 4: Geographical Distribution of Global Engineering
Services Expenditure (2011): Percentage Share Breakdown of
Expenditure by High-Cost and Low-Cost Countries 4
Low Cost - No Longer the Sole Criterion for Offshoring 4
Table 5: Number of Establishments in the Global Engineering
and Construction Services Industry (2008) 5
India - Leader in the ESO Market 5
Engineering Services - Role of Technologies 5
ESO Gains Popularity among Communications Dealers 6
R&D Outsourcing Gathers Pace 7
Table 6: Global Engineering Services Market (1990-2010):
Percentage Share Breakdown of R&D Centers by Domicile (Home
Country & Abroad) 7

Table 7: Global Engineering Services Market by Service
(2011): Percentage Share Breakdown of R&D Facilities for Home
Country and Abroad 8
Quality Certification - An Essential Requirement 8

2. ENGINEERING SERVICES OUTSOURCING 9
Offshoring of Engineering Services - An Introduction 9
Market Outlook 9
Market Traits 10
Outsourced Engineering Market Witnesses Strong Growth despite
Recession 10
Present Scenario 10
Noteworthy Trends 10
Growth in OEMs and OESs Boost Demand for ESO 10
Outsourced Engineering Services in the Automotive Sector to
Witness Growth 11
Global EAM and FSM Market on the Rise 11
European Companies Vie for Viability 11
Evolution of ESO Market 11
Evolution of Outsourced Engineering Services in Product Design
Sector 12
Major Application Areas for ESO Sector 13
Benefits of Offshoring 13
Key End Markets for ESO Providers 14
Developing Countries - Leading Offshore Providers of
Engineering Services 14
Table 8: Global Source of Engineering Services Outsourcing
Work (2011) 15
Shortage of Skilled Personnel 15
Trends & Developments in Select Industries 15
Offshoring Trends in Select Industries 16
Automotive Industry - Leading the Offshoring Trend 16
Aerospace and Defense - The Sunrise Industry 16
Offshoring of Engineering Services in the Construction Industry 17
Offshoring in EPC Sector 17
Offshoring in AEC Sector 17
Outlook 18
Competition 18

3. PRODUCT OVERVIEW 19
An Introduction to the Engineering Discipline 19
Engineering Services - A Conceptual Definition 19
Engineering Service Providers 19
Engineering Services Industry - A Historical Perspective 20

4. RECENT INDUSTRY ACTIVITY 21

A REGIONAL MARKET PERSPECTIVE 89

1. THE UNITED STATES 89
Engineering Services Market in the US - An Introduction 89
Current Scenario 89
A Glance at the Past 89
Key Trends of the Past 89
Architectural, Engineering and Construction (AEC) Services
Market - An Overview 90
Leading Design Firms (Architectural and Engineering) in the US
(2010) 90
Domestic Firms Feel the Heat of Offshore Outsourcing 90
Transmission and Distribution Services Market 91
Competitive Landscape 91
Table 9: Leading Players in the US Engineering Services
Market (2008): Percentage Share Breakdown of Revenues 92

2. CANADA 93
Introduction 93
Engineering and Design Market 93
Table 10: Canadian Engineering Services Industry (2011):
Percentage Share Breakdown of Operating Revenues by Firm Size 93

Table 11: Engineering Services Market in Canada (2011):
Percentage Share Breakdown of Firms by Number of Employees 94
Consulting Engineering Services Market in Canada 94

3. EUROPE 95
Engineering Services Market in the EU - An Introduction 95
Table 12: European Recent Past, Current & Future Analysis for
Engineering Services by Geographic Region - France, Germany,
Italy, UK, Spain, Russia, and Rest of European Markets
Independently Analyzed with Annual Sales Figures in US$
Million for Years 2010 through 2015 96

Table 13: European 5-Year Perspective for Engineering
Services by Geographic Region - Percentage Breakdown of
Dollar Sales for France, Germany, Italy, UK, Spain, Russia,
and Rest of Europe Markets for the Years 2011 & 2015 97

Table 14: Engineering and Construction Services Market in
Europe (2011): Percentage Share Breakdown of Revenues By
Country 97

Table 15: Engineering and Construction Services Market in
EU-15 (2011): Percentage Share Breakdown of Number of
Establishments by Country 98
Construction Industry - The Leading End-Market 98
Construction Engineering in Europe - Offshoring Status 98
Germany Leads the European Engineering Services Market 99
Engineering Services in Europe 100
ESO Market in EU - An Overview 100
ESO Outsourcing Models for the European Market 101
Factors Driving Outsourcing Decision Among European Companies 101
Opportunities for Offshoring 102
Potential Opportunities for Outsourcing of Various Types of
Engineering Services in Europe 102
Barriers to ESO 103
India and China - The Key Competitors 103
Offshoring - An Ideal Strategy for SMEs 103
Nearshoring Gains Momentum 104
ESO to Developing Countries - Analyzing Opportunities & Threats 104

3a. FRANCE 105
Engineering and Construction Services Market - An Overview 105
Table 16: Annual Expenditure in the French Engineering and
Construction Services Market (2011): Percentage Breakdown by
Sector 105
French Market - At a Glance 105
Table 17: Engineering Services Market in France (2011):
Percentage Share Breakdown of Number of Companies by Firm
Size 106
Offshoring of Engineering Services - An Insight 106
Table 18: Leading Destinations for French Engineering Firms
(2011) 107

3b. GERMANY 108
Engineering and Construction Services Market - An Overview 108
Table 19: German Engineering Services Industry (2011):
Percentage Share Breakdown of Number of Firms by Firm Size 108
Major Trends 108
Potential for Nearshore and Offshore Outsourcing 109
Barriers to Outsourcing 109
Major Nearshore/Offshore Destinations for German Companies 109

3c. ITALY 111
Engineering and Construction Services Market - An Insight 111
Table 20: Engineering and Construction Services Industry in
Italy (2011): Percentage Share Breakdown of Number of Firms
by Number of Employees 111
Key Trends and Developments 111
Potential for Outsourcing 112

3d. HE UNITED KINGDOM 113
Review of Engineering and Construction Services Market 113
Table 21: Engineering and Construction Services Industry in
the UK (2011): Percentage Share Breakdown of Number of Firms
by Size of Employment 113
Major Trends and Developments 113
Benefiting from the Outsourcing Opportunity 114

3e. RUSSIA 115
Overview 115
Automotive Design and Engineering Market in Russia and CIS 115
Table 22: Outsourced Automotive Design & Engineering Market
in Russia and CIS (2011): Percentage Share Breakdown of
Spending by Function 115

3f. REST OF EUROPE 116

3fa. THE NETHERLANDS 116
Engineering Services Market - An Overview 116
Major Trends & Developments 116
The Offshoring Trend - An Insight 116
Factors Influencing Offshoring/ Nearshoring of Engineering
Services 117
Table 23: Preference of Dutch Firms for Outsourcing
Operations (2011) 117

4. ASIA-PACIFIC 118
A Quick Primer 118

4a. AUSTRALIA 118
Engineering Consulting Services Industry - An Overview 118

4b. CHINA 119
Engineering and Project Planning Services in China 119

4c. HONG KONG 120
Engineering Services Market 120

4d. INDIA 121
India - The Leading Destination for Engineering Services 121
Sustaining the Competitive Edge 121
Current Scenario 121
Table 24: Leading Sectors in the Indian Engineering Services
Outsourcing Market (2011): Percentage Share Breakdown of
Spending by Sector 122
Exports of Engineering Services Grow 122
Table 25: Indian Engineering Services Exports Market (2011):
Percentage Share Breakdown of Revenues by Type of Service
Provider 123
IT & ITeS Sectors Foray into Engineering Services Outsourcing
Arena 123
Expanding ESO Sector Boosts Demand for Skilled Engineers 123
R&D Offshoring Gains Momentum 124
Provision of Product Engineering Services Gains Momentum 124
Automotive Design & Engineering Services - A Potential
Opportunity 125
SEZs: One-Stop-Shop Solution for Aerospace and Automotive ESO 125
High Tech Sector Leads Outsourcing Market 126
Utilities & Construction - A Small Yet Growing Market 126
Aerospace & Defense Industry - A Key Growth Sector 126
Major Vendors in Engineering Services Market 127
Major Vendors in India's Engineering Services Market 127
Table 26: Leading Exporters of Engineering Services in India
(2011): Percentage Share Breakdown of Revenues 128

4e. SINGAPORE 129
Overview 129
Industry Scale 129
Current Scenario 129
Availability of Skilled Work Force - A Major Plus 130

5. REST OF WORLD 130

5a. CHILE 130
Overview 130

5b. EGYPT 131
A Quick Primer 131

5c. IRAN 131
Rise in Exports of Engineering Technical Services 131

GLOBAL DIRECTORY
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Engineering services sector benefited substantially from the expansion of engineering industry into various international markets over the years. With the globalization of engineering work, firms have gained access to international markets, along with the improved flow of goods, knowledge, and services. As the global demand for engineering services increases, emerging markets, including India, are expected to play a significant role in addressing such needs, by not only offering cost benefits, but also allowing firms to gain competitive edge through specialized capabilities. Global spending on engineering services is projected to witness steady growth in the coming years. At present, high-tech/telecom and automotive sectors account for a major share of the total spending on engineering services, with the remaining share held by aerospace, utilities, industrial, construction, and defense sectors.

Engineering services outsourcing market is expected to become increasingly competitive in future. Formerly, production and low-end operations comprised the foremost engineering activities to be outsourced to the international markets, as part of a move towards globalization. The trend changed with firms opting to outsource other engineering functions, including high-value operations, to overseas markets. However, technology-centric firms, with engineering as core business activity, continued to safeguard their expertise, limiting operations within the domicile country. Majority of the high-end or advanced engineering operations continue to be retained in the company’s home country. However, the trend is changing as companies across the world exhibit their expertise in handling all types of engineering processes. Asian countries, in particular India and China, are competing fiercely in the global engineering services outsourcing market.

Several innovative technologies are finding use in the product design and development operations as measures to improve collaborative engineering, and for enhancing functionality and performance of the products. Apart from improving product safety and reliability, the incorporation of latest technologies facilitates the lowering of product design costs, and ensures compliance with various regulatory specifications. Companies providing engineering services need to adopt technologies, which facilitate the convenient, faster, and safer transfer of data. In addition, the focus is being shifted to collaborative working technologies that enable global teams to function concurrently.

The automotive industry was among the foremost to recognize the potential benefits offered by outsourcing of engineering services to low-cost emerging markets such as India. This realization led to the first move towards outsourcing of operations to India, in the form of captives of automotive companies. The distinct change in strategic view of companies is expected to emerge as the major driver for the outsourcing market. Thus, competitive pressures and the need to expand business activities are prompting large companies to offshore their engineering operations. One of the few markets to successfully weather the recessionary blues and emerge stronger from economic crisis is the outsourced engineering sector. With the recession having played out its part in full proportion, and global economy staging a recovery in 2010, the concept of outsourcing continues to find favor among an increasing number of companies. This trend can be mainly attributed to the rise in consumer confidence as well as the proven cost advantages and validity of the concept.

The research report titled “Engineering Services: A Global Outlook” announced by Global Industry Analysts, Inc., provides a collection of statistical anecdotes, market briefs, and concise summaries of research findings. The report briefly discusses the trends in the engineering services market, with a special focus on outsourcing of engineering services, alongside services market dynamics in various sectors. The report also recapitulates recent noteworthy mergers, acquisitions, and other strategic developments. Regional markets briefly abstracted include the United States, Canada, France, Germany, UK, China, and India among others. Market discussions in the report are punctuated with fact-rich market data tables. Also included is an indexed, easy-to-refer, fact-finder directory listing the addresses, and contact details of companies worldwide.

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