The global engineering services outsourcing market size reached US$ 1,216.4 Billion in 2022. Looking forward, the publisher expects the market to reach US$ 3,334.2 Billion by 2028, exhibiting a growth rate (CAGR) of 18.3% during 2022-2028. The growing need to reduce product lifecycles and costs among various businesses, increasing adoption of integrated solutions for analyzing and designing engineering systems, and rising employment in the marine industry to overcome extreme weather conditions are some of the major factors propelling the engineering services outsourcing (ESO) market.
Engineering services outsourcing involves assigning several engineering tasks and functions to a team or team members that work outside the organization. They provide quick access to low-cost and talented offshore engineering specialists and increase the revenue of an organization. They allow businesses to focus more on the core activities and reduce operating costs and other overhead expenses. They assist in improving flexibility and scalability and have the capability to implement suitable business strategies and complete projects quickly and efficiently.
Engineering services outsourcing is widely employed in the aerospace, automotive, construction, consumer electronics, semiconductor, pharmaceutical, and telecom industries across the globe. In line with this, collaborations between engineering service providers (ESP) and original equipment manufacturers (OEMs) are supporting the market growth. Moreover, the growing preference for core-engineering services to embedded engineering solutions, integrating automation, analytics, and the internet of things (IoT), continues to provide a positive market outlook. Lastly, there is a growing demand for engineering services outsourcing in the marine industry, which helps overcome extreme weather conditions and physical space constraints by offering reliable operating platforms, thus fortifying the market growth.
According to the report, testing represented the largest segment due to the increasing need to create and redesign product prototypes with higher optimization and error-free processes. In addition, there is a rise in the demand for outsourcing testing services to facilitate manual intervention and reduce turnaround time. This, coupled with the growing adoption of testing services among OEMs to produce product models with higher compatibility is offering a positive market outlook.
Prototyping is early samples, models, and releases of products that are designed to be built to test a concept or process for the target audience. In addition, the rising adoption of prototyping services due to the increasing demand for innovative product designs in various industries is impelling the growth of the market. Besides this, a professional product design team provides more ideas and insights that assist in generating more revenues for a business.
System integration is essential in a business and companies are focusing on automating tasks and utilizing new technologies to reduce time. Apart from this, the rising adoption of system integration outsourcing services, as they provide customization as per consumer need, reduction in costs, and improved quality of product, is bolstering the growth of the market.
According to the report, onshore accounted for the largest market. It is the provision of services to an OEM based in the same nation as the engineering services providers. It assists in limiting language barriers and improving communication between service providers and OEMs. The increasing adoption of onshore services as they provide enhanced service and product delivery is propelling the growth of the market.
Offshore refers to the delivery of engineering services within international borders. In addition, various companies consider outsourcing a safe method for entering the low-cost offshore market. Besides this, the wide availability of optimal cost resources and the effortless adequacy of a competent pool in some countries is contributing to the growth of the market.
Organizations in the aerospace industry are rapidly adopting engineering services outsourcing as they require dedicated manufacturing capabilities. Moreover, the rising outsourcing activities, as they allow companies to focus more on business-critical tasks, such as executive management decisions, is positively influencing the market.
Automotive companies require reliable hardware manufacturing qualifications staff, thereby increasing the demand for digital transformation services. Additionally, the growing research and development (R&D) activities to introduce new and innovative technologies and designs are positively influencing the market. In line with this, automotive OEMs are more concerned about critical R&D activities to increase their tie-ups and collaborations with service outsourcing vendors.
Construction engineering services comprise building information modeling, CAD, structural designing, and project management that assist in reducing workload of employees and increasing productivity in the business by generating more revenues. Apart from this, there is a rise in the demand for engineering services outsourcing among individuals due to the changing consumer preferences for innovative products.
Consumer electronics comprise various services, such as design, automation, testing, and software and application development. Besides this, the growth of the segment is anticipated to increase in the coming years due to the reduction in product life cycles.
According to the report, Asia Pacific was the largest market for engineering services outsourcing. Some of the factors driving the Asia Pacific engineering services outsourcing market included the growing demand from consumer electronics and telecommunication industries, presence of highly proficient engineering professionals and various service providers and increasing utilization of IT test activities in smaller businesses. In line with this, the rising demand for technological innovation and the introduction of combination of embedded software into the current models is contributing to the growth of the market in the region.
The report has provided a comprehensive analysis of the competitive landscape in the global engineering services outsourcing market. Detailed profiles of all major companies have also been provided. Some of the key players in the market include:
QuEST Global Services Pte. Ltd.
In May 2023, Altair Engineering Inc. announced the latest updates to its simulation portfolio, Simulation 2022.3. These updates build on the enhancements brought by the previous version and focus on cloud collaboration and computing, efficient end-to-end simulation workflows, and superior design creation with AI-powered simulation.
In May 2023, Infosys Ltd. launched Infosys Topaz Generative AI Labs - an AI-first set of services, solutions and platforms using generative AI technologies. It brings the capabilities of generative AI, analytics and cloud to accelerate the market offerings by Infosys Ltd.
2. What is the expected growth rate of the global engineering services outsourcing market during 2023-2028?
3. What are the key factors driving the global engineering services outsourcing market?
4. What has been the impact of COVID-19 on the global engineering services outsourcing market?
5. What is the breakup of the global engineering services outsourcing market based on the service?
6. What is the breakup of the global engineering services outsourcing market based on the location?
7. What is the breakup of the global engineering services outsourcing market based on the application?
8. What are the key regions in the global engineering services outsourcing market?
9. Who are the key players/companies in the global engineering services outsourcing market?
Engineering services outsourcing involves assigning several engineering tasks and functions to a team or team members that work outside the organization. They provide quick access to low-cost and talented offshore engineering specialists and increase the revenue of an organization. They allow businesses to focus more on the core activities and reduce operating costs and other overhead expenses. They assist in improving flexibility and scalability and have the capability to implement suitable business strategies and complete projects quickly and efficiently.
Engineering services outsourcing is widely employed in the aerospace, automotive, construction, consumer electronics, semiconductor, pharmaceutical, and telecom industries across the globe. In line with this, collaborations between engineering service providers (ESP) and original equipment manufacturers (OEMs) are supporting the market growth. Moreover, the growing preference for core-engineering services to embedded engineering solutions, integrating automation, analytics, and the internet of things (IoT), continues to provide a positive market outlook. Lastly, there is a growing demand for engineering services outsourcing in the marine industry, which helps overcome extreme weather conditions and physical space constraints by offering reliable operating platforms, thus fortifying the market growth.
Engineering Services Outsourcing Market Trends/Drivers:
- Rising Demand for Automation Tools Augmenting Market Growth
Engineering Systems Utilization and Its Impact on Market Growth
Currently, there is a notable increase in the use of engineering systems, such as computer-aided design (CAD), computer-aided engineering (CAE), computer-aided manufacturing (CAM), and electronic design automation (EDA) software, in numerous industries, contributing to a positive market outlook. Additionally, businesses worldwide are witnessing a surge in demand to reduce product lifecycles and costs. Coupled with this is the growing application of engineering services outsourcing, which aids in reducing the maintenance of office space, additional infrastructure, staffing and operations, further bolstering market growth.Industrial Automation and Integrated Solutions: Key Drivers of Market Expansion
The rapid pace of industrial automation, along with the rising adoption of integrated solutions for analyzing and designing engineering systems globally, is propelling the market growth. Furthermore, the increased use of outsourcing services, which provide expert advice and advanced technologies from skilled professionals, even from remote locations worldwide, is offering enticing growth opportunities to industry investors.Engineering Services Outsourcing Industry Segmentation:
The publisher provides an analysis of the key trends in each segment of the global engineering services outsourcing market report, along with forecasts at the global, regional and country levels from 2023-2028. Our report has categorized the market based on service, location and application.Breakup by Service:
- Designing
- Prototyping
- System Integration
- Testing
- Others
Testing represents the dominant service segment
The report has provided a detailed breakup and analysis of the engineering services outsourcing market based on the service. This includes designing, prototyping, system integration, testing, and others.According to the report, testing represented the largest segment due to the increasing need to create and redesign product prototypes with higher optimization and error-free processes. In addition, there is a rise in the demand for outsourcing testing services to facilitate manual intervention and reduce turnaround time. This, coupled with the growing adoption of testing services among OEMs to produce product models with higher compatibility is offering a positive market outlook.
Prototyping is early samples, models, and releases of products that are designed to be built to test a concept or process for the target audience. In addition, the rising adoption of prototyping services due to the increasing demand for innovative product designs in various industries is impelling the growth of the market. Besides this, a professional product design team provides more ideas and insights that assist in generating more revenues for a business.
System integration is essential in a business and companies are focusing on automating tasks and utilizing new technologies to reduce time. Apart from this, the rising adoption of system integration outsourcing services, as they provide customization as per consumer need, reduction in costs, and improved quality of product, is bolstering the growth of the market.
Breakup by Location:
- Onshore
- Offshore
Onshore services hold the largest market share based on location
A detailed breakup and analysis of the engineering services outsourcing market based on the location has also been provided in the report. This includes onshore and offshore.According to the report, onshore accounted for the largest market. It is the provision of services to an OEM based in the same nation as the engineering services providers. It assists in limiting language barriers and improving communication between service providers and OEMs. The increasing adoption of onshore services as they provide enhanced service and product delivery is propelling the growth of the market.
Offshore refers to the delivery of engineering services within international borders. In addition, various companies consider outsourcing a safe method for entering the low-cost offshore market. Besides this, the wide availability of optimal cost resources and the effortless adequacy of a competent pool in some countries is contributing to the growth of the market.
Breakup by Application:
- Aerospace
- Automotive
- Construction
- Consumer Electronics
- Semiconductors
- Pharmaceuticals
- Telecom
- Others
Organizations in the aerospace industry are rapidly adopting engineering services outsourcing as they require dedicated manufacturing capabilities. Moreover, the rising outsourcing activities, as they allow companies to focus more on business-critical tasks, such as executive management decisions, is positively influencing the market.
Automotive companies require reliable hardware manufacturing qualifications staff, thereby increasing the demand for digital transformation services. Additionally, the growing research and development (R&D) activities to introduce new and innovative technologies and designs are positively influencing the market. In line with this, automotive OEMs are more concerned about critical R&D activities to increase their tie-ups and collaborations with service outsourcing vendors.
Construction engineering services comprise building information modeling, CAD, structural designing, and project management that assist in reducing workload of employees and increasing productivity in the business by generating more revenues. Apart from this, there is a rise in the demand for engineering services outsourcing among individuals due to the changing consumer preferences for innovative products.
Consumer electronics comprise various services, such as design, automation, testing, and software and application development. Besides this, the growth of the segment is anticipated to increase in the coming years due to the reduction in product life cycles.
Breakup by Region:
- North America
- United States
- Canada
- Asia Pacific
- China
- Japan
- India
- South Korea
- Australia
- Indonesia
- Others
- Europe
- Germany
- France
- United Kingdom
- Italy
- Spain
- Russia
- Others
- Latin America
- Brazil
- Mexico
- Others
- Middle East and Africa
Asia Pacific exhibits a clear dominance, accounting for the largest engineering services outsourcing market share
The report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa.According to the report, Asia Pacific was the largest market for engineering services outsourcing. Some of the factors driving the Asia Pacific engineering services outsourcing market included the growing demand from consumer electronics and telecommunication industries, presence of highly proficient engineering professionals and various service providers and increasing utilization of IT test activities in smaller businesses. In line with this, the rising demand for technological innovation and the introduction of combination of embedded software into the current models is contributing to the growth of the market in the region.
Competitive Landscape:
The top engineering services outsourcing companies are employing artificial intelligence (AI) to automate tasks, such as product development, testing, and quality assurance, and divert resources toward more strategic and creative work. They are also adopting cloud computing and big data to collaborate with partners and suppliers, gain insights into customer behavior and preferences, and reduce costs and improve agility. These technologies help their customers design better products and services by monitoring and optimizing manufacturing and development processes. This is further augmented by the utilization of IoT and augmented and virtual reality (AR/VR) technologies that enable market players to collect data and insights, create immersive and interactive experiences, and improve the accuracy and efficiency of engineering projects.The report has provided a comprehensive analysis of the competitive landscape in the global engineering services outsourcing market. Detailed profiles of all major companies have also been provided. Some of the key players in the market include:
- Accenture Plc
- Altair Engineering Inc.
- ALTEN
- EPAM Systems Inc.
- HCL Technologies Limited
QuEST Global Services Pte. Ltd.
- Sonata Software Limited
- Tata Consultancy Services Limited
- Tech Mahindra Limited (Mahindra Group)
- Wipro Limited
Recent Developments:
In June 2023, Accenture Plc acquired Nextira, a provider of cloud engineering expertise, propriety solutions, and predictive analytics. The acquisition will help expand the set of engineering capabilities offered by Accenture Cloud First.In May 2023, Altair Engineering Inc. announced the latest updates to its simulation portfolio, Simulation 2022.3. These updates build on the enhancements brought by the previous version and focus on cloud collaboration and computing, efficient end-to-end simulation workflows, and superior design creation with AI-powered simulation.
In May 2023, Infosys Ltd. launched Infosys Topaz Generative AI Labs - an AI-first set of services, solutions and platforms using generative AI technologies. It brings the capabilities of generative AI, analytics and cloud to accelerate the market offerings by Infosys Ltd.
Key Questions Answered in This Report
1. How big is the engineering services outsourcing market?2. What is the expected growth rate of the global engineering services outsourcing market during 2023-2028?
3. What are the key factors driving the global engineering services outsourcing market?
4. What has been the impact of COVID-19 on the global engineering services outsourcing market?
5. What is the breakup of the global engineering services outsourcing market based on the service?
6. What is the breakup of the global engineering services outsourcing market based on the location?
7. What is the breakup of the global engineering services outsourcing market based on the application?
8. What are the key regions in the global engineering services outsourcing market?
9. Who are the key players/companies in the global engineering services outsourcing market?
Table of Contents
1 Preface3 Executive Summary11 Value Chain Analysis13 Price Analysis
2 Scope and Methodology
4 Introduction
5 Global Engineering Services Outsourcing Market
6 Market Breakup by Service
7 Market Breakup by Location
8 Market Breakup by Application
9 Market Breakup by Region
10 SWOT Analysis
12 Porters Five Forces Analysis
14 Competitive Landscape
List of Figures
List of Tables
Companies Mentioned
- Accenture Plc
- Altair Engineering Inc.
- ALTEN
- Cybage Software Pvt. Ltd.
- EPAM Systems Inc.
- HCL Technologies Limited
- Infosys Ltd.
- QuEST Global Services Pte. Ltd.
- Sonata Software Limited
- Tata Consultancy Services Limited
- Tech Mahindra Limited (Mahindra Group)
- Wipro Limited
Methodology
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Table Information
| Report Attribute | Details |
|---|---|
| No. of Pages | 141 |
| Published | November 2023 |
| Forecast Period | 2022 - 2028 |
| Estimated Market Value ( USD | $ 1216.4 Billion |
| Forecasted Market Value ( USD | $ 3334.2 Billion |
| Compound Annual Growth Rate | 18.3% |
| Regions Covered | Global |
| No. of Companies Mentioned | 12 |
