Engineering Services Outsourcing Market Size and Share - Outlook Report, Forecast Trends and Growth Analysis (2025-2034)

The global engineering services outsourcing (ESO) market stood at USD 698.50 Billion in 2024. The market is expected to grow at a CAGR of 30.10% in the forecast period of 2025-2034, reaching a value of USD 9.70 trillion by 2034.

The industry growth is expected to be driven by the rising level of technical complexity for product development and manufacturing across sectors, cost reduction, shorter product lifecycles, and the growing number of linkages between OEMs and Engineering Service Providers (ESPs).

Market Segmentation

The engineering services outsourcing (ESO) industry can be divided based on segments like application and location type.

Market Breakup by Application

• Aerospace
• Automotive
• Construction
• Consumer Electronics
• Semiconductors
• Pharmaceuticals
• Telecom
• Others

Market Breakup by Location Type

• On-Shore
• Off-Shore

Market Breakup by Region

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East and Africa

Market Analysis

The growth of the ESO industry and the growing adoption of outsourcing of engineering services is primarily due to a shorter life cycle of products. Business solutions that are usually offered last for a shorter period, resulting in re-purchase or resubscription. For example, a consumer would need to upgrade the IT infrastructure system after the duration of the contract or an automobile OEM may need a new set of engines for its future vehicle, requiring continuous technical improvements. The repetitive nature of the services, therefore, ensures that the ESO company flourishes, along with increasing the demand for subsequent goods, thus, propelling the industry growth. The industry experience, past ventures, market value, and the quality of service it provides are some of the key factors to be considered when choosing an ESO provider. However, because of the lack of project experience, familiarity with client requirements, and business networks, new entrants can find it challenging to enter the industry and develop their presence.

Competitive Landscape

The report presents a detailed analysis of the following key players in the global engineering services outsourcing (ESO) market, looking into their capacity, competitive landscape, and latest developments like capacity expansions, plant turnarounds, and mergers and acquisitions:

• Alten S.A
• Altair Engineering Inc.
• Capgemini SE
• ASAP Holding GmbH
• AVL List GmbH
• International Business Machines Corporation
• Others

The report gives an in-depth insight into the industry by providing a SWOT analysis as well as an analysis of Porter’s Five Forces model.