The global Engineering Services Outsourcing market size is expected to be worth around US$ 5.60 trillion by 2030, according to a new report by Vision Research Reports.
The global Engineering Services Outsourcing market size was valued at US$ 1.10 trillion in 2020 and is anticipated to grow at a CAGR of 22.19% during forecast period 2021 to 2030.
The globalization of Research and Development (R&D), easy availability of low-cost labor and skilled professionals, and increasing adoption of information technology and smart technologies in various end-use industries are some of the factors that are expected to drive the growth of the market for engineering services outsourcing (ESO) over the forecast period.
The market has been evolving continuously in line with the advances in sensing, connected computing, artificial intelligence, and the internet of things (IoT), among other technologies. The intensifying competition to provide state-of-the-art solutions is prompting service providers to invest aggressively in R&D. Key ESO players are also putting a strong emphasis on Mergers and Acquisitions (M&A) and strengthening the existing tie-ups with their clients to tap new business opportunities. For instance, in November 2020, Tata Consultancy Services Limited, global IT services, and business solutions provider based in India announced an agreement to acquire 100% of the shares of Postbank Systems AG, one of the prominent IT service providers based in Germany, from Deutsche Bank AG. Tata Consultancy Services Limited already happens to be Deutsche Bank AG’s trusted IT service partner and the acquisition would deepen the partnership further while allowing the company to strengthen its operations in Germany.
The outbreak of the COVID-19 pandemic and the subsequent lockdowns implemented in various countries across the world at the beginning of 2020 to arrest the spread of the disease had a varying impact on the ESO market depending on the end-use industry. For instance, industries and industry verticals, such as automotive, and aerospace, among others, were adversely affected owing to the temporary shutdown of industrial facilities, production units, public transportation, and logistics operations. On the contrary, the pharmaceutical and healthcare industry was relatively unaffected as healthcare companies focused on the development of advanced personal protective equipment (PPE) and testing kits, while pharmaceutical companies embarked upon the development of COVID-19 vaccines.
The testing segment accounted for the highest revenue share of over 30.0% in 2020 and is expected to continue dominating the market over the forecast period. The need to develop and redesign product models with higher compatibility and bug-free operations has been driving the growth of the testing segment over the past years. OEMs are particularly hiring software testing services from ESPs for installing user-friendly and bug-free software. Furthermore, the growing demand for outsourcing testing services to reduce manual intervention and turnaround time is also expected to contribute to the growth of the testing segment.
The designing segment is expected to witness significant growth and exhibit a CAGR of around 25.0% over the forecast period. The growth can be attributed to the growing complexities of designs and the need to cut costs by outsourcing designing to a skilled but relatively low-cost workforce. The growing popularity of industrial, visual, architectural, and graphic designing for next-generation mobility solutions and equipment is expected to trigger the demand for design engineering over the forecast period. The soaring demand for consumer-centric products is also expected to contribute to the growth of the segment.
The onshore segment accounted for the highest revenue share of over 55.0% in 2020 and is expected to continue dominating the market over the forecast period. Onshore services envisage the delivery of services to an OEM based in the country where the ESP is based. The political and geopolitical barriers, time zone barriers, and language & cultural barriers are some of the barriers that prompt OEMs to opt for onshore outsourcing of engineering services. Onshore outsourcing particularly annuls language barriers and helps in enhancing communication between OEMs and service providers, which further enhances the delivery of products and services.
Offshore services envisage cross-border delivery of engineering services. The offshore segment is anticipated to witness sluggish growth as compared to that of the onshore segment owing to the global inflation rates, high churn rates, training costs, and growing preference for outsourcing to onshore partners. Additionally, ESPs need to abide by various regulations mentioned in the outsourcing contracts while catering to clients present in different countries. The nominal growth of the offshore segment can be attributed to the availability of cost-effective resources and easy availability of a skilled talent pool in countries, such as India, China, Malaysia, Mexico, and the Philippines.
The industrial segment accounted for the highest revenue share over 60.0% of the overall market in 2020 and is expected to continue dominating the market over the forecast period. Digitization is increasingly being adopted in various exploration services, including drilling, blasting, crushing, and tunneling. Industrial goods manufacturing enterprises are particularly adopting cloud infrastructure to modernize their IT infrastructure, drive automation, and streamline legacy processes through the implementation of private, public, and hybrid clouds. The implementation of the (IIoT) to reduce downtimes, detect and prevent faults, and cut maintenance costs is particularly expected to drive the growth of the industrial segment.
The healthcare segment is anticipated to register the highest CAGR of 30.0% from 2021 to 2028. The growth can be attributed to the aggressive investments in advanced medical equipment, laboratories, and medications. The ESPs witnessed an upheld in their sales as they are rigorously favored by the healthcare industry, especially in the past few months, to develop drugs and vaccines that will eliminate the harmful effects of coronavirus. Healthcare companies are increasingly collaborating with the ESPs to enhance clinical proficiency and cut operational costs. Several healthcare organizations are striking strategic alliances with the ESPs to augment their market presence and provide services to improve the client-contractor rapport. For instance, in August 2020, PRA Health Sciences' data solutions division, Symphony Health, expanded its data services worldwide by striking an alliance with Close-Up International, a provider of sales audits and medical prescriptions.
Asia Pacific dominated the engineering services outsourcing market with a revenue share of around 40.0% in 2020 and is expected to witness significant growth over the forecast period. The Asia Pacific happens to be a hub for industrial goods manufacturing and for hiring cost-effective services delivered by highly skilled engineering professionals. The region also serves as an epicenter of prominent software outsourcing service providers. The growing need for technological innovation and the continued integration of embedded software into the existing models is expected to drive the growth of the Asia Pacific regional market.
South America is forecast to witness significant growth over the forecast period. The region has emerged among the most preferred offshore outsourcing location for manufacturers and suppliers based in the U.S. As a result, several key market players are trying to gain a foothold in South America. Another critical factor driving the growth of the South America regional market is the stable wage inflation as compared to other offshore locations. Additionally, the paperwork required for outsourcing activity in the region is extremely detailed, which acts as a benefit, thus making it a lucrative market for both parties.
Tata Consultancy Services Limited
Altair Engineering, Inc.
Boston Engineering Corporation
Middle East & Africa
The Engineering Services Outsourcing market research report covers definition, classification, product classification, product application, development trend, product technology, competitive landscape, industrial chain structure, industry overview, national policy and planning analysis of the industry, the latest dynamic analysis, etc., and also includes major. The study includes drivers and restraints of the global market. It covers the impact of these drivers and restraints on the demand during the forecast period. The report also highlights opportunities in the market at the global level.
The report provides size (in terms of volume and value) of Engineering Services Outsourcing market for the base year 2020 and the forecast between 2021 and 2030. Market numbers have been estimated based on form and application. Market size and forecast for each application segment have been provided for the global and regional market.
This report focuses on the global Engineering Services Outsourcing market status, future forecast, growth opportunity, key market and key players. The study objectives are to present the Engineering Services Outsourcing market development in United States, Europe and China.
It is pertinent to consider that in a volatile global economy, we haven’t just conducted Engineering Services Outsourcing market forecasts in terms of CAGR, but also studied the market based on key parameters, including Year-on-Year (Y-o-Y) growth, to comprehend the certainty of the market and to find and present the lucrative opportunities in market.
In terms of production side, this report researches the Engineering Services Outsourcing capacity, production, value, ex-factory price, growth rate, market share for major manufacturers, regions (or countries) and type.
In terms of consumption side, this report focuses on the consumption of Engineering Services Outsourcing by regions (countries) and application.
Buyers of the report will have access to verified market figures, including global market size in terms of revenue and volume. As part of production analysis, the authors of the report have provided reliable estimations and calculations for global revenue and volume by Type segment of the global Engineering Services Outsourcing market. These figures have been provided in terms of both revenue and volume for the period 2017 to 2030. Additionally, the report provides accurate figures for production by region in terms of revenue as well as volume for the same period. The report also includes production capacity statistics for the same period.
With regard to production bases and technologies, the research in this report covers the production time, base distribution, technical parameters, research and development trends, technology sources, and sources of raw materials of major Engineering Services Outsourcing market companies.
Regarding the analysis of the industry chain, the research of this report covers the raw materials and equipment of Engineering Services Outsourcing market upstream, downstream customers, marketing channels, industry development trends and investment strategy recommendations. The more specific analysis also includes the main application areas of market and consumption, major regions and Consumption, major Chinese producers, distributors, raw material suppliers, equipment providers and their contact information, industry chain relationship analysis.
The research in this report also includes product parameters, production process, cost structure, and data information classified by region, technology and application. Finally, the paper model new project SWOT analysis and investment feasibility study of the case model.
Overall, this is an in-depth research report specifically for the Engineering Services Outsourcing industry. The research center uses an objective and fair way to conduct an in-depth analysis of the development trend of the industry, providing support and evidence for customer competition analysis, development planning, and investment decision-making. In the course of operation, the project has received support and assistance from technicians and marketing personnel in various links of the industry chain.
The Engineering Services Outsourcing market competitive landscape provides details by competitor. Details included are company overview, company financials, revenue generated, market potential, investment in research and development, new market initiatives, global presence, production sites and facilities, production capacities, company strengths and weaknesses, product launch, product width and breadth, application dominance. The above data points provided are only related to the companies’ focus related to Engineering Services Outsourcing market.
Prominent players in the market are predicted to face tough competition from the new entrants. However, some of the key players are targeting to acquire the startup companies in order to maintain their dominance in the global market. For a detailed analysis of key companies, their strengths, weaknesses, threats, and opportunities are measured in the report by using industry-standard tools such as the SWOT analysis. Regional coverage of key companies is covered in the report to measure their dominance. Key manufacturers of Engineering Services Outsourcing market are focusing on introducing new products to meet the needs of the patrons. The feasibility of new products is also measured by using industry-standard tools.
Key companies are increasing their investments in research and development activities for the discovery of new products. There has also been a rise in the government funding for the introduction of new Engineering Services Outsourcing market. These factors have benefited the growth of the global market for Engineering Services Outsourcing. Going forward, key companies are predicted to benefit from the new product launches and the adoption of technological advancements. Technical advancements have benefited many industries and the global industry is not an exception.
New product launches and the expansion of already existing business are predicted to benefit the key players in maintaining their dominance in the global market for Engineering Services Outsourcing. The global market is segmented on the basis of region, application, en-users and product type. Based on region, the market is divided into North America, Europe, Asia-Pacific, Latin America and Middle East and Africa (MEA).
In this study, the years considered to estimate the market size of Engineering Services Outsourcing are as follows:
Reasons to Purchase this Report:
- Market segmentation analysis including qualitative and quantitative research incorporating the impact of economic and policy aspects
- Regional and country level analysis integrating the demand and supply forces that are influencing the growth of the market.
- Market value USD Million and volume Units Million data for each segment and sub-segment
- Competitive landscape involving the market share of major players, along with the new projects and strategies adopted by players in the past five years
- Comprehensive company profiles covering the product offerings, key financial information, recent developments, SWOT analysis, and strategies employed by the major market players
In-depth interviews and discussions were conducted with several key market participants and opinion leaders to compile the research report.
This research study involved the extensive usage of both primary and secondary data sources. The research process involved the study of various factors affecting the industry, including the government policy, market environment, competitive landscape, historical data, present trends in the market, technological innovation, upcoming technologies and the technical progress in related industry, and market risks, opportunities, market barriers and challenges. The following illustrative figure shows the market research methodology applied in this report.
Market Size Estimation
Top-down and bottom-up approaches are used to estimate and validate the global market size for company, regional division, product type and application (end users).
The market estimations in this report are based on the selling price (excluding any discounts provided by the manufacturer, distributor, wholesaler or traders). Market share analysis, assigned to each of the segments and regions are achieved through product utilization rate and average selling price.
Major manufacturers & their revenues, percentage splits, market shares, growth rates and breakdowns of the product markets are determined through secondary sources and verified through the primary sources.
All possible factors that influence the markets included in this research study have been accounted for, viewed in extensive detail, verified through primary research, and analyzed to get the final quantitative and qualitative data. The market size for top-level markets and sub-segments is normalized, and the effect of inflation, economic downturns, and regulatory & policy changes or others factors are accounted for in the market forecast. This data is combined and added with detailed inputs and analysis from Vision Research Reports and presented in this report.
Market Breakdown and Data Triangulation
After complete market engineering with calculations for market statistics; market size estimations; market forecasting; market breakdown; and data triangulation. Extensive primary research was conducted to gather information and verify and validate the critical numbers arrived at. In the complete market engineering process, both top-down and bottom-up approaches were extensively used, along with several data triangulation methods, to perform market estimation and market forecasting for the overall market segments and sub-segments listed in this report.
Secondary Sources occupies approximately 25% of data sources, such as press releases, annual reports, Non-Profit organizations, industry associations, governmental agencies and customs data, and so on. This research study includes secondary sources; directories; databases such as Bloomberg Business, Wind Info, Hoovers, Factiva (Dow Jones & Company), TRADING ECONOMICS, and avention; Investing News Network; statista; Federal Reserve Economic Data; annual reports; investor presentations; and SEC filings of companies.
In the primary research process, various sources from both the supply and demand sides were interviewed to obtain qualitative and quantitative information for this report. The primary sources from the supply side include product manufacturers (and their competitors), opinion leaders, industry experts, research institutions, distributors, dealer and traders, as well as the raw materials suppliers and producers, etc.
The primary sources from the demand side include industry experts such as business leaders, marketing and sales directors, technology and innovation directors, supply chain executive, end users (product buyers), and related key executives from various key companies and organizations operating in the global market.
The study objectives of this report are:
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