In 2020, the global engineering services outsourcing market was estimated at USD 1.06 trillion. From 2022 - 2027, it is projected to rise at a compound annual growth rate (CAGR) of 22.9 percent. Engineers are incorporating IT more and more closely into product design every year. Engineering services outsourcing (ESO) is a growing industry, with ESO providers setting the standard for engineering and IT integration. In order to provide smart solutions to customers, the ESO model has evolved as well. As a result, the industry has seen a move away from core engineering services and toward embedded engineering solutions, such as automation, analytics, and the internet of things (IoT). Meanwhile, technological advancements have paved the way for products-as-a-service that are designed with integrated IT solutions capable of scheduling maintenance and predicting outages in advance. Simultaneously, the globalization of R&D activities has forced the major market players to incorporate global distribution mechanisms into their respective business strategies.
Market Drivers and Restraints
The availability of low-cost, highly qualified resources capable of working on complex tasks such as not only design and testing but also validation, simulation, and execution, is one of the major factors driving the engineering services outsourcing market. The industry is promoting smart manufacturing, and driving demand for the new industrial technologies focused on robotics, AI, and machine learning, resulting in opportunities for IT inclusion in ESPs' service offerings. The increased demand for automation and acceptance of integrated solutions for analyzing and designing engineering systems are two major factors driving the engineering services outsourcing market. Computer-aided design (CAD) software, computer-aided engineering (CAE) software, computer-aided manufacturing (CAM) software, electronic design automation (EDA) software, and architecture, engineering, and construction (AEC) software are widely used in the area. Furthermore, as mobile devices such as smartphones, tablets, and laptops become more popular, engineering software has become easier to use and access. This, in turn, is boosting the engineering service outsourcing market's growth.
The engineering services outsourcing market is being hampered by high maintenance and licensing costs, as well as a lack of technological experience in operating this software. Another factor limiting the engineering services outsourcing market is the narrowing of the cost gap between advanced and developing countries' professionals. However, the global engineering services outsourcing market is expected to face significant intellectual property confidentiality and security threats. It may result in substantial financial losses for the company, so businesses must maintain a high level of vigilance to prevent theft.
Market Size Available
2020 – 2026
2022 - 2027
By Service, Location, Application, and Region.
Various Analyses Covered
Global, Regional & Country Level Analysis, Segment-Level Analysis, DROC, PESTLE Analysis, Porter’s Five Forces Analysis, Competitive Landscape, Analyst Overview on Investment Opportunities
North America, Europe, APAC, Latin America, Middle East & Africa
Market Leaders Profiled
HCL Technologies Limited, IAV GmbH, P+Z Engineering GmbH, Tata Consulting Services Limited, Wipro Limited, Cybage software, Kistler Instruments AG, and Infosys Ltd ,EDAG Engineering GmbH, ASAP Holdings GmbH, FEV Group and Others.
The engineering services outsourcing market is segmented as follows:
the engineering services outsourcing market is divided into Designing, Prototyping, and System Integration Testing. In 2020, the Testing segment had the highest sales share of over 30.0 percent, and this trend is projected to continue during the forecast period. The need to build and upgrade product models with higher compatibility and bug-free operations has fueled the testing industry's growth in recent years. Over the forecast period, the Designing segment is expected to rise at a significant rate, with a CAGR of around 25.0 percent. The rise can be attributed to increasing design complexity and the need to reduce costs by outsourcing design to a professional yet relatively low-cost workforce.
the engineering services outsourcing market is divided into Offshore, Onshore. In 2020, the onshore segment had the highest revenue share of over 55.0 percent, and it is projected to maintain its dominance over the forecast period. Onshore services refer to the provision of services to an OEM (Original Equipment Manufacturers) located in the same country as the ESP (Engineering Service Providers).
the engineering services outsourcing market is divided into Aerospace, Industrial, Automotive, Construction, Consumer Electronics, Semiconductors, Pharmaceuticals, Telecom. In 2020, the industrial segment had the largest revenue share, accounting for over 60.0 percent of the total market, and it is projected to continue to dominate the engineering services outsourcing market over the forecast period. Drilling, blasting, crushing, and tunneling are among the exploration facilities that are gradually adopting digitization. Cloud computing is being used by industrial goods manufacturing companies to modernize their IT infrastructure, push automation, and streamline legacy processes through the use of private, public, and hybrid clouds.
Based on region Engineering Service outsourcing Market is divided into North America, Asia Pacific, Europe, South America, The Middle East, and Africa.
With a revenue share of about 40.0 percent in 2020, Asia Pacific dominated the engineering services outsourcing market and is projected to rise significantly over the forecast period.
The Asia Pacific region is a center for industrial goods manufacturing as well as cost-effective engineering services provided by highly qualified professionals. The area is also home to a number of well-known software service providers. The Asia Pacific engineering services outsourcing market is expected to expand due to the increasing demand for technological innovation and the continued incorporation of embedded software into existing models.
Over the projected period, South America is expected to rise significantly. For manufacturers and suppliers based in the United States, the area has emerged as one of the most common offshore outsourcing locations. As a result, a number of major market players are looking to develop locations in South America. The relatively stable wage inflation in South America, compared to other offshore locations, is another important factor driving the engineering services outsourcing market demand. Furthermore, the paperwork needed for outsourcing in the area is extremely comprehensive, which is an advantage, making it a profitable market for both players.
The outbreak of the COVID-19 pandemic in early 2020, and the subsequent lockdowns enacted in various countries around the world to stop the disease from spreading, had varying effects on the ESO market, depending on the end-use industry. For instance, the temporary shutdown of manufacturing facilities, processing units, public transportation, and logistics operations affected industries and industry verticals such as automotive and aerospace, among others. The pharmaceutical and healthcare industries, on the other hand, were largely unchanged, with healthcare companies focusing on the production of advanced personal protective equipment (PPE) and testing kits and pharmaceutical companies pursuing COVID-19 vaccine development. As a result, demand growth will be moderate over the projected period.
HCL Technologies Limited, IAV GmbH, P+Z Engineering GmbH, Tata Consulting Services Limited, Wipro Limited, Cybage software, Kistler Instruments AG, and Infosys Ltd ,EDAG Engineering GmbH, ASAP Holdings GmbH, FEV Group are major players in the engineering services outsourcing market.
1.1 Market Definition
1.2 Scope of the report
1.3 Study Assumptions
1.4 Base Currency, Base Year and Forecast Periods
2. Research Methodology
2.1 Analysis Design
2.2 Research Phases
2.2.1 Secondary Research
2.2.2 Primary Research
2.2.3 Data Modelling
2.2.4 Expert Validation
2.3 Study Timeline
3. Report Overview
3.1 Executive Summary
3.2 Key Inferencees
4. Market Dynamics
4.1 Impact Analysis
4.2 Regulatory Environment
4.3 Technology Timeline & Recent Trends
5. Competitor Benchmarking Analysis
5.1 Key Player Benchmarking
5.1.1 Market share analysis
5.1.3 Regional Presence
5.2 Mergers & Acquistion Landscape
5.3 Joint Ventures & Collaborations
6. Market Segmentation
6.1 Engineering Services Outsourcing Market, By Services
6.1.3 System Integration
6.1.5 Market Size Estimations & Forecasts (2022 - 2027)
6.1.6 Y-o-Y Growth Rate Analysis
6.1.7 Market Attractiveness Index
6.2 Engineering Services Outsourcing Market, By Application
6.2.5 Consumer Electronics
6.2.7 Market Size Estimations & Forecasts (2022 - 2027)
6.2.8 Y-o-Y Growth Rate Analysis
6.2.9 Market Attractiveness Index
6.3 Engineering Services Outsourcing Market, By Location
6.3.3 Market Size Estimations & Forecasts (2022 - 2027)
6.3.4 Y-o-Y Growth Rate Analysis
6.3.5 Market Attractiveness Index
7. Geographical Landscape
7.1 Global Engineering Services Outsourcing Market, by Region
7.2 North America - Market Analysis (2018 - 2024)
7.2.1 By Country
7.2.2 By Services
7.2.3 By Application
7.2.4 By Location
7.3.1 By Country
22.214.171.124 Rest of Europe
7.3.2 By Services
7.3.3 By Application
7.3.4 By Location
7.4 Asia Pacific
7.4.1 By Country
126.96.36.199 South Korea
188.8.131.52 South East Asia
184.108.40.206 Australia & NZ
220.127.116.11 Rest of Asia-Pacific
7.4.2 By Services
7.4.3 By Application
7.4.4 By Location
7.5 Latin America
7.5.1 By Country
18.104.22.168 Rest of Latin America
7.5.2 By Services
7.5.3 By Application
7.5.4 By Location
7.6 Middle East and Africa
7.6.1 By Country
22.214.171.124 Middle East
7.6.2 By Services
7.6.3 By Application
7.6.4 By Location
8. Key Player Analysis
8.1 HCL Technologies Limited
8.1.1 Business Description
8.1.4 SWOT Analysis
8.1.5 Recent Developments
8.1.6 Analyst Overview
8.2 IAV GmbH
8.3 P+Z Engineering GmbH
8.4 Tata Consulting Services Limited
8.5 Wipro Limited
8.6 Cybage software
8.7 Kistler Instruments AG
8.8 Infosys Ltd
8.9 EDAG Engineering GmbH
8.10 ASAP Holdings GmbH
9. Market Outlook & Investment Opportunities
List of Tables
List of Figures
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