USD 1.3 trillion
Engineering Services Outsourcing Market Size, Share, Growth Analysis, By Service(Designing, Prototyping, System Integration, Testing), By Location(On-shore, Off-shore), By Application(Aerospace, Automotive, Manufacturing, Consumer Electronics), By Region - Industry Forecast 2025-2032
Report ID:
SQMIG45B2095 |
Region:
Global |
Published Date: September, 2024
Pages:
165
|Tables:
93
|Figures:
76
Engineering Services Outsourcing Market Insights
Engineering Services Outsourcing Market size was valued at USD 2.05 Trillion in 2023 and is poised to grow from USD 2.55 Trillion in 2024 to USD 14.76 Trillion by 2032, growing at a CAGR of 0.2453 during the forecast period (2025-2032).
The increasing popularity of Engineering Services Outsourcing (ESO) is expected to drive the expanding partnership between Engineering Service Providers (ESP) and Original Equipment Manufacturers (OEM) among other direct reasons. It is projected that the market will rise because of advancements in worldwide R&D, growing need for products to include the most delinquent technologies, growing desire to shorten product lifecycles, and rising cost pressure. Due to the strong desire from clients to outsource various services as part of cost-cutting initiatives, the market for engineering services outsourcing has been expanding steadily.
Additionally, in order to provide consumers with clever solutions, the engineering services outsourcing model has been designed. The sector of engineering services outsourcing (ESO) has evolved from conventional engineering services to embedded engineering solutions which encompass automation, analytics and Internet of Things (IoT) and other aspects. Advancements in technology has also enabled integration of IT solutions in PaaS (platform as a service) plans. The main companies in the engineering services outsourcing sector now incorporate global delivery networks into their business plans as a result of worldwide research and development initiatives. The engineering services sector has seen a significant shift in needs, moving from mechanical and non-core needs to place-based competences.
US Engineering Services Outsourcing Market is poised to grow at a sustainable CAGR for the next forecast year.
Market snapshot - 2024-2031
Global Market Size
Largest Segment
Onshore
Fastest Growth
Onshore
Growth Rate
24.6% CAGR
Global Engineering Services Outsourcing Market ($ Bn)
Country Share by North America (%)
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Engineering Services Outsourcing Market Segmental Analysis
Global Engineering Services Outsourcing Market is segmented by Service, Location, Application, and region. Based on Service, the market is segmented into Designing, Prototyping, System Integration, Testing, and Others. Based on Location, the market is segmented into On-shore, and Off-shore. Based on Application, the market is segmented into Aerospace, Automotive, Manufacturing, Consumer Electronics, Semiconductors, Healthcare, Telecom, Energy & Utilities, Construction & Infrastructure, and Others. Based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America and Middle East & and Africa.
Engineering Services Outsourcing Market Analysis by Service
As per categorization by service, the market is classified as designing, prototyping, system integration, testing and others. Among these, the testing earned the largest share and continues to dominate the market. The global engineering services outsourcing market is experiencing significant innovation and increasing reliance on Testing Services, driven by the need for enhanced product quality and faster time-to-market. In modern times, organizations are incorporating sophisticated testing techniques like automation and artificial intelligence-based techniques to make the processes easier and quicker. Testing services considerably rule the market due to their importance in promoting compliance, managing risks, and lowering costs, thus helping organizations sustain a competitive edge in the ever-changing technological advancements.
The demand for engineering design services in the global engineering services outsourcing market is growing to beat all other segments. This is largely due to the growing need for creative and tailor-made solutions in different industries. As organizations are more inclined towards the distinction of products and shorter product development periods, advanced design skills are required even more. Some of the key aspects contributing to this growth are the adoption of advanced technologies such as computer-aided design (CAD), virtual reality (VR), and artificial intelligence (AI) that promote design efficiency and creativity. In addition, availing design services enables firms to maximize their potential by utilizing external specialists, minimizing their expenses and speeding up their roll-out process thereby giving them an advantage in the market, which is very competitive.
Engineering Services Outsourcing Market Analysis by Location
There is an increase in the introduction and uptake of On-Shore services in global engineering services outsourcing market owing to localized needs. Organizations are increasingly settling for On-Shore outsourcing as it allows them to be in closer contact with a client’s needs, regulations and their cultures, thus improving communication and the efficiency of the project. This approach enables quicker response times and better-quality assurance, leading to higher customer satisfaction. Furthermore, onshore services dominate the market due to the growing emphasis on risk mitigation, intellectual property protection, and the need for compliance with stringent industry regulations, fostering a more secure and reliable engineering service environment.
Considering the availability of skilled labor and the cost advantages, offshore engineering services outsourcing is expected to be the fastest growing segment in the global engineering services outsourcing market. There is a noteworthy trend amongst organizations to adopt Off-Shore solutions primarily as lower costs of labour associated with high standard of engineering capabilities exist in these regions. Considering the availability of skilled labor and the cost advantages, Off-Shore engineering Services outsourcing is expected to be the fastest growing segment in the Engineering Services Outsourcing Market. There is a noteworthy trend amongst organizations to adopt offshore solutions primarily as lower costs of labour associated with high standard of engineering capabilities exist in these regions.
Global Engineering Services Outsourcing Market By Service (%)
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Engineering Services Outsourcing Market Regional Insights
The global engineering services outsourcing market is largely dominated by the Asia-Pacific region owing to the presence of a well-developed infrastructure, availability of a greater number of skilled engineers as well as low labor costs. Countries such as India, China and the Philippines have emerged as the foremost engineering services centers due to their good education systems combined with the government’s encouragement of science, technology, and innovation. The region’s escalating investments in digital technologies particularly in AI and automation, therefore, enhances service delivery and efficiency. In addition, the increasing need for customized engineering solutions across industries, and the ability to provide round the clock support, positions Asia Pacific as the most suitable region for overseas engineering services outsourcing.
The European continent is likely to outpace all the other regions in the global engineering services outsourcing market majorly due to its constant need for innovation and advancement in technology. This growth is attributed to the existing industrial base in the region and a high need for advanced engineering services, especially in the automotive, aerospace and renewable energy sectors. European markets turn to specialized knowledge and affordable services in the course of business where competition is stiff, resulting in more partnerships with country and regional outsourcing firms. Additionally, regulatory frameworks promoting sustainability and digital transformation further enhance the attractiveness of outsourcing engineering services, positioning Europe as a key player in the global market landscape.
Global Engineering Services Outsourcing Market By Geography
- Largest
- Fastest
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Engineering Services Outsourcing Market Dynamics
Engineering Services Outsourcing Market Driver
Cost Efficiency in Outsourcing Engineering Services
- The global engineering services outsourcing market is primarily driven by cost efficiency since every company will always seek ways to do business at the least operational costs possible. For instance, if engineering services are localized, organizations will employ specialized personnel, but the salary paid out to this pool of personnel will also be high. This serves the purpose of preventing unwise expenditure of resources. This monetary benefit allows them to increase their profit margins without losing relevant market rates.
Access to Top IT Expertise
- Access to specialized expertise is another key propellant in the global engineering services outsourcing market. With the development of industries, groups of organizations more often require advanced knowledge in AI, IoT, renewable energy, etc. In this sense, companies have no choice but to outsource as it helps to address the geographical limitations and keep up with the trends and innovations available in technological advancements.
Restraints
Quality Control Concerns
- The global engineering services outsourcing market is restrained largely due to quality control issues. Such concerns typically lead companies to avoid outsourcing engineering services as it may compromise quality or delivery. It presents challenges when trying to ensure that the quality levels of outsourced partners are maintained, which affects the overall success of a project and satisfaction of the client.
Cultural and Communication Barriers
- One of the major limitations in the global engineering services outsourcing market is Cultural and communication barriers. Each client and outsourced team have a different language, work culture and has different styles of conducting business which can cause leaps or gaps between them. However, this can put a limit to working with the strategies within the company or teamsl. Such issues can hamper teamwork, cause delays in projects and interfere with the results of the project, making companies reluctant.
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Engineering Services Outsourcing Market Competitive Landscape
The competitive landscape of the global engineering services outsourcing market is characterized by a mix of established players and emerging firms. The market is ruled by the leading global corporations like Tata Consultancy Services, Wipro, Accenture, Capgemini which provide an array of engineering solutions to several industries. These service providers take advantage of technology, people, and geographical presence to come up with cutting edge services. The rise in competition comes as a result of a growing emphasis on digital transformation and sustainability which makes companies seek to improve their service offering and operational effectiveness.
Engineering Services Outsourcing Market Top Players Company Profiles
- Alten Group (France)
- Capgemini Engineering (France)
- Entelect (South Africa)
- HCL Technologies Limited (India)
- Infosys Limited (India)
- Tata Elxsi (India)
- Tata Consultancy Services Limited (India)
- Tech Mahindra Limited (India)
- Wipro Limited (India)
- Cognizant Technology Solutions Corporation (US)
- LTTS (L&T Technology Services) (India)
- DXC Technology (US)
- KPIT Technologies (India)
- Mindtree Limited (India)
- NXP Semiconductors (Netherlands)
- Hexagon AB (Sweden)
- HCL Technologies (India)
- Zensar Technologies (India)
- Qualcomm Technologies Inc. (US)
- Siemens Digital Industries Services (Germany)
Engineering Services Outsourcing Market Recent Development
- In August 2024, Accenture revealed its latest digital engineering services focused on customers’ product development and innovation in various industries. The integration of modern technologies such as AI, IoT, and others intends to simplify processes and enhance the results of all projects eliminating competition for Accenture.
- In July 2024, Tata Consultancy Services (TCS) emphasized its engineering services framework which aims to expedite the digital transformation of manufacturing firms. This framework primarily aims at providing soft ware solutions from conception to commissioning using cloud services, machine learning and analytics in order to help clients improve efficiencies and cut down on the time taken to launch new products.
- In September 2024, Cognizant has revealed that it has formed a strategic relationship with one of the top companies in aerospace engineering for the advancement of engineering solutions. This partnership is intended to leverage the use of digital twins and predictive analytics to improve the design and manufacturing processes of different aircraft parts, thereby making Cognizant a formidable player in the aerospace engineering outsourcing industry.
Engineering Services Outsourcing Key Market Trends
- Rise of Digital Transformation: The global engineering services outsourcing market is undergoing a major transition today with more and more companies embarking on Digital Transformation by embracing cutting-edge technologies like AI, IoT, and machine learning. This cements their internal processes, speeds up time-to-market for new products, and allows them to keep pace with the changing technology trends.
- Focus on Sustainability: The global engineering Services Outsourcing Market is also experiencing a rising trend due to the growing applications of sustainability. Companies are adopting sustainable and creative solutions to minimize their carbon emissions. This trend increases the need for engineering services that have sustainable design, renewable energy resource management and efficient resource utilization practices given the international sustainability agenda.
Engineering Services Outsourcing Market SkyQuest Analysis
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Correlates, and Analyses the Data collected by means of Primary Exploratory Research backed by robust Secondary Desk research.
As per SkyQuest analysis, in conclusion, the global engineering services outsourcing market is poised for significant growth, driven by advancements in technology, cost efficiency, and a strong demand for innovative solutions. As companies increasingly prioritize outsourcing to enhance operational efficiency and access specialized expertise, the market is witnessing a paradigm shift.
Also, this growing demand is driven by the ongoing emergence of digital transformation and sustainability initiatives that are changing the way services are offered. The competitive landscape is changing, and the level of competition is healthy, thereby driving the need for partnerships, strategic collaborations and alliances as well as innovations among the given players with the Asia-Pacific region being the most dominant and Europe growing at a fast pace.
| Report Metric | Details |
|---|---|
| Market size value in 2022 | USD 2.04 Trillion |
| Market size value in 2031 | USD 14.74 Trillion |
| Growth Rate | 24.60% |
| Base year | 2023 |
| Forecast period | 2024-2031 |
| Forecast Unit (Value) | USD Trillion |
| Segments covered |
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| Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
| Companies covered |
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| Customization scope | Free report customization with purchase. Customization includes:-
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Table Of Content
Executive Summary
Market overview
- Exhibit: Executive Summary – Chart on Market Overview
- Exhibit: Executive Summary – Data Table on Market Overview
- Exhibit: Executive Summary – Chart on Engineering Services Outsourcing Market Characteristics
- Exhibit: Executive Summary – Chart on Market by Geography
- Exhibit: Executive Summary – Chart on Market Segmentation
- Exhibit: Executive Summary – Chart on Incremental Growth
- Exhibit: Executive Summary – Data Table on Incremental Growth
- Exhibit: Executive Summary – Chart on Vendor Market Positioning
Parent Market Analysis
Market overview
Market size
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- SWOT Analysis
KEY MARKET INSIGHTS
- Technology Analysis
- (Exhibit: Data Table: Name of technology and details)
- Pricing Analysis
- (Exhibit: Data Table: Name of technology and pricing details)
- Supply Chain Analysis
- (Exhibit: Detailed Supply Chain Presentation)
- Value Chain Analysis
- (Exhibit: Detailed Value Chain Presentation)
- Ecosystem Of the Market
- Exhibit: Parent Market Ecosystem Market Analysis
- Exhibit: Market Characteristics of Parent Market
- IP Analysis
- (Exhibit: Data Table: Name of product/technology, patents filed, inventor/company name, acquiring firm)
- Trade Analysis
- (Exhibit: Data Table: Import and Export data details)
- Startup Analysis
- (Exhibit: Data Table: Emerging startups details)
- Raw Material Analysis
- (Exhibit: Data Table: Mapping of key raw materials)
- Innovation Matrix
- (Exhibit: Positioning Matrix: Mapping of new and existing technologies)
- Pipeline product Analysis
- (Exhibit: Data Table: Name of companies and pipeline products, regional mapping)
- Macroeconomic Indicators
COVID IMPACT
- Introduction
- Impact On Economy—scenario Assessment
- Exhibit: Data on GDP - Year-over-year growth 2016-2022 (%)
- Revised Market Size
- Exhibit: Data Table on Engineering Services Outsourcing Market size and forecast 2021-2027 ($ million)
- Impact Of COVID On Key Segments
- Exhibit: Data Table on Segment Market size and forecast 2021-2027 ($ million)
- COVID Strategies By Company
- Exhibit: Analysis on key strategies adopted by companies
MARKET DYNAMICS & OUTLOOK
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- Regulatory Landscape
- Exhibit: Data Table on regulation from different region
- SWOT Analysis
- Porters Analysis
- Competitive rivalry
- Exhibit: Competitive rivalry Impact of key factors, 2021
- Threat of substitute products
- Exhibit: Threat of Substitute Products Impact of key factors, 2021
- Bargaining power of buyers
- Exhibit: buyers bargaining power Impact of key factors, 2021
- Threat of new entrants
- Exhibit: Threat of new entrants Impact of key factors, 2021
- Bargaining power of suppliers
- Exhibit: Threat of suppliers bargaining power Impact of key factors, 2021
- Competitive rivalry
- Skyquest special insights on future disruptions
- Political Impact
- Economic impact
- Social Impact
- Technical Impact
- Environmental Impact
- Legal Impact
Market Size by Region
- Chart on Market share by geography 2021-2027 (%)
- Data Table on Market share by geography 2021-2027(%)
- North America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- USA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Canada
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Europe
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Germany
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Spain
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- France
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- UK
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Europe
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Asia Pacific
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- China
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- India
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Japan
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Korea
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Asia Pacific
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Latin America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Brazil
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of South America
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Middle East & Africa (MEA)
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- GCC Countries
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Africa
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of MEA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
KEY COMPANY PROFILES
- Competitive Landscape
- Total number of companies covered
- Exhibit: companies covered in the report, 2021
- Top companies market positioning
- Exhibit: company positioning matrix, 2021
- Top companies market Share
- Exhibit: Pie chart analysis on company market share, 2021(%)
- Total number of companies covered
Methodology
For the Engineering Services Outsourcing Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Engineering Services Outsourcing Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
Analyst Support
Customization Options
With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Engineering Services Outsourcing Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Engineering Services Outsourcing Market for additional countries.
Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.
Go to Market Strategy: Find the high-growth channels to invest your marketing efforts and increase your customer base.
Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.
Category Intelligence: Customized intelligence that is relevant to their supply Markets will enable them to make smarter sourcing decisions and improve their category management.
Public Company Transcript Analysis: To improve the investment performance by generating new alpha and making better-informed decisions.
Social Media Listening: To analyze the conversations and trends happening not just around your brand, but around your industry as a whole, and use those insights to make better Marketing decisions.
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