R&D Services Market Overview

Content

• Key messages
• R&D services
• What are R&D services?
• Segmenting R&D services
• R&D services vs IT services
• Dynamics of the R&D services market
• Potential for growth is untapped
• But profitability levels are decreasing
• The paradox of the industry: price pressure and engineer shortage
• Clients tend to purchase R&D services as staff augmentation/body-shopping services
• Activity revolves around a limited number of key clients
• Clients are in different investment cycles
• Countries have different spending patterns
• Market evolution: challenges and opportunities
• Procurement offices will push for new offerings
• Staff augmentation will evolve
• Towards fixed price and work packages
• BPO will grow as an option
• Relocation of manufacturing will lead to offshore R&D
• The pharmaceutical industry as the next frontier
• The US will seriously change the European industry
• Recommendations for players
• The convergence of IT and R&D: opportunity for IT services players
• Solutions and software products
• International presence as differentiator
• Appendix 1: definitions
• Segmentation by industry served
• Segmentation by engagement type
• Areas of overlap with other forms of services
• Table of figures
  • Figure 1 The four pillars of R&D services
  • Figure 2 R&D services: range of services
  • Figure 3 Differentiating between IT services and R&D services
  • Figure 4 Operating margins of main listed French R&D service players in their domestic operations
  • Figure 5 Largest European R&D (internal and external) budgets in 2005
  • Figure 6 Key trends by vertical market
  • Figure 7 The R&D services market in five years
  • Figure 8 The age pyramid in five years: implications for staff augmentation players
  • Figure 9 The impact of offshore: a simplified view
  • Figure 10 Breakdown of R&D spending by vertical in Europe
  • Figure 11 Breakdown of R&D spending by vertical in Europe