Global Engineering Services Outsourcing Industry

Global Engineering Services Outsourcing Industry

  • July 2022 •
  • 306 pages •
  • Report ID: 5960687 •
  • Format: PDF
Abstract:

What`s New for 2022?
- Global competitiveness and key competitor percentage market shares
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Global Engineering Services Outsourcing Market to Reach US$2 Trillion by the Year 2026
- Engineering Services Outsourcing (ESO) is the process of hiring different non-physical engineering functions, including designing, prototyping, testing, and system integration, from an external source. Engineering services include the services required at each phase of the lifecycle of the product, from conceptualization to end of product life. Growing industrial automation and increasing implementation of integrated solutions for designing and analyzing engineering systems are the major factors driving the growth of the ESO market. In addition, widespread use of innovative systems such as electronic design automation (EDA) software, computer-aided design (CAD), computer-aided engineering (CAE), and computer-aided manufacturing (CAM) is also driving the market growth. These engineering systems and software could be operated through mobile devices such as tables, smartphones, and laptops of users and help in increasing the overall efficiencies of production processes. The growing penetration of these mobile devices increased the accessibility and ease-of-use of engineering software. The market is also boosted by the introduction of cloud-based engineering software solutions. Other factors driving the growth of the market include technological advancements and increasing incorporation of the emerging digital transformational services. Another key factor driving the market growth is cost savings enabled by reduction in labor wages.
- Amid the COVID-19 crisis, the global market for Engineering Services Outsourcing estimated at US$1 Trillion in the year 2022, is projected to reach a revised size of US$2 Trillion by 2026, growing at a CAGR of 15.1% over the analysis period. Testing, one of the segments analyzed in the report, is projected to grow at a 16% CAGR to reach US$791.2 Billion by the end of the analysis period. After a thorough analysis of the business implications of the pandemic and its induced economic crisis, growth in the Designing segment is readjusted to a revised 17% CAGR for the next 7-year period. This segment currently accounts for a 23.9% share of the global Engineering Services Outsourcing market. The rising demand for testing services to reduce turnaround time by minimizing manual intervention is expected to drive the growth of the testing segment. Growth in the Designing segment is attributed to the increasing design complexities and the need to reduce costs through outsourcing designing to a relatively low-cost, yet skilled workforce. Growing popularity of architectural, visual, graphic, and industrial designing for next-generation equipment and mobility solutions is expected to drive demand for design engineering outsourcing.

The U.S. Market is Estimated at $ 243.6 Billion in 2022, While China is Forecast to Reach $281.6 Billion by 2026
- The Engineering Services Outsourcing market in the U.S. is estimated at US$243.6 Billion in the year 2022. The country currently accounts for a 23.3% share in the global market. China, the world`s second largest economy, is forecast to reach an estimated market size of US$281.6 Billion in the year 2026 trailing a CAGR of 20.4% through the analysis period. Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at 12% and 15.4% respectively over the analysis period. Within Europe, Germany is forecast to grow at approximately 12.7% CAGR while Rest of European market (as defined in the study) will reach US$339.7 Billion by the end of the analysis period. The Asia-Pacific region dominates market growth due to increasing demand for local outsourcing, cost arbitrage, and strong manufacturing bases in developing nations such as China and India in the region. In North America, growth is driven by the number of ESO agreements signed by leading US-based companies with service providers located in emerging low-cost countries. South America is another key market as it is one of the most preferred locations for offshore outsourcing for several US-based manufacturers and suppliers. Another key factor driving the market growth is the region`s wage inflation, which is more stable compared to many other offshore locations.

Prototyping Segment to Reach $379 Billion by 2026
- The rapid rise in sales of consumer electronics industry has contributed considerably to the rise in demand for third party engineering services for prototyping of cost efficient products. In the global Prototyping segment, USA, Canada, Japan, China and Europe will drive the 14.5% CAGR estimated for this segment. These regional markets accounting for a combined market size of US$109.1 Billion will reach a projected size of US$276.9 Billion by the close of the analysis period. China will remain among the fastest growing in this cluster of regional markets. Led by countries such as Australia, India, and South Korea, the market in Asia-Pacific is forecast to reach US$85 Billion by the year 2026.

Select Competitors (Total 55 Featured) -
  • ALTEN Group
  • AVL List GmbH
  • Cybage Software Pvt. Ltd.
  • Cyient Ltd.
  • Dalian Wensi Haihui Information Technology Co., Ltd (Pactera)
  • FEV Consulting GmbH
  • GlobalLogic
  • HCL Technologies Limited
  • HORIBA, Ltd.
  • Infosys Limited
  • Mindtree Ltd.
  • P3 group GmbH
  • QuEST Global Services Pte. Ltd.
  • Wipro Limited