Engineering Services Outsourcing Market by Service (Designing, Prototyping, System Integration), Location (Off-Shore, On-Shore), Application - Global Forecast 2024-2030

Engineering Services Outsourcing Market by Service (Designing, Prototyping, System Integration), Location (Off-Shore, On-Shore), Application - Global Forecast 2024-2030

The Engineering Services Outsourcing Market size was estimated at USD 1.63 trillion in 2023 and expected to reach USD 1.88 trillion in 2024, at a CAGR 15.52% to reach USD 4.50 trillion by 2030.

Engineering services outsourcing (ESO) is a business practice where companies subcontract various engineering functions and tasks to external service providers. These service providers, often in different geographic regions or countries, offer engineering services and expertise to support a company's design, development, and engineering processes. ESO is particularly prevalent in industries where engineering is crucial, such as aerospace, automotive, electronics, and manufacturing. The heightened need for cost-effective and efficient operations, increased demand for product innovation and development, rapid technological advancements, and the evolving global regulatory landscape drive market growth. However, communication gaps and the complexities of managing offshore engagements pose challenging factors impacting market growth. The rise of Industry 4.0, emphasizing automation, machine learning, and data exchange, offers possibilities for ESO providers to establish niche areas of expertise and accelerate digital transformation to outsource more of their engineering needs, thus broadening the market scope for ESO.

Regional Insights

The Americas has a significant landscape in engineering services outsourcing (ESO) owing to increased demand for precision engineering services underpinned by advancements in the aerospace and defense sectors. The increasing focus on automation, the advent of Industry 4.0 trends, the surge in green energy projects, propelling the need for specialized engineering services in this sector, and high R&D spending and government incentives significantly fueled the market demand. In the European Union (EU) countries, the automotive industry plays a pivotal role, driving the need for engineering services outsourcing as the demand for electric vehicles has mainly sparked innovative designs requiring specialized engineering skills, which further enhanced the market landscape in the region. Asia Pacific nations showcase developing landscapes due to the constant need for high-quality engineering services across various sectors, prominently manufacturing and electronics. Countries sustain a continuous demand for engineering services due to technological advancement and significant investments in research.

Market Insights

Market Dynamics

The market dynamics represent an ever-changing landscape of the Engineering Services Outsourcing Market by providing actionable insights into factors, including supply and demand levels. Accounting for these factors helps design strategies, make investments, and formulate developments to capitalize on future opportunities. In addition, these factors assist in avoiding potential pitfalls related to political, geographical, technical, social, and economic conditions, highlighting consumer behaviors and influencing manufacturing costs and purchasing decisions.

Market Drivers

Increasing prevalence of advanced IT solutions
Ongoing execution of Industry 4.0 coupled with rising adoption of automated and integrated solutions
Heightened need for cost-effective and efficient operations

Market Restraints

Limited skilled professionals to manage engineering service outsourcing

Market Opportunities

Introduction and development of technologically advanced outsourcing products
Penetration of engineering services outsourcing in the healthcare and industrial sector

Market Challenges

Data and cybersecurity issues with engineering services outsourcing

Market Segmentation Analysis

Service: Penetration of system integration services to synchronize multiple subsystems
Location: High adoption of offshore engineering services outsourcing
Application: Poleferating use in telecom applications providing net design and optimization

Market Disruption Analysis

Porter’s Five Forces Analysis
Value Chain & Critical Path Analysis
Pricing Analysis
Technology Analysis
Patent Analysis
Trade Analysis
Regulatory Framework Analysis

FPNV Positioning Matrix

The FPNV positioning matrix is essential in evaluating the market positioning of the vendors in the Engineering Services Outsourcing Market. This matrix offers a comprehensive assessment of vendors, examining critical metrics related to business strategy and product satisfaction. This in-depth assessment empowers users to make well-informed decisions aligned with their requirements. Based on the evaluation, the vendors are then categorized into four distinct quadrants representing varying levels of success, namely Forefront (F), Pathfinder (P), Niche (N), or Vital (V).

Market Share Analysis

The market share analysis is a comprehensive tool that provides an insightful and in-depth assessment of the current state of vendors in the Engineering Services Outsourcing Market. By meticulously comparing and analyzing vendor contributions, companies are offered a greater understanding of their performance and the challenges they face when competing for market share. These contributions include overall revenue, customer base, and other vital metrics. Additionally, this analysis provides valuable insights into the competitive nature of the sector, including factors such as accumulation, fragmentation dominance, and amalgamation traits observed over the base year period studied. With these illustrative details, vendors can make more informed decisions and devise effective strategies to gain a competitive edge in the market.

Recent Developments

MGS Unveils New Global Engineering Services Group for Healthcare Innovations

MGS introduced its Global Engineering Services Group, uniting over 85 engineers and 200 toolmakers worldwide. This initiative aims to expedite the process for pharma, diagnostic, and medtech leaders from initial ideas to fully validated products and manufacturing systems. This comprehensive assembly facilitates rapid development and commercialization of health care advancements globally.

Introducing DEP MeshWorks 2023: Unleashing the Future of Engineering Simulation

Detroit Engineered Products (DEP) has launched DEP MeshWorks 2023, the latest and most advanced version of MeshWorks. This update brings a host of upgrades, performance enhancements, and innovative features that enhance the user experience. DEP MeshWorks 2023 empowers users with a user-friendly interface, giving them the full power of CAE (Computer-Aided Engineering) right at their fingertips. DEP MeshWorks 2023 introduces key features to streamline the product development cycle and optimize products.

AFRY Acquires KSH - a Canadian Engineering Company Focused On The Process Industries Sector

AFRY has acquired KSH, a Canadian consulting, engineering, and project delivery services company, in alignment with its global expansion strategy in decarbonization, energy, and biobased materials. The collaboration between AFRY and KSH further strengthens AFRY's position as a global engineering company in the pulp and paper industry. Together, both companies establish a robust platform for growth, offering enhanced capabilities and services in process industry sectors.

Strategy Analysis & Recommendation

The strategic analysis is essential for organizations seeking a solid foothold in the global marketplace. Companies are better positioned to make informed decisions that align with their long-term aspirations by thoroughly evaluating their current standing in the Engineering Services Outsourcing Market. This critical assessment involves a thorough analysis of the organization’s resources, capabilities, and overall performance to identify its core strengths and areas for improvement.

Key Company Profiles

The report delves into recent significant developments in the Engineering Services Outsourcing Market, highlighting leading vendors and their innovative profiles. These include Accenture plc, AFRY AB, Airbus SE, Akkodis Group AG, Alten Group, Barton Malow Holdings LLC, Bechtel Corporation, Brasfield & Gorrie, LLC, Capgemini Engineering, Detroit Engineered Products, Entelect Software (Pty) Ltd., EPAM Systems, Inc., Globallogic Inc., HCL Technologies Limited, Infosys Limited, International Business Machines Corporation, Kiewit Corporation, KPIT Technologies Limited, New York Engineers, Quest Global Services Pte. Ltd., RLE International Inc., Strabag SE, Tata Consultancy Services Limited, Tech Mahindra Limited, Wipro Limited, and WPG Consulting LLC.

Market Segmentation & Coverage

This research report categorizes the Engineering Services Outsourcing Market to forecast the revenues and analyze trends in each of the following sub-markets:

Service
Designing
CAD Engineering
CAE Engineering
Prototyping
High-fidelity Prototyping
Low-fidelity Prototyping
System Integration
Testing
Location
Off-Shore
On-Shore
Application
Aerospace
Automotive
Consumer Electronics
Healthcare
Industrial
Semiconductors
Telecom
Region
Americas
Argentina
Brazil
Canada
Mexico
United States
California
Florida
Illinois
New York
Ohio
Pennsylvania
Texas
Asia-Pacific
Australia
China
India
Indonesia
Japan
Malaysia
Philippines
Singapore
South Korea
Taiwan
Thailand
Vietnam
Europe, Middle East & Africa
Denmark
Egypt
Finland
France
Germany
Israel
Italy
Netherlands
Nigeria
Norway
Poland
Qatar
Russia
Saudi Arabia
South Africa
Spain
Sweden
Switzerland
Turkey
United Arab Emirates
United Kingdom

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