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The integration of Industry 4.0 with big data analysis in various industries and the increasing trend of Digitalization, Automation and Robotics with use of AI will support the growth of engineering services outsourcing market across the globe over the forecast period. According to the International Data Corporation (IDC), Internet of Things (IoT) spending in the European region will surpass US$ 241 billion by 2022 as in 2019 Germany spent US$ 35 billion in IoT followed by France and UK with a spending of US$ 25 billion in IoT sector and Canada’s spending on IoT achieved as high as US$ 6.5 billion (Canadian) in 2018, representing an increase from US$ 2.8 billion since 2013.
The global engineering services outsourcing market is estimated to grow at a CAGR of 17.7% during the forecast period of 2021 to 2027.
The global engineering service outsourcing market was valued at US$ 1430.7 Bn and expected to record a revenue of US$ 3,803.21 Bn by the end of the year 2027. Some companies in the global engineering services outsourcing market are Capgemini, Alten, HCL Technologies, and AVL. The cumulative share of four major companies is 28.7% in which Capgemini leads the market. The market is observed to be monopolistic competition in nature and is projected to shift towards high competition nature in the forecast period. As players have increased their competitive advantage by making the implementation easier and faster, to reduce overlap and switching costs.
The engineering services and outsourcing market faced negative impacts during covid – 19 outbreaks. As the market varied depending on the end-use industries and industry verticals. Various industrial facilities, manufacturing plants, and public transport were temporarily shut down as part of the efforts to arrest the spread of the disease, resulting, incumbents of industries and industry verticals, such as automotive and construction, had to confront a downturn in demand. However, sales of personal vehicles are expected to increase soon as people prefer avoiding public transport in the wake of the COVID-19 pandemic.
Global Engineering Services Outsourcing Market by Services Type
As per the researcher, in 2021, product designing segment holds the largest share of 22%. The production designing segment was valued at US$ 311.8 billion in 2021 and is expected to grow at an annual growth rate of 16.5% during the forecast period. The reason behind rapid growth is the new technologies and creative methods together is transforming product design. Small business and new age startups with limited expertise strongly rely on outsourcing product development in emerging sectors like automotive, electronics which is a key factor for the growth of the segment in the future.
As per the research report published in Astute Analytica, plant automation and enterprise asset management segment are projected to grow at an increasing compounded annual growth rate when compared to other segments during the forecast period. As automation has forced the industries to delegate more task to machines and improve their efficiency and enhance return on assets.
Regional Analysis of Global Engineering Services Outsourcing Market
The study of global engineering services outsourcing market tracks regions such as North America, Europe and Asia Pacific.
As per regional analysis, the North America and Europe market are ruling the global engineering service outsourcing market. As Europe software development services market is growing. The shortage of skilled software developers and increasing demand for digital transformation drives the growth and North America’s adoption of cloud services and R&D investment on new technologies are the major factor for its future growth.
As per the research study, the Asia Pacific engineering services outsourcing market is projected to grow at a faster rate, by exhibiting the CAGR of 19.9%, owing to emerging local outsourcing demand, strong manufacturing base, and cost arbitrage in developing countries, such as China and India are the major growth drivers of the Asia-Pacific engineering services outsourcing market.
Market Dynamics of Global Engineering Services Outsourcing Market
The global engineering services outsourcing market is segmented into following categories:
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