The global engineering services outsourcing market is anticipated to expand at a promising rate from 2021 to 2031 (forecast period). The increased collaboration between Original Equipment Manufacturers (OEMs) and engineering services outsourcing (ESO) is a major aspect expected to drive the global engineering services outsourcing market. Benefits such as globalization of R&D activities, technological disruptions, reduced costs, and talent constraints are also expected to boost the engineering services outsourcing market during the forecast period.
Engineering outsourcing services have progressed over the previous few decades, from offering engineering services from headquarters to establishing important operations in multiple nations. Furthermore, globalization has compelled industry participants to prioritize the adaption of the global delivery ecosystem in their operations. The adoption of numerous technologies such as cloud, automation, analytics, and IoT has widened the product portfolios of industry participants. Moreover, service providers are improving their digital capabilities to meet shifting consumer demand. Such factors are expected to propel the global engineering services outsourcing market.
Engineering Services Outsourcing Market – Competitive Landscape
Key players operating in the global engineering services outsourcing market are Boston Engineering Corporation, Tata Consultancy Services Limited, Infosys Limited, ALTEN Group, Altair Engineering, Inc., ALTRAN. These players are focusing heavily on mergers and acquisitions and enhancing current relationships with their clients in order to capitalize on new business prospects.
For example, Tata Consultancy Services Limited, an Indian global IT services and business solutions provider, acquired 100% of the shares of Postbank Systems AG, one of Germany’s largest IT service providers, from Deutsche Bank AG in November 2020. Tata Consultancy Services Limited is currently a valued IT service provider for Deutsche Bank AG. The acquisition was intended to reinforce the partnership while also allowing the company to expand its operations in Germany.
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Engineering Services Outsourcing Market – Trends and Opportunities
Growing industrial automation and the increasing adoption of integrated solutions for evaluating and designing engineering systems are expected to drive the global engineering services outsourcing market. Furthermore, the growing use of engineering systems such as computer-aided design (CAD), computer-aided manufacturing (CAM), computer-aided engineering (CAE), and electronic design automation (EDA) software is anticipated to propel the global market. These software help improve the overall efficiency of manufacturing operations and can be accessed via laptops, smartphones, and tablets.
Moreover, the global engineering services outsourcing market is likely to gain from technical improvements and the introduction of digital transformational services. Original Equipment Manufacturers (OEMs) are incorporating smart manufacturing systems, robotics, and artificial intelligence (AI)-based solutions for improved product modeling and detailing, which is projected to contribute to the global market growth. Furthermore, increased use of strategic outsourcing services by the marine, automotive, and offshore sectors and the advent of 3D printing solutions are expected to propel the global engineering services outsourcing market even further during the forecast period.
The COVID-19 outbreak and the accompanying lockdowns enacted in many nations around the world to stop the spread of the virus had varying effects on the global engineering services outsourcing market depending on the end-use industry. For example, automotive and aerospace industries were negatively affected as a result of the temporary closure of production units, industrial facilities, public transit, and logistical activities. The pharmaceutical and healthcare industries, on the other hand, were mostly unscathed, with healthcare businesses focusing on the creation of upgraded testing kits and personal protective equipment (PPE), while pharmaceutical companies focused on the development of COVID-19 vaccines.
Engineering Services Outsourcing Market – Regional Landscape
The engineering services outsourcing market in Asia Pacific is expected to witness massive growth during the forecast period. Asia Pacific is a hub for industrial products manufacturing and employing low-cost engineering services offered by highly experienced engineers. The region is also home to a number of well-known software outsourcing service firms. The regional market is projected to flourish due to the growing requirement for technological innovation and the ongoing integration of embedded software into existing models.
The North America engineering services outsourcing market is expected to develop at a rapid pace over the forecast period. The United States is a major production hub for construction, aerospace, and automotive. The significant number of ESO contracts made by US-based enterprises with service providers in low-cost countries is expected to aid the engineering services outsourcing market in North America over the projection period.