Global Engineering R&D Services Outsourcing Market
Engineering R&D Services Outsourcing Market size was valued at USD 314.46 billion in 2024 and is set to exceed USD 2.5 trillion by 2037, expanding at over 17.3% CAGR during the forecast period i.e., between 2025-2037. In the year 2025, the industry size of engineering R&D services outsourcing is evaluated at USD 407.53 billion.
With increasing digitization in almost every country, the competition to attract customers is at an all-time high. With so many options available for consumers, companies need to go out of their way for customer satisfaction to ensure long-term relationships with them. Therefore, the scope for software product testing services is very significant.
Increasing strategic investments by the leading market players are also accelerating the engineering R&D services outsourcing market. For instance, in June 2022, Capgemini announced plans to set up semiconductor design services centers throughout Europe to support Intel's expanded chip manufacturing and ecosystem design services program. This will help enhance the production capacity of next-generation semiconductors in Europe to better support regional enterprises and build resilience in the European semiconductor supply chains, in keeping with the strategic aims of the European Chips Act.
Growth Drivers
Challenges
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Base Year |
2024 |
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Forecast Year |
2025-2037 |
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CAGR |
17.3% |
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Base Year Market Size (2024) |
USD 314.46 billion |
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Forecast Year Market Size (2037) |
USD 2.5 trillion |
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Regional Scope |
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Type (Onshore, Offshore)
The off-shore segment share in the engineering R&D services outsourcing market is estimated to surpass 55% by 2037. Advantages of offshore engineering R&D services, such as accessibility to cheap and talented professionals from several developing nations worldwide and a large pool of service experts, are expected to benefit the growth of offshore engineering R&D services. This type of outsourcing saves considerable time in training individuals and increases overall productivity.
Industry Verticals (Telecommunications, Automotive, Aerospace, Consumer Electronics, Pharmaceuticals, Construction, Semiconductor, Computing Systems)
Engineering R&D services outsourcing market from the automotive segment is expected to garner a significant revenue share of 28% in the year 2037. This can be ascribed to the rising demand for motor vehicles, the expanding desire for industrial robots in the industry of automobiles, and manufacturers' increased emphasis on implementing automation into their production and manufacturing processes as part of their business plan for growth. Engineering services outsourcing in the automotive industry assists in increasing efficiency and reducing overall labor costs and time. As a result, these services are widely employed in commercial, passenger, electric, and hybrid vehicles (EVs/HVs).
Our in-depth analysis of the global market includes the following segments:
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Type |
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Industry Vertical |
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Asia Pacific Market Forecast
Asia Pacific industry is predicted to dominate majority revenue share of 47% by 2037, due to strong presence of engineering R&D services providers in the region. Significant factors in the region include the strong presence of engineering R&D services providers focusing on building a technology ecosystem which will eventually reduce the time taken to market new technologies and meet the uncertainty of capabilities at scale. The availability of cheap engineering R&D services is the primary factor for the growth in the region. The growing population in the area resulted in a surge of demand for innovative and sustainable products across every industry vertical. Manufacturing companies invest heavily in developing connective, creative, and customer-centric products and solutions. This is also one of the crucial traits to aid in regional market growth. Companies in the region are focusing on acquisitions to diversify and increase their global reach to provide onshore outsourcing in developed nations.
For instance, in 2022, HCL Technologies signed a contract to acquire Starschema, a data engineering solutions provider in Budapest, Hungary. This acquisition is expected to boost HCL's capability in digital engineering next-generation offerings. Starschema and HCL is expected to undergo a data-driven revolution with their strategic capabilities. This acquisition is expected to assist HCL in catering to the demand in Central and Eastern Europe engineering R&D outsourcing services.
European Market Statistics
The Europe engineering R&D services outsourcing market also shows promising CAGR growth of 15.39% during the forecast period. The market's expansion may be ascribed primarily to the increased emphasis of engineering service providers (ESPs) on preserving basic engineering procedures, as well as the increasing emphasis on activities involving the remote development of goods. Furthermore, tools such as cloud computing, digital twins, analytics, and AI have become available in the region's technological industries, which are projected to propel market growth as these tools are growing as demand grows for cybersecurity, analytics, and automation.
•HCL Technologies Limited was ranked the No. 1 player in the US in Engineering R&D Services in the annual Zinnov Zones for ER&D 2021 rankings. In addition, the survey recognized HCL Technologies as a leader in worldwide engineering R&D services and digital engineering services.
•Siemens announced the addition of Siemens Xcelerator as a Service (XaaS) along with the launch of Simcenter Cloud HPC. The new service is maintained by Siemens and hosted on AWS (Amazon Web Services), optimized for Simcenter solver technologies, as part of the ongoing partnership between Siemens and AWS.
Author Credits: Shweta Patidar
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