Global Engineering Services Outsourcing Market Research 2022: Manufacturer Landscape, Production Value, Industry Research And Growth Analysis 2029

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The global Engineering Services Outsourcing (ESO) market was valued at US$798.7billion in 2021 and is estimated to grow at a compound annual growth rate (CAGR) of 18.9% between 2022 and 2029. The growing collaboration between Engineering Service Providers (ESPs) and Original Equipment Manufacturers (OEMs) is expected to increase the adoption of engineering services outsourcing (ESO) during the forecast period.

Engineering Services Outsourcing (ESO) refers to outsourcing technology and services related to engineering activities such as designing, prototyping, system integration, testing, and consultation to specialized vendors or ESPs.

AgileIntel’s global Engineering Services Outsourcing market study is a 157 pages report containing in-depth analysis on historical and forecasted spending patterns in the sector. The study offers granular value data from a global, regional, application, service type, and location perspective.

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The base year is 2021 for the ...
... study with historical data between 2018 and 2021. The data forecast has been provided for the years between 2022 and 2029.

Key insights from the Global Engineering Services Outsourcing report

Insights on Service Type:

The ESO market service type includes designing, prototyping, system integration, testing, and others.

The testing segment held the largest share of over 31% of the global revenue in 2021. The growing demand to reduce turnaround time by minimizing manual intervention is expected to drive the growth of the testing segment in recent years. Also, OEMs hire software testing services from ESPs to develop and redesign product models with higher compatibility and bug-free operations.

Furthermore, the designing segment is anticipated to grow significantly during the forecast period. The growing design complexities and the need to reduce costs by outsourcing design to a skilled and low-cost workforce drive the growth of design engineering outsourcing. The increasing demand for architectural, visual, graphic, and industrial designing for advanced equipment and mobility solutions is expected to increase the demand for design engineering during the forecast period. Additionally, the rising demand for consumer electronics has propelled the growth of outsourcing engineering services for prototyping cost-efficient products. Countries like the USA, Canada, Japan, and China are driving the prototyping segment's growth globally.

Insights on Application:

The end-use application of the ESO market includes aerospace, automotive, industrial, consumer electronics, semiconductors, healthcare, telecom, and others.

The industrial segment dominated the ESO market, registering a revenue share of over 61% in 2021, and is expected to continue doing so during the forecast period. Digitization in exploration services, including drilling, blasting, crushing, and tunneling, is increasing the adoption of ESO in this sector. The industrial sector extensively implements cloud infrastructure to modernize its IT infrastructure, drive automation, and streamline processes. Additionally, the deployment of the industrial internet of things (IIoT) to reduce downtimes, detect and prevent errors, and cut maintenance costs is expected to drive the industrial segment growth.

Furthermore, the healthcare segment is estimated to be the fastest-growing segment, with a CAGR of around 30% during the forecast period. The growing investment in advanced medical equipment, laboratories, and medications is driving the segment growth in recent years. The segment witnessed an upsurge in the past few months to develop drugs and vaccines during the COVID-19 pandemic. Healthcare organizations collaborate with the ESPs to increase their clinical proficiency and reduce operational costs. For instance, in August 2020, PRA Health Sciences' data solutions division, Symphony Health, collaborated with Close-Up International, a provider of sales audits and medical prescriptions, to expand its data services worldwide.

Impact of COVID-19

The COVID-19 pandemic has had a diverse effect on the ESO market as the outsourcing of services was negatively impacted in specific industries such as automotive and industrial. Meanwhile, there was an increase in demand for ESO services from the healthcare sector.

The COVID-19 pandemic adversely affected some major economies and has undoubtedly disrupted the ESO market's supply chain in these industries. Temporary work shutdowns, travel restrictions, 'shelter-in-place' norms, and disruption in trade activities are certain factors that have subsequently affected the ESO industry. On the contrary, the rapid developments in the healthcare sector, especially in the pharmaceutical and medical device manufacturing domains, witnessed a boom because of the increased efforts to arrest the COVID-19 spread worldwide.

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