The global engineering services outsourcing market size is projected to reach USD 1.50 trillion by 2025, according to a new report by Grand View Research, Inc. It is anticipated to expand at a CAGR of 29.5% during the forecast period. Engineering Service Providers (ESPs) aid in simplifying the complexities faced by Original Equipment Manufacturers (OEMs) in the development of contemporary products. Tasks such as designing, testing, prototyping, and Product Lifecycle Management (PLM) as well as equipping products with Artificial Intelligence (AI) and IoT-connectivity are often outsourced to ESPs.
Multinational companies based in countries such as U.S., U.K., Germany, and France, among others, are outsourcing advanced technological services to India, South Africa, China, Brazil, Mexico, Russia, and other developing nations due to the cost-benefit and technical proficiency these countries offer. This factor is anticipated to bode well for ESO market growth over the forecast period.
The hazards associated with the breach of Intellectual Property (IP) secrecy has proven to be an obstacle while outsourcing critical tasks to ESPs. Companies have to exert a high degree of vigilance to prevent IP theft, particularly in a few offshore locations where the existing legal enforcements make it difficult to prosecute firms which misuse patents and confidential data.
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Further key findings from the report suggest:
Automotive segment accounted for a revenue share of around 20% in 2018, whereas the telecom engineering services outsourcing market is expected to account for a significant revenue share by 2025
In 2018, Europe accounted for the second-largest revenue share. Asia Pacific, on the other hand, is expected to exhibit the highest CAGR over the forecast period
Along with India, countries such as Ukraine, Poland, and Argentina are emerging as prominent destinations for software-related outsourcing services
Key players in the ESO market include Wipro Limited; Tech Mahindra Limited; Tata Consultancy Services Limited; QuEST Global Services Pte. Ltd.; Luxoft; Infosys Limited; HCL Technologies Limited; GlobalLogic; and EPAM Systems, Inc.
Grand View Research has segmented the global Engineering Services Outsourcing market on the basis of application, location, and region:
ESO Application Outlook (Revenue, USD Billion, 2014 - 2025)
ESO Location Outlook (Revenue, USD Billion, 2014 - 2025)
ESO Regional Outlook (Revenue, USD Billion, 2014 - 2025)
Middle East & Africa (MEA)
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