Engineering Services Outsourcing Market Analysis, Growth And Forecasts To 2020: Hexa Research

The global Engineering Services Outsourcing market (ESO) is expected to exhibit considerable growth over the forecast period. This can be attributed to constrained R&D budget due increased cost pressures. Dynamic consumer behavior resulting in shorter product life cycles is also expected to favorably impact engineering services outsourcing market growth. In addition, several factors including improvement in processes, enhanced efficiency, reduced time-to-market and cost advantage may also spur engineering services outsourcing market growth over the next few years. Aerospace and automotive OEMs (Original Equipment Manufacturers) emphasize on increasing and strengthening associations and tie-ups with engineering services outsourcing vendors due to the need to focus on crucial R&D activities. Security threats and issues pertaining to confidentiality that primarily revolve around intellectual property (IP) may pose a challenge to engineering services outsourcing market growth.

Several industries including telecom, pharmaceuticals, semiconductors, consumer electronics, automotive, construction and aerospace outsource their specific engineering tasks. Engineering services outsourcing vendors cater to diverse requirements of the aforementioned industries, which thereby drives the market growth. Aero engines design, aero systems & interiors, aero structures design, avionics and manufacturing are a few solutions provided by ESO vendors to the aerospace companies.

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Consumer electronics is expected to emerge as a fast growing end-use segment, which can be attributed to reduction in product life cycles and growing need for faster product innovation. ESO demand across the pharmaceutical sector due to availability of several solutions such as ideation, prototyping, packaging, value analysis and preclinical testing is also expected to positively impact engineering outsourcing services market growth.

In 2013, engineering outsourcing services demand in the telecom industry accounted for over 20% of the overall market share. Telecom service providers implement operations and business support systems (BSS) to ensure smooth business operations, which makes significant back-end expertise and equipment a primary requirement, thus driving the adoption of ESO in systems. Solutions offered by ESO vendors for the telecom industry include design, network testing, implementation, deployment and support of Geographic Information Systems (GIS) systems, cloud engineering services, network provisioning, product lifecycle management (PLM) and value added services.

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