The global engineering services outsourcing market
is expected to reach USD 415.74 billion by 2020. Rising cost pressures
on firms leading to constrained R&D budgets is expected to be a
primary growth driver for the industry. Companies prefer to outsource
the service as it enhances efficiency, improves processes, lowers time
to market products. In addition, it yields cost advantages which in turn
relates to profit maximization. In addition, dynamic consumer buying
behavior leading to shorter product life cycle is projected to fuel
market growth.
High
competition among leading companies has given rise to cost reduction
across companies in several industries including consumer electronics
and automotive. In order to reduce costs, companies have initiated
augmenting their capabilities by utilizing outsourced IT services. This
further leads to cost minimization thus benefiting the company in the
long run. Outsourcing engineering services allow businesses to get the
most out of constrained budgets and focus on more critical issues.
However, the threat of intellectual property theft is expected to hinder
industry growth.
Demand
for engineering services outsourcing in telecom sector accounted for
over 19% of the overall market in 2013. Growing dominance of telecom
sector is attributed to the integration of business and operations
support systems which require significant back-end equipment and
expertise by the telecom industry.
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Increasing
demand for consumer electronic products has resulted in leading
companies expanding their service portfolio. However, smaller market
players owing to their cost constraints heavily rely on engineering
services outsourcing to cater growing demand. As a result, the segment
is expected to witness the highest growth among other application over
the projected period. Key engineering services required for
manufacturing these consumer electronic devices such as embedded
software development, design & testing, and development &
testing are increasingly outsourced to ESO vendors, thus driving
industry growth.
Asia
Pacific demand for engineering services outsourcing was valued at over
USD 44 billion in 2013 and is expected to experience substantial growth
over the forecast period. Growth can be attributed to strong
manufacturing base in the region and presence of a large talent pool.
Emerging economies including India and China are projected to be leading
growth in the region.
Europe
is expected to grow at a CAGR of more than 25% over the period of six
years owing to a high inclination among European firms to outsource
engineering activities with the same country or within western European
nations to ensuring regulatory compliance.
Key
players in the industry include Tata ELXSI, QuEST Global, HCL
Technologies Ltd, Tata Consultancy Services, Wipro, MindTree Ltd., and
Infosys Ltd. Other companies include Aricent Group, VanceInfo
Technologies Inc., Corp., Infotech Enterprises Ltd., Global Logic, EPAM
Services, Cybage Software Pvt. Ltd., KPIT Cummins Infosystems Ltd.,
IGATE, and Calsoft Labs.
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Grand View Research has segmented the global engineering services outsourcing market on the basis of end-use and region:
ESO End-Use Outlook (Revenue, USD Billion, 2012 - 2020)
• Aerospace
• Automotive
• Construction
• Consumer Electronics
• Semiconductors
• Pharmaceuticals
• Telecom
• Others
ESO Regional Outlook (Revenue, USD Billion, 2012 - 2020)
• North America
• Europe
• Asia Pacific
• ROW
• Aerospace
• Automotive
• Construction
• Consumer Electronics
• Semiconductors
• Pharmaceuticals
• Telecom
• Others
ESO Regional Outlook (Revenue, USD Billion, 2012 - 2020)
• North America
• Europe
• Asia Pacific
• ROW
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View Research, Inc. is a U.S. based market research and consulting
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