The North America engineering service outsourcing industry size reached around USD 410.4 billion in 2023. Over the forecast period, demand for engineering service outsourcing in North America is projected to expand at 16.8% CAGR, taking the total valuation to USD 1,940.5 billion by 2033.
Engineering service outsourcing is gaining immense traction across North America. This is because it provides a practical solution for several organizations to have access to a low-cost and talented offshore market.
Engineering service outsourcing (ESO) offers a smart and easy resourcing solution that opens up an industry of highly qualified and skilled engineers from worldwide for a fraction of the cost. Several companies across North America choose ESO to reduce costs and get access to specialized expertise.
Drivers Propelling Demand for Engineering Service Outsourcing in North America
Challenges for Companies in the North America Engineering Service Outsourcing
Opportunities in the North America Engineering Service Outsourcing Industry
Latest Trends in North America Engineering Service Outsourcing
| Attributes | Key Insights |
|---|---|
| Current Value (2023) | USD 410.4 billion |
| Projected Value (2033) | USD 1940.5 billion |
| Value CAGR (2023 to 2033) | 16.8% |
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From 2018 to 2022, the North America engineering service outsourcing demand grew at a CAGR of 12.4%. Total valuation in North America at the end of 2023 reached about USD 410.4 billion.
During the historical period, the adoption of designing service outsourcing gained significant traction, and integration with onshore and system integration services became key drivers for its usage. Organizations increasingly embraced the benefits of engineering service outsourcing, which provided impetus for sales growth.
Future Forecast for North America Engineering Service Outsourcing
Over the forecast period, the North America engineering service outsourcing industry is projected to advance at a CAGR of 16.8%. It will likely attain a massive valuation of USD 1,940.5 billion in 2033.
Engineering service outsourcing is undergoing a promising change. Solution providers are evolving to provide shortened development cycles and reduce production costs, enabling engineering services to include improved resource utilization, product innovation, and industry scalability.
Engineering service outsourcing is expected to play an increasingly pivotal role in industries like automotive, semiconductors, and electronics. Hence, the expansion of these industries will uplift the demand for engineering outsourcing services during the forecast period.
Semi-annual Update
| Particular | Value CAGR |
|---|---|
| H1 | 13.3% (2022 to 2032) |
| H2 | 14.4% (2022 to 2032) |
| H1 | 16.4% (2023 to 2033) |
| H2 | 16.8% (2023 to 2033) |
The United States remains the undisputed leader in engineering service outsourcing in North America. As per the latest analysis, the United States engineering service outsourcing industry is projected to expand with 17.6% CAGR, totaling a gigantic valuation of USD 1,587.54 billion in 2033.
Several factors are expected to spur growth of the engineering service outsourcing industry in the United States. These include rising emphasis of industries on reducing operational costs and digital transformation.
The United States leads from the forefront when it comes to adoption of digital technologies like IoT, AI, and cloud computing. High adoption of these technologies is expected to create new opportunities for outsourcing engineering services remotely and collaboratively.
The rapid advancement of communication technologies in the United States is anticipated to improve the engineering service outsourcing industry share. With the continual evolution of communication tools, such as high-speed internet, cloud computing, and collaborative software platforms, United States-based companies can seamlessly connect with engineering service providers.
The enhanced connectivity fosters real-time collaboration, efficient project management, and the swift exchange of information. It is breaking down geographical barriers and enabling United States companies to leverage specialized engineering expertise from around the world.
The section below highlights key segments' estimated value shares and CAGRs, including service type, location, and industry. The information obtained can be crucial for companies to frame their strategies accordingly for maximum profits.
Growth Outlook by Location
| Location | Value CAGR |
|---|---|
| Onshore | 18.4% |
| Offshore | 14.3% |
The onshore segment's significant revenue share in North America engineering service outsourcing (ESO) is due to its geographical proximity. Clients frequently favor onshore outsourcing because of the ease of communication, collaboration, and real-time contact.
Close physical proximity makes face-to-face meetings, site inspections, and a deeper grasp of the local business environment possible, promoting stronger client-vendor connections. Several prominent companies in North America opt for outsourcing on-shore engineering services. As a result, the target segment held a value share of 58.2% in 2023.
Growth Outlook by Service Type
| Service Type | Value CAGR |
|---|---|
| Outsourced Technical Services | 13.3% |
| Designing Services | 20.7% |
| Prototyping Services | 17.1% |
| System Integration Services | 18.7% |
| Testing Services | 14.5% |
| Other Services | 11.5% |
As per the latest North America engineering service outsourcing industry analysis, designing services are expected to witness higher demand across North America during the assessment period. The target segment is projected to thrive at an impressive CAGR of 20.7% between 2023 and 2033.
The surge in demand for comprehensive Product Lifecycle Management (PLM) solutions significantly contributes to the design services segment's growth. Companies are seeking end-to-end support in product development, from concept ideation to retirement, and outsourcing design services has proven instrumental in optimizing the entire product lifecycle.
Growing popularity of engineering design outsourcing is expected to play a key role in boosting the North America industry. Similarly, growing need for reducing cost associated with the complex designing process will foster segment growth.
Growth Outlook by Industry
| Industry | Value CAGR |
|---|---|
| Process Industries | 14.8% |
| Discrete Industries | 18.1% |
Adoption of engineering service outsourcing is expected to remain high in discrete industries like automotive, electronics, and medical devices. This is because these industries are seeking to optimize their operations and stay competitive in the rapidly evolving world.
Automotive manufacturers and suppliers are increasingly turning to outsourcing partners to leverage specialized skills and access cutting-edge expertise. This trend is driven by the need for cost-effective solutions, accelerated product development cycles, and the demand for innovative technologies such as electric and autonomous vehicles.
As industries like automotive continue to pursue innovation, cost-effectiveness, and adaptability, demand for engineering service outsourcing in Norther America is expected to rise significantly. As a result, the discrete industries segment is projected to expand at 18.1% CAGR during the forecast period.
Key players in North America are focusing on offering novel engineering services to meet evolving end user demand. They are also adopting strategies like partnerships, collaborations, mergers, and acquisitions to expand their customer base and strengthen their presence in the region.
Key Developments in the North America Engineering Service Outsourcing Industry
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| Attribute | Details |
|---|---|
| Estimated Value (2024) | USD 410.4 billion |
| Projected Value (2034) | USD 1940.5 billion |
| Expected Growth Rate (2024 to 2034) | 16.8% CAGR |
| Forecast Period | 2023 to 2033 |
| Historical Data Available for | 2018 to 2022 |
| Industry Analysis | USD Billion for Value |
| Key Regions Covered | North America |
| Key Countries Covered | United States, Canada |
| Key Segments Covered | Location, Service Type, Industry, and Country |
| Key Companies Profiled | Wipro Limited; HCL Technologies Ltd. (HCL Enterprises); Capgemini SE; Infosys Limited; Tata Consultancy Services Ltd.; Tech Mahindra Limited; Tata Elxsi Limited; Entelect Software (Pty) Ltd.; AKKA Technologies SE |
| Report Coverage | Industry Forecast, Company Share Analysis, Competition Intelligence, DROT Analysis, Key Dynamics and Challenges, and Strategic Growth Initiatives |
Revenue in North America totaled USD 410.4 billion in 2023.
The North America industry is poised to expand at 16.8% CAGR.
The industry size is set to reach USD 1,940.5 billion in 2033.
Demand in the United States is projected to rise at a CAGR of 17.6%.
Designing services segment is projected to rise at a CAGR of 20.7%.
It is the practice of contracting with external providers to handle certain engineering functions.
| Market Size, 2024 | USD 1,718.94 million |
|---|---|
| Market Size, 2034 | USD 9,544.84 million |
| Value CAGR (2024 to 2034) | 18.70% |
| Market Value in 2024 | USD 50.3 billion |
|---|---|
| Projected Industry Value in 2034 | USD 105.8 billion |
| Value-based CAGR (2024 to 2034) | 7.7% |
| Market Size (2023) | USD 94.38 Billion |
|---|---|
| Market Size (2033) | USD 272.84 Billion |
| Market CAGR (2023 to 2033) | 11.2% |
| Expected Market Value (2023) | USD 19.63 billion |
|---|---|
| Anticipated Forecast Value (2033) | USD 35.2 billion |
| Projected CAGR (2023 to 2033) | 6% |
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Engineering Service Outsourcing Industry Analysis in North America
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