The North America engineering service outsourcing industry size reached around US$ 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 US$ 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) | US$ 410.4 billion |
| Projected Value (2033) | US$ 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 US$ 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 US$ 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 US$ 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.
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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) | US$ 410.4 billion |
| Projected Value (2034) | US$ 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 | US$ 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 US$ 410.4 billion in 2023.
The North America industry is poised to expand at 16.8% CAGR.
The industry size is set to reach US$ 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.
1. Executive Summary
1.1. North America Industry Outlook
1.2. Demand Side Trends
1.3. Supply Side Trends
1.4. Analysis and Recommendations
2. Industry Overview
2.1. Industry Coverage / Taxonomy
2.2. Industry Definition / Scope / Limitations
3. Pricing Analysis
3.1. Pricing Models
3.1.1. Subscription-based
3.1.2. Pay-as-you-go
4. Key Use Cases - Engineering Service Outsourcing
4.1. Product Design and Development
4.2. Manufacturing Support
4.3. Software and IT Services
4.4. Research and Development (R&D)
4.5. Embedded Systems and IoT
4.6. Structural and Civil Engineering
4.7. Environmental and Sustainability Services
4.8. Prototyping and Testing
4.9. Technical Documentation and Training
5. Industry Background
5.1. Macro-Economic Factors
5.2. Forecast Factors - Relevance & Impact
5.3. Value Chain
5.4. COVID-19 Crisis – Impact Assessment
5.4.1. Current Statistics
5.4.2. Short-Mid-Long Term Outlook
5.4.3. Likely Rebound
5.5. Industry Dynamics
5.5.1. Drivers
5.5.2. Restraints
5.5.3. Opportunity
5.5.4. Key Trends
6. Industry Demand (in Value or Size in US$ billion) Analysis 2018 to 2022 and Forecast, 2023 to 2033
6.1. Historical Industry Value (US$ billion) Analysis, 2018 to 2022
6.2. Current and Future Industry Value (US$ billion) Projections, 2023 to 2033
6.2.1. Y-o-Y Growth Trend Analysis
6.2.2. Absolute $ Opportunity Analysis
7. Industry Analysis 2018 to 2022 and Forecast 2023 to 2033, by Service Type
7.1. Introduction / Key Findings
7.2. Historical Industry Size (US$ billion) Analysis by Service Type, 2018 to 2022
7.3. Current and Future Industry Size (US$ billion) Analysis and Forecast by Service Type, 2023 to 2033
7.3.1. Outsourced Technical Services
7.3.2. Designing Services
7.3.3. Prototyping Services
7.3.4. System integration Services
7.3.5. Testing Services
7.3.6. Other Services
7.4. Industry Attractiveness Analysis by Service Type
8. Industry Analysis 2018 to 2022 and Forecast 2023 to 2033, by Location
8.1. Introduction / Key Findings
8.2. Historical Industry Size (US$ billion) Analysis by Location, 2018 to 2022
8.3. Current and Future Industry Size (US$ billion) Analysis and Forecast by Location, 2023 to 2033
8.3.1. Onshore
8.3.2. Offshore
8.4. Industry Attractiveness Analysis by Location
9. Industry Analysis 2018 to 2022 and Forecast 2023 to 2033, by Industry
9.1. Introduction / Key Findings
9.2. Historical Industry Size (US$ billion) Analysis by Industry, 2018 to 2022
9.3. Current and Future Industry Size (US$ billion) Analysis and Forecast by Industry, 2023 to 2033
9.3.1. Process Industries
9.3.1.1. Food & Beverages
9.3.1.2. Chemicals
9.3.1.3. Pharmaceuticals
9.3.1.4. Oil & Gas
9.3.1.5. Metals
9.3.1.6. Paper & Pulp
9.3.1.7. Others
9.3.2. Discrete Industries
9.3.2.1. Automotive
9.3.2.2. Semiconductors & Electronics
9.3.2.3. Aerospace & Defense
9.3.2.4. Medical Devices
9.3.2.5. Others
9.4. Industry Attractiveness Analysis by Industry
10. Industry Analysis 2018 to 2022 and Forecast 2023 to 2033, by Country
10.1. Introduction / Key Findings
10.2. Historical Industry Size (US$ billion) Analysis by Country, 2018 to 2022
10.3. Current and Future Industry Size (US$ billion) Analysis and Forecast by Country, 2023 to 2033
10.3.1. United States
10.3.2. Canada
10.4. Industry Attractiveness Analysis by Country
11. Industry Structure Analysis
11.1. Industry Analysis by Tier of Companies
11.2. Industry Share Analysis by Players
12. Competition Analysis
12.1. Competition Dashboard
12.2. Key Matrices & Analysis, By Competitors
12.3. Scale of Competition
12.4. Ranking of Key Vendors, By Key Criteria
12.4.1. By Solution Capabilities
12.4.2. By Business Expertise Outlook
12.5. Matrices for Industry Footprint/Coverage, By Vendors
12.6. Competition Deep Dive
12.6.1. Business Overview
12.6.2. Service Type Portfolio and Strengths
12.6.3. Key Financials (Funding, Revenue Growth)
12.6.4. Key Clients Footprint
12.6.5. Go-to-Industry Approach & Strategies
12.6.6. Recent Developments (Partnerships, Alliances, etc.)
12.7. Major Vendors
12.7.1. HCL Tech
12.7.2. Pasona
12.7.3. Sekkei Solutions Co. Ltd.
12.7.4. CAD Outsourcing
12.7.5. Tech Mahindra
12.7.6. ALTEN GROUP
12.7.7. TCS
12.7.8. Wipro
12.7.9. Infosys
12.7.10. IBM
12.7.11. EPAM Systems
12.7.12. Cognizant
12.7.13. KPIT Technologies
12.7.14. Cyient
12.7.15. Entelect
13. Assumptions and Acronyms Used
14. Research Methodology
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Engineering Service Outsourcing Industry Analysis in North America
