Engineering Service Outsourcing Industry Analysis in North America
Analyzing Engineering Service Outsourcing Demand Outlook in North America by Designing and Testing Services, 2023 to 2033
Combination of Cost Saving, Improved Efficiency, and Access to Talent Making Engineering Service Outsourcing Compelling Proposition for Companies across North America
North America Engineering Service Outsourcing Industry Outlook for 2023 and 2033
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
Gaining access to domain-specific expertise for diverse engineering needs.
Mitigating legal and regulatory support for industry standards
Collaborative risk management for successful project outcomes.
Rising adoption of offshore engineering services as well as onshore ones
Challenges for Companies in the North America Engineering Service Outsourcing
Lack of skilled engineering workers affecting project deadlines and product quality.
Data security and compliance with data privacy.
Talent shortages impacting project timelines and quality of deliverables.
Opportunities in the North America Engineering Service Outsourcing Industry
Providing engineering services that are designed to meet the needs of SMEs.
Cooperation in transportation, utility, and urban development engineering.
Customize your report by selecting specific countries or regions and save 30%!
2018 to 2022 Engineering Service Outsourcing Demand Outlook in North America
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)
Adjacent North America Engineering Service Outsourcing Industries
Related Industry Growth Outlook Scenario
Particulars
Value CAGR
North America Engineering Service Outsourcing
16.8%
Automotive Engineering Service Outsourcing
11.2%
ATM Outsourcing Service
6%
The following section provides key attributes of the industries related to the North America engineering service outsourcing industry. These include the ATM outsourcing service industry and the automotive engineering service outsourcing industry. Drivers and trends are thoroughly analyzed to find business opportunities in all these industries.
Among the mentioned industries, the North America engineering service outsourcing industry is projected to expand more than the other two. This is attributable to the expanding industrial sector, growing adoption of digital technologies, and presence of leading engineering service outsourcing companies.
The automotive engineering service outsourcing industry will gain from increasing demand for electric and autonomous vehicles and rising popularity of CAD/CAM outsourcing in the automotive sector. On the other hand, the growing need to reduce operational costs will likely benefit the ATM outsourcing service industry.
North America Engineering Service Outsourcing Industry Analysis:
Attributes
North America Engineering Service Outsourcing Demand Analysis
CAGR (2023 to 2033)
16.8%
Growth Factor
Rising emphasis on reducing operational costs is expected to boost growth of the engineering service outsourcing industry in North America.
Key Trend
Ongoing digital transformation is expected to drive demand for engineering service outsourcing in North America through 2033.
Automotive Engineering Service Outsourcing Outlook:
Attributes
Automotive Engineering Service Outsourcing Industry Analysis
CAGR (2023 to 2033)
11.2%
Growth Factor
The growing focus of automotive companies on reducing overall costs and improving product quality is expected to propel demand for outsourcing automotive engineering services.
Key Trend
The rising popularity of autonomous vehicles and the adoption of novel technologies like ADAS are key trends impacting sales growth.
ATM Outsourcing Service Industry Analysis:
Attributes
ATM Outsourcing Service Industry Outlook
CAGR (2023 to 2033)
6.0%
Growth Factor
Rising adoption of ATM outsourcing services across regions like North America and Europe is expected to boost the industry.
Key Trend
The increasing focus of banks to reduce operational costs will fuel demand for ATM outsourcing services through 2033.
Find your sweet spots for generating winning opportunities in this market.
Country-wise Insights
United States to Remain at the Epicenter of Growth
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.
Category-wise Insights
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.
The onshore segment is projected to record a CAGR of 18.4% during the forecast period.
The designing services category is poised to expand at a higher CAGR of 20.7% between 2023 and 2033.
Thriving at an 18.1% CAGR, discrete industries are expected to create lucrative revenue-generation opportunities for engineering service providers.
Onshore Segment to Hold a Prominent Revenue in 2033
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.
Demand to Remain High for Designing Services in North America
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.
Discrete Industries to Present Lucrative Prospects for Companies
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.
Get the data you need at a Fraction of the cost
Personalize your report by choosing insights you need and save 40%!
Competitive Landscape
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
In 2023, L&T Technology Services Limited announced the acquisition of the Smart World & Communication (SWC) Business of L&T.
In 2021 Hitachi acquired Global Logic Inc., a leading United States-based digital engineering services company.
Scope of the Report
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 and 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
Segmentation of the North America Engineering Service Outsourcing Industry
By Location:
On shore
Off shore
By Service Type:
Outsourced Technical Services
Designing Services
Prototyping Services
System Integration Services
Testing Services
Other Services
By Industry:
Process Industries
Food & Beverages
Chemicals
Pharmaceuticals
Oil & Gas
Metals
Paper & Pulp
Others
Discrete Industries
Automotive
Semiconductors & Electronics
Aerospace & Defense
Medical Devices
Others
By Country:
United States
Canada
Frequently Asked Questions
How big is the engineering service outsourcing industry in North America?
Revenue in North America totaled US$ 410.4 billion in 2023.
What is the outlook for the engineering service outsourcing industry?
The North America industry is poised to expand at 16.8% CAGR.
What is the expected size of the engineering service outsourcing industry?
The industry size is set to reach US$ 1,940.5 billion in 2033.
What is the demand outlook for the United States industry?
Demand in the United States is projected to rise at a CAGR of 17.6%.
Which services segment is estimated to witness impressive growth?
Designing services segment is projected to rise at a CAGR of 20.7%.
What is engineering service outsourcing?
It is the practice of contracting with external providers to handle certain engineering functions.
Table of Content
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 Used14. Research Methodology
List of Tables
Table 01: Industry Value (US$ billion) Analysis and Forecast (2018 to 2033) by Location
Table 02: Industry Value (US$ billion) Analysis and Forecast (2018 to 2033) by Service Type
Table 03: Industry Value (US$ billion) Analysis and Forecast (2018 to 2033) by Industry
Table 04: Industry Value (US$ billion) Analysis and Forecast (2018 to 2033) by Industry
Table 05: Industry Value (US$ billion) Analysis and Forecast (2018 to 2033) by Country
Table 06: United States Industry Value (US$ billion) Analysis and Forecast (2018 to 2033) by Location
Table 07: United States Industry Value (US$ billion) Analysis and Forecast (2018 to 2033) by Service Type
Table 08: United States Industry Value (US$ billion) Analysis and Forecast (2018 to 2033) by Industry
Table 09: United States Industry Value (US$ billion) Analysis and Forecast (2018 to 2033) by Industry
Table 10: Canada Industry Value (US$ billion) Analysis and Forecast (2018 to 2033) by Location
Table 11: Canada Industry Value (US$ billion) Analysis and Forecast (2018 to 2033) by Service Type
Table 12: Canada Industry Value (US$ billion) Analysis and Forecast (2018 to 2033) by Industry
Table 13: Canada Industry Value (US$ billion) Analysis and Forecast (2018 to 2033) by Industry
List of Charts
Figure 01: Industry Absolute $ Opportunity (US$ billion), 2018 to 2033
Figure 02: Industry Value (US$ billion), 2018 to 2022
Figure 03: Industry Value (US$ billion), 2023 to 2033
Figure 04: Industry: Industry Share Analysis, by Location – 2023 to 2033
Figure 05: Industry: Y-o-Y Growth Comparison, by Location, 2023 to 2033
Figure 06: Industry: Industry Attractiveness, by Location
Figure 07: Industry: Industry Share Analysis, by Service Type – 2023 to 2033
Figure 08: Industry: Y-o-Y Growth Comparison, by Service Type, 2023 to 2033
Figure 09: Industry: Industry Attractiveness, by Service Type
Figure 10: Industry: Industry Share Analysis, by Industry – 2023 to 2033
Figure 11: Industry: Y-o-Y Growth Comparison, by Industry, 2023 to 2033
Figure 12: Industry: Industry Attractiveness, by Industry
Figure 13: Industry: Industry Share Analysis, by Country – 2023 to 2033
Figure 14: Industry: Y-o-Y Growth Comparison, by Country, 2023 to 2033
Figure 15: Industry: Industry Attractiveness, by Country
Figure 16: United States Industry Absolute $ Opportunity (US$ billion), 2018 to 2033
Figure 17: Canada Industry Absolute $ Opportunity (US$ billion), 2018 to 2033
