Market Overview

The global Engineering Services Outsourcing Market was valued at USD 1,922.2 Billion in 2025. It is projected to grow to USD 6,460.5 Billion by 2034, representing a CAGR of 14.42% during the forecast period from 2026 to 2034. Asia Pacific dominates with a 42.1% market share in 2025, driven by skilled engineers, competitive labor costs, and industrial growth.

Study Assumption Years

• Base Year: 2025
• Historical Year/Period: 2020-2025
• Forecast Year/Period: 2026-2034

Engineering Services Outsourcing Market Key Takeaways

• The global market size was USD 1,922.2 Billion in 2025.
• The market is forecasted to grow at a CAGR of 14.42% from 2026 to 2034.
• Asia Pacific accounted for the largest regional share of 42.1% in 2025.
• Onshore outsourcing dominates with 68.7% market share in 2025 due to proximity advantages and local expertise.
• Automotive sector leads application segments with 25.4% market share in 2025.
• The United States holds 87.8% of the North American market share due to adoption of advanced digital technologies.

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Market Growth Factors

The engineering services outsourcing market is on the rise, driven by companies eager to cut down on product development and operational costs. By outsourcing, they can tap into a pool of skilled labor at lower wage levels, especially when moving tasks from high-cost countries. The continuous investment in research and development is creating a demand for advanced products that require a mix of engineering expertise, which outsourcing providers are increasingly able to deliver.

One of the main factors behind this growth is the increasing need for automation tools that make labor-intensive tasks easier while boosting productivity. Research shows that a staggering 94% of companies still engage in repetitive tasks that could be automated, which opens the door for significant productivity improvements for knowledge workers. Automation also speeds up the design, testing, and construction of engineering systems, all while enhancing accuracy.

Another important element is the rising use of digital engineering systems like CAD, CAE, CAM, and EDA software. These technologies improve design accuracy and promote collaboration among teams spread across the globe. Plus, outsourcing offers operational flexibility by reducing infrastructure and staffing expenses. The growing trend of industrial automation and the adoption of integrated engineering solutions are further driving market growth, as businesses invest in scalable manufacturing and work to minimize downtime.

Market Segmentation

By Service:

• Designing
• Prototyping
• System Integration
• Testing: The dominant service ensuring safety, performance, and regulatory compliance through diverse testing types including functional, stress, compliance, and software validation.
• Others

By Location:

• Onshore: Largest segment in 2025 (68.7%), preferred for closer collaboration, better control, and adherence to local regulations.
• Offshore

By Application:

• Aerospace
• Automotive: Leading sector with 25.4% market share in 2025, driven by innovations like electric powertrains, autonomous driving, and connected vehicles.
• Construction
• Consumer Electronics
• Semiconductors
• Pharmaceuticals
• Telecom
• Others

Regional Insights

Asia Pacific is the leading region with a 42.1% market share in 2025, supported by a large pool of skilled engineers, competitive labor costs, rapidly growing industrial sectors like consumer electronics and telecommunications, and government support for digital innovation. Countries like India and China provide affordable, high-quality engineering solutions, making the region an attractive hub for outsourcing.

Recent Developments & News

• March 2025: CGI signed an exclusivity agreement to acquire Apside, a French digital and engineering services firm; expected to close by June 2025.
• December 2024: YRH Inc. and Pinargon Ltd. merged to form an integrated telecommunications engineering service.
• July 2024: Accenture acquired Cientra, a silicon design and engineering services firm, to strengthen its semiconductor innovation capabilities.
• June 2024: Cognizant agreed to provide engineering services to Gentherm with a delivery center and test facility in Hyderabad, India.

Key Players

• Accenture Plc
• Altair Engineering Inc.
• ALTEN
• Cybage Software Pvt. Ltd.
• EPAM Systems Inc.
• HCL Technologies Limited
• Infosys Ltd.
• QuEST Global Services Pte. Ltd.
• Sonata Software Limited
• Tata Consultancy Services Limited
• Tech Mahindra Limited (Mahindra Group)
• Wipro Limited

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