In many cases, because the company are unable to control all aspects of the business process, the company hires another company to perform tasks and handle the business usually completed by the company\'s own employees. This business activity is called engineering R&D outsourcing.
The three common types of engineering R&D outsourcing are mechanical engineering outsourcing, embedded IT engineering outsourcing and software outsourcing. Mechanical engineering R&D outsourcing means that corporate customers hire professional machinery service providers with technical expertise, project management skills and business awareness to conduct design and development, and provide corporate customers with a full range of mechanical design technical services to enhance their technical advantages and reduce development costs the behavior of. Embedded IT engineering outsourcing is the outsourcing of part or all of the information technology services of enterprises and individuals to professional service companies, and make full use of the services and technologies of professional companies to enable enterprises to obtain high-quality IT services, and complete necessary guarantees more economically, professionally and quickly. Software outsourcing refers to the software demand activities completed by the company outsourcing all or part of the software project to a professional team that provides outsourcing services in order to focus on the core competitiveness of the business and reduce the cost of the software project.
Engineering R&D outsourcing is a new trend in the integration of engineering services and new technologies, with a wide range of downstream applications, such as automobiles, aviation, telecommunications, railways, and software. The application of engineering research and development in the automotive industry includes design, prototyping, system integration and testing. The civil aviation outsourcing industry is not only gradually outsourcing non-core businesses such as ground services and aviation food. Large airlines have also started outsourcing maintenance, including maintenance of airframes, engines, and routes, and hope to model the results. With the rapid development of civil aviation, outsourcing service providers will complete more and more businesses. Telecom business process outsourcing refers to the outsourcing of part or the entire telecom business process by an enterprise to release its internal resources. In addition, the railway company also outsources IT and data hosting services to specialized companies. With the continuous development of information technology, more and more companies need to use Internet technology to help improve operational efficiency, save costs, and achieve business growth. Although they have purchased a lot of hardware and software, they are not good at software operation and maintenance. Therefore, many companies choose to outsource this part of the business.
Through outsourcing, companies can avoid certain early market risks and R&D team building and management costs, to obtain greater benefits at lower costs. Second, outsourcing allows people to complete R&D tasks remotely. Therefore, the engineering R&D outsourcing industry is expected to have huge potential.
Prospect Analysis of the Engineering Research and Development Outsourcing Market in Various Regions
Europe was the largest revenue market with a market share of 39.51% in 2015 and 37.51% in 2020 with a decrease of 2%. USA ranked the second market with the market share of 19.64% in 2019. It can be seen that due to the high level of economic development in developed countries such as Europe and the United States, the downstream demand is large and the engineering outsourcing market is wide. Also, development of economy, increase downstream demand, technology innovation progress in China and India also have led to an increase in demand, so the markets for engineering research and development outsourcing are expected to be the market with the most promising growth rate.
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Engineering research and development outsourcing companies are mainly from Europe; the industry concentrate rate is low. The top three companies are Altran Technologies, Alten Group and HCL Enterprise with the revenue market share of 2.35%, 1.95% and 1.44% in 2019. As demand increases, engineering R&D outsourcing companies will become more standardized, small and medium-sized enterprises will face elimination, and market concentration will increase.
On a global scale, especially in developing countries, the automobile and other vertical fields have grown strongly, becoming a powerful force to promote engineering research and development. Companies outsourcing the R&D part to outsourcing suppliers can not only obtain local resources, especially human resources, but also local technical information to localize R&D. Therefore, service outsourcing has become an important commercial measure adopted by more and more companies.
The Continuous Growth of Downstream Demand Promotes the Vigorous Development of the Engineering R&D Outsourcing Market
Globalization and increasing market speed are causing more and more companies to re-examine all aspects of their business efficiency. Due to the high efficiency and low cost of R&D outsourcing, outsourcing services have become more and more popular. In addition, many companies lack skilled technicians in certain fields, and at the same time hope to reduce costs, and gradually focus on the development of engineering R&D products that are compatible with digital consumer networks, which has driven the demand of the engineering R&D outsourcing industry.
According to our research, the global engineering research and development outsourcing market has a total revenue of 130444.54 M USD back in 2015, and increased to 159789.47 M USD in 2020. Due to increasing demand and extensive downstream applications, the global engineering R&D outsourcing market is expected to witness moderate growth during the forecast period. We made the prediction that the value of engineering research and development outsourcing markets can be 208769.37 M USD by 2026. The CAGR of engineering research and development outsourcing is 4.56% from 2020 to 2026.
In the outsourcing industry, the improvement of innovation ability and service quality will be paid more and more attention. Many countries have vigorously promoted innovation and development in the field of science and technology, so the engineering R&D outsourcing industry will inevitably embark on the path of independent innovation and explore new development and service models.
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