Originally published on Technavio:Analysis of Engineering Services Outsourcing Market in the United States: Sourcing Methods and End-Users - Forecast and Size 2023-2027
Overview:
The United States' engineering services outsourcing market is poised for substantial growth, with an estimated increase of USD 93.95 billion between 2022 and 2027, projected to achieve a Compound Annual Growth Rate (CAGR) of 23.34%. Factors such as cost savings from lower labor wages, access to high-quality manpower for engineering services outsourcing, and the absence of in-house expertise are driving this growth.
Market Segmentation:
The offshore segment is expected to witness significant growth during the forecast period. Offshore outsourcing involves transferring engineering processes to organizations located abroad. This segment's growth is attributed to easy access to skilled human resources in the US and the availability of cost-effective resources.
Market Dynamics:
Cost savings from lower labor wages drive market growth, although concerns about intellectual property theft and misuse may impede it. Labor arbitrage, wherein businesses relocate operations to lower-cost locations, contributes to cost savings and allows access to skilled labor and advanced technologies.
Market Driver:
Cost savings from lower labor wages fuel market growth, as businesses benefit from assigning work to a low-cost workforce and reducing associated infrastructure and staffing costs. Labor arbitrage is facilitated by the US economy's expansion, enabling businesses to maintain lean workforces and scale operations as needed.
Market Trends:
Innovation in engineering services outsourcing services is a prominent trend, with businesses outsourcing tasks ranging from backend work to creative tasks. Outsourcing innovation functions, such as cloud-based delivery and augmented reality, has become financially and strategically viable for industries like manufacturing and banking.
Market Challenge:
The risk of intellectual property theft and misuse poses a significant challenge to market growth. Concerns about IP theft lead many US organizations to maintain strict non-disclosure policies and refrain from outsourcing engineering design and product development tasks to external providers.
Market Customer Landscape:
The report assesses the market's adoption lifecycle, focusing on adoption rates and key purchase criteria across different regions. Insights into customer dynamics aid companies in refining their growth strategies.
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Companies employ various strategies such as alliances and product launches to strengthen their market presence. Key players include Atos SE, Alten SA, Cognizant Technology Solutions Corp.
The report forecasts revenue growth and analyzes trends and opportunities from 2017 to 2027, providing insights into the engineering services outsourcing market in the United States.
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