Product Engineering Services Market

Product Engineering Services Market Outlook (2023 to 2033)

In 2023, the global product engineering services market is valued at US$ 1,200 billion and is forecasted to reach US$ 2,400 billion by 2033-end. Global demand for product engineering services is predicted to increase at a CAGR of 7.2% from 2023 to 2033.

• Product engineering services are employed extensively in the healthcare sector because they focus on next-generation devices and technologies.
• Adoption of product engineering services in the healthcare industry is expected to rise swiftly at a CAGR of 7.5% over the decade.

The process of designing, creating, and testing software, a device, a system, or an assembly is known as product engineering. Development of new products, product design, prototype testing, and maintenance services are some of the key areas of concentration. Modern product engineering services are gaining traction because of their rising need to improve consumer experiences.

The market is expanding as a result of consumers' growing reliance on technology. New engineering services have been developed by companies devoted to launching goods faster in the product engineering services sector in response to the rising demand for quick product delivery.

Software product companies may improve their agility and responsiveness to the changing market and competitive landscape by utilizing product engineering solutions from various product engineering organizations. Product engineering services can involve instruction in project management for product development while carefully examining each step of the realization process, from the initial concept to the final, marketable product.

The emergence of connected and smart technology and the subsequent hike in sales of smart electronic devices, smart homes, and in-vehicle networking systems are the key factors pushing the demand for product engineering services in the global market. The market for product engineering services is growing as a result of the increased usage of digital transformation technologies.

The market is likely to remain influenced by the fact that engineering research & development (ER&D) capability is indispensable for organizations, not just for competitive advantages but also for survival. A majority of leading providers of product engineering services are currently focused on the development of strong expertise in digital technologies.

Demand for constant innovation and iteration is increasing, which is helping the worldwide market for product engineering services develop. The convergence of technology and engineering is creating significant demand for new ER&D service portfolios, enabling enterprises to drive efficiencies in design, development, and testing processes by using analytics, automation, and design thinking to improve quality and reduce costs.

Report Attributes	Details
Product Engineering Services Market Size (2023)	US$ 1,200 Billion
Projected Market Value (2033)	US$ 2,400 Billion
Global Market Growth Rate (2023 to 2033)	7.2% CAGR
Market Share of New Product Developments (2023)	60%
Key Companies Profiled	Accenture Cognizant Akka Technologies Calsoft Inc. Capgemini IBM Corporation Nous Infosystems CloudMoyo Happiest Minds Technologies Infinite Computer Solutions Inc. ITC InfoTech Xoriant Corporation HCL Technologies Limited

Which are the Key Elements Determining the Growth of the Product Engineering Services Market?

“Emergence of Digital Product Engineering Trends”

Digital product engineering trends emerging in product development are likely to transform services. The hyper-automation, custom software development, and penetration of the Internet of Things have influenced the ways apps and products are being developed.

The market for software outsourcing has also been expanding significantly, enabling businesses to boost their levels of innovation and profit margins while also improving the value of their brand internationally. The information technology industry involves the use of DevOps scaling software at large. DevOps is an extremely important technology in product engineering.

Customer expectations are rising dramatically, and they now expect the software and mobile apps to have the ability to fix bugs with regular updates. These changes drive research and development in the field to continue growth and maintain a competitive pace.

“IoT-driven Product Innovations”

IoT advantages include better situation awareness, sensor-driven decision analytics, optimized resource usage, process optimization, real-time control, and reaction in complex autonomous systems. IoT-driven product innovations strengthen business cases and boost ROI (return on investment).

The Industrial Internet of Things (IIOT) is helping vendors boost their operational efficiency, improve productivity, and deliver seamless performance, thereby enabling them to build high-quality designs for clients. Palpable penetration of IoT is further driving fresh demand for product engineering services, across varied verticals.

“Growing Emphasis on Time to Market (TTM) Systems”

TTM is the length of time it takes for a product to go from being planned to being made available for purchase. First-mover advantage is being provided by using new and innovative technologies in the fast-paced and competitive corporate environment. To decrease the time to market (TTM) of their products, there is a developing need for product engineering services.

Businesses are employing techniques such as Six Sigma and project risk management to boost their operational effectiveness. Furthermore, TTM is a crucial metric for measuring company efficiency since companies can gain significant branding benefits by releasing products earlier than their competitors.

Product engineering service providers help businesses shorten their time to market (TTM) while preserving the quality of their services or goods. The increasing need for businesses to achieve faster time to market and deliver a superior customer experience in uncertainties is driving demand for product engineering services across enterprises.

What are the Challenges Faced by Product Engineering Service Providers?

“Rising Concerns about Data Integrity & Privacy and Lack of Technical Expertise”

Many businesses are still reluctant to outsource product engineering services because they fear losing control of their intellectual property rights. This will remain a strong restraint, restricting revenue generation opportunities in the market.

Market growth may be hampered by concerns about data integrity and privacy. A lack of technical expertise is impeding market expansion.

How Can New Entrants Strengthen Their Market Positions?

“AI-based Platforms - Apt Solution to Enhance Production Processes”

New businesses are planning to enter the intelligent and rapid management of product engineering services to increase their market profitability. By offering new platforms and capabilities as a service, aspiring market players are making a mark in the industry.

• AISE.AI, an Italian startup is offering AI-based platforms for the data-driven modeling and simulation of intricate industrial systems and processes. Utilizing data from sensors, and meters, the platform employs AI to build digital twins of industrial systems. They enable plant engineers to model hypothetical production situations while also providing real-time information about plant operations. By doing so, plant engineers may retain precise control while optimizing production parameters and enhancing the key performance indicators (KPIs) of production units.

Which Region is Predicted to Lead Market Expansion Going Forward?

“Significant Investments by Key Market Players in Product Engineering Services in North America”

• North America accounts for 50% share of the global market in 2023.

North America will continue to be the leading market for product engineering services market, in line with the rapidly emerging smart technologies and strong market presence of key companies. Significant investments by key market players in product engineering services are also expected to boost market expansion over the coming years.

A majority of leading providers of product engineering services are currently focused on the development of strong expertise in digital technologies.

Country-wise Insights

What Makes the United States an Appealing Market for Product Engineering Service Suppliers?

“Rising Adoption of Advanced Technologies for Smart Homes & Workplaces”

Market growth in the United States is attributed to the rapid adoption of advanced technologies for smart homes, workplaces, and industrial automation. The development of smart infrastructure and the growth of multiple industries are projected to create several attractive opportunities for product engineering service providers. The presence of several IT-related businesses may enhance the demand for advanced technologies in the country.

Why is Adoption of Product Engineering Services High in Japan?

“Rapid Expansion of Information Technology Industry”

The market in Germany is projected to remain the most lucrative for product engineering services due to the rising need for advanced technologies such as AI and ML. The market for product engineering services is driven by rising measures to secure end-user data, the rapid expansion of the information technology industry, and the high demand for computer-aided engineering solutions.

How is Demand for Product Engineering Services Shaping Up in Japan?

“Noticeable Increase in SMEs in the Country”

The market in Japan is expanding due to the rising adoption of product engineering services for organizing a massive workforce. Due to improved R&D capabilities and an increase in SMEs, the market is anticipated to have considerable growth throughout the projection period. Rising demand for IoT sensors and the rapid development of Industry 4.0 are key factors supporting market growth.

Category-wise Insights

Which Service Type is Dominating in Terms of Revenue Generation?

“Consistent Rise in New Product Developments across Industry Verticals”

By service type, the market is segmented into new product development, product testing, product sustenance, product deployment, product support, and product management.

• New product developments account for 60% of the global market at present.

Shift in technology complexity, coupled with growing consumer demand for a ‘connected’ ecosystem, has triggered collaborations between enterprises and product engineering services providers. This further impacts the market dynamics, technology, and competition bringing changes to virtually every vertical, and making new product developments one of the most powerful business activities.

Businesses that offer product engineering services are using IIoT to construct creative hybrid business models depending on customer needs. They increase manufacturing capabilities and make use of cutting-edge technologies to support new product developments.

Why are Product Engineering Services Widely Used in the Healthcare Industry?

“Product Engineering Services Revolutionizing Healthcare Industry by Improving Population Health”

The market is classified by vertical into aerospace & defense, automotive & transportation, consumer electronics, healthcare, industrial manufacturing, IT & telecom, media & entertainment, and others.

Continuous technological advancements in the healthcare industry are enabling improvements in outcomes, diagnosis, and prevention. Product engineering and IoT technologies are revolutionizing the healthcare industry by lowering healthcare costs, promoting patient involvement, enhancing population health, and eventually increasing the accessibility and transparency of healthcare at all levels.

Product engineering services assist in monitoring consumers' health. Utilizing product engineering services has several benefits, including having access to one's medical records, self-monitoring of one's own health or diagnostic data, active data collection, and documentation.

Competitive Landscape

New launches centered on customer demands will remain among the key strategies of market forerunners as they continue to invest efforts in introducing product designs while following safety regulations that appeal to a wider customer base. They are focusing on partnerships, product standards, quality control, pricing trends, and new developments to increase their market shares.

Profound domain knowledge and deep expertise in customers’ business verticals will be considered important determinants, offering companies an additional edge in the competitive landscape of the product engineering services market. The market is lately witnessing an increase in the collaborations of stakeholders with enterprises, which are attempting new market entry and thus need assistance from product engineering services providers, right from the initial stage to the post-deployment support phase.

For instance,

• In 2021, Capgemini introduced Capgemini Engineering. With this launch, the company aimed to help companies create cutting-edge goods and services while also enabling them to adapt as the physical and digital worlds converge.

Key Segments of Product Engineering Services Industry Research

• By Service Type :

  • New Product Development
  • Product Testing
  • Product Sustenance
  • Product Deployment
  • Product Support
  • Product Management

• By Organization Size :

  • SMEs
  • Large Enterprises

• By Vertical :

  • Aerospace & Defense
  • Automotive & Transportation
  • Consumer Electronics
  • Healthcare
  • Industrial Manufacturing
  • IT & Telecom
  • Media & Entertainment
  • Others

• By Region :

  • North America
  • Europe
  • Asia Pacific
  • Latin America
  • Middle East & Africa