Engineering Services Market Size, Share & Industry Analysis, By Services (Software Product Engineering, Embedded Engineering, Mechanical Engineering, Network Engineering, and Manufacturing Engineering), By Vendor Category (Broadbased and Pureplay), By Industry Vertical (Automotive & Mobility, Healthcare & Life Science, Manufacturing & Mining, BFSI, Retail & Consumer goods, Aerospace & Defense, IT & Telecom, and Others (Media & Entertainment)), and Regional Forecast, 2025 – 2032

The global engineering services market size was valued at USD 2.15 trillion in 2024. The market is projected to grow from USD 2.34 trillion in 2025 to USD 4.64 trillion by 2032, exhibiting a CAGR of 10.3% during the forecast period.

The global engineering services (ES) market is vast, multifaceted, and continuously evolving, providing a diverse array of services, including software product engineering, embedded engineering, mechanical engineering, network engineering, and manufacturing engineering. The market demonstrates a blend of stability and growth potential, influenced by technological advancements and rising needs across industries such as automotive, aerospace, manufacturing, BFSI, retail, IT, and healthcare. In established regions such as North America and Europe, growth is underpinned by technology innovation and infrastructure upgrades. Meanwhile, regions including the Asia Pacific, the Middle East & Africa, and South America are experiencing significant expansions due to industrialization, urbanization, and supportive government policies.

Market players operating in market are facing a dynamic trend, Thus, major companies such as Infosys, Wipro, and global MNCs are focusing on accommodating to digital engineering solutions that shapes digitalization in the industries including (automotive, smart industry, and rail transport). 

• For instance, in April 2024, Infosys announced a strategic acquisition of a engineering service provider In-Tech. The primary aim is to expand engineering services portfolio by offering solutions such as e-mobility, connected and autonomous driving, off road vehicle, electric vehicles, and railroad.

 The COVID-19 pandemic spurred digital adoption across engineering services, making remote project management and virtual simulations mainstream. This shift greatly contributed to the digitization of the engineering domain. In addition, geo-political shifts, trade policies, and foreign investment trends heavily influenced the market. For instance, trade tensions and shifts in supply chain strategies among major countries such as the U.S. and China have reshaped demand for engineering solution services in emerging countries such as India, Vietnam, Singapore, and the UAE. Furthermore, cross-border project collaborations are often impacted by foreign policy changes, which can either open new opportunities in the long term or present barriers in the short term.

IMPACT OF GENERATIVE AI

Adopting Gen-AI Competences to Automate Processes Amplifies Product Demand

Generative AI is transforming this industry by automating daily routine tasks and enhancing design processes. The cutting edge technology allows engineers to focus on complex problem-solving and innovation and maximize productivity among the workforce. The shift is driving significant growth in the industry, with global engineering service sector focusing on integrating AI tools, such as GPT and other AI productivity plugins. Moreover, there is a growing influx of Foreign Direct Investment (FDI) into the sector, particularly in regions such as Asia Pacific and Latin America. As the sector continues to evolve, the strategic adoption of generative AI will be pivotal in maintaining competitive advantage and driving sustainable growth.

• For instance, in March 2023, Altoura, a prominent AI-enabled training service provider, announced the launch of Altoura 6, an immersive AI next-generation training platform for Engineering Services. It includes AI beta for its new AI services that help scale and automate training content.

ENGINEERING SERVICES MARKET TRENDS

Increasing Integration of AI Tools to Optimize Processes is Shaping Trends in Industry

The ES market trends are shaped by the increasing integration of Gen AI in multiple applications that help to design and optimize the processes in the industry. AI-powered tools are being used for design optimization, while predictive analytics is increasingly being adopted. Furthermore, a collaboration of data pools with innovative analytical applications helps the media and information technology industry increase product adoption and improve productivity for businesses. Meanwhile, the integration of artificial intelligence and machine learning capabilities helps businesses automate complex and repetitive tasks and optimize inventory through analytics that support the growth of the engineering services market size during the forecast period.

• For instance, in November 2023, Bpifrance and Capgemini collaborated to develop a next-generation digital factory. The digital factory would provide BpiFrance’s IT teams with the latest technologies, particularly in the fields of data processing and artificial intelligence (AI).  

MARKET DYNAMICS

Market Drivers

Surge in Demand for Digital Services to Empower Market Growth

The ES sector has been observing a rise in the adoption and development of digital products that connect and collaborate in various ways. Digital platforms are driving the adoption of digital services by offering cloud-based, low code, no code, scalable, resilient, and secure platforms. Additionally, it helps develop solutions that combine various systems and services to efficiently deliver a business solution that includes design experience, operation optimization, and application improvements to leverage real-time analytics and minimize downtime for businesses. Several technologies and digital tools ensure resilient data structure and web security that secure them from potential threats and empower engineering services market growth.

• For instance, in February 2024, Capgemini announced a new partnership with one of the innovative and dynamic new players in artificial intelligence, Mistral AI. Together, they aimed to accelerate the evolution of more accessible, cost-effective, and versatile generative AI implementation at scale.

Market Challenges

Digital Privacy Risks and Vacillate Investments are Potential Constraints for Market Development

The sector faces notable challenges in the short term owing to the high cost of implementation and complex infrastructure requirements. Implementing a digital engineering solution demands no significant upgrades, which could be a substantial benefit for small and medium enterprises (SMEs). However, high potential risks with the integration of new systems and misconceptions about compromising cyber threats create concerns for data privacy and cybersecurity risks. As the potential of IoT devices and AI increases, exposure to potential cyber threats also increases, which could affect enterprises' investments. Thus, potential cyber risks and low interest of investors could hinder the seamless adoption of engineering across various industries in the short term.

Market Opportunities

Advanced Network Technologies and AI-Enabled Infrastructure Present Significant Growth Aspects

The market showcases immense potential due to the growing investment in 5G network infrastructure and cutting-edge computing technologies. These data technologies enable clientele to control real-time data and computing capabilities, making digital services more accessible and easy to integrate. Furthermore, the integration of AI analytics into the data-controlled infrastructure offers an impeccable opportunity through scalable and customizable solutions. These advanced analytics help businesses collaborate between innovative technologies, unlocking innovative service models that will grow engineering services market share during the forecast period.

• For instance, in November 2022, Mercedes Benz and Microsoft Corporation collaborated to develop the MO360 data platform, connecting 30-passenger car plants to Microsoft Cloud. The unified data platform is standardized on Microsoft Azure, providing Mercedes with flexibility and cloud computer power to run AI and analytics on a global scale.

SEGMENTATION ANALYSIS

By Services

Growing Demand for AI-enabled Services Boosts Software Product Engineering Segment Growth

By services, the market is divided into software product engineering, embedded engineering, mechanical engineering, network engineering, and manufacturing engineering.

The software product engineering segment dominates the services segment due to the high demand for AI-enabled services and the benefits of data science in predictive analytics and risk management. Additionally, digital engineering solutions help businesses expand digitally, extending the limits and services to the regional boundaries that drive businesses to generate more profitability in the long term.

Mechanical engineering is associated with the design and analysis of mechanical equipment and components, which significantly reduce process time and maximize business productivity.

Network engineering is in increasing demand due to a lack of a skilled workforce and the need to minimize downtime of the servers to improve services. Furthermore, the growing integration of IoT and embedded electronics into equipment has created ample opportunities for businesses to leverage data for advanced analytical processes, expanding the market potential in the long term.   

By Vendor Category

Extensive Service Offerings and Customized Solutions by Broadbased Vendors Make Them Dominant in the Market 

As per the vendor category, the market is classified into broadbased and pureplay.

Broadbased vendors are dominating the segment owing to wide service offerings and customizable solutions that can easily be integrated with modern AI and design software. Providers are experimenting with generative AI to enhance overall efficiency, improve customer experience, reduce turnaround time, boost team member productivity, and achieve cost savings. These benefits demonstrate the immediate value of embracing sustainable consulting practices in the market.  

Continous investment by major industries in software-defined processes has driven the evolution of both automotive and medical devices, benefiting the pureplay businesses in the long term.

By Industry Vertical

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Emphasis on Integrating AI into Every Software Solution Drive IT & Telecom Dominance

By industry vertical, the market segment is categorized into automotive & mobility, healthcare & life science, manufacturing & mining, BFSI, retail & consumer goods, aerospace & defense, IT & telecom, and others (media & entertainment).

The IT and telecom sector dominates the segment with the highest market share owing to the growing research and integration of AI-based software. This sector emphasizes investment in building AI-enabled solutions that help businesses automate repetitive tasks and minimize costs.

Automotive & mobility showcases progressive growth as it utilizes virtual prototyping and mobility simulation in testing and manufacturing, which is driving market growth in the long term.

The retail & consumer goods industry is further supporting the market potential, with the FMCG industry utilizing AI and machine learning to increase customer retention and minimize supply chain risk by optimizing inventory.

Manufacturing & mining are witnessing stable growth due to the increasing adoption of automation and Industry 4.0 to maximize efficiency by utilizing modern machinery software to smoothen operations with maximum efficiency and sustainable practices.

Healthcare & life sciences and BFSI are experiencing significant growth owing to their growing use in advanced engineering and process technologies that reduce production time.

Aerospace & defense and other segments are growing significantly due to the investor's interest and emphasis on developing more advanced technologies for these sectors.

ENGINEERING SERVICES MARKET REGIONAL OUTLOOK

Based on the region, the market is studied across Asia Pacific, North America, Europe, South America, and Middle East & Africa

Asia Pacific

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Asia Pacific is the dominant region, holding the largest market share due to the rapid adoption of Industry 4.0 and high foreign direct investments (FDI) in advanced AI technologies that automate tasks and minimize operational costs for businesses in the long term. Additionally, the region's expanding 5G infrastructure and increasing investments in countries such as China, Japan, India, and  Asia Pacific countries are driving the growth engineering services market share during the forecast period.

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China in the Asia Pacific region is witnessing extensive growth owing to rapid digitalization and favorable investment policies for industries. Furthermore, its innovation capabilities and AI advancements help businesses integrate IT services seamlessly with Industry 4.0. Following China, India is projected to withstand progressive growth owing to its well profound startup ecosystem and huge talent pool that drives market size and forecasts. Additionally, Japan and other Asian countries are witnessing steady growth due to their increased emphasis on integrating AI services into their processes to maximize productivity.

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North America

North America's engineering services market is witnessing progressive growth as the market is propelled by rapid digitalization coupled with human intelligence AI technologies. Additionally, the region's supportive government policies to innovate and capitalize on services across the globe are benefitting the sector's growth.  U.S. is the dominating country in North America focusing on advance applications of edge AI and IIoT for the advancements of engineering services. Also, it is expected to register the fastest growth during the forecast period, driven by niche requirements in sectors like aerospace and renewable energy

South America

South America is a growing region with increasing interest in manufacturing and engineering services startups due to increasing investments in data infrastructure, which aims to improve global data storage and analytic problems. Furthermore, the adoption of advanced edge computing among technology-enabled software companies for collaborative research and analytics is supporting the near-term growth of technology adoption.

Europe

Europe is showcasing steady growth in the engineering services sector owing to its huge, robust, and early technology adoption and a strong prominence for implementing Industry 4.0 for productivity and sustainability. Countries including Germany, the U.K., and Italy are dominating the adoption of these technologies, which could benefit engineering simulation with more optimized product development.

Middle East & Africa

The Middle East & Africa (MEA) region is showcasing significant growth during the forecast period. The businesses in this region are focusing on integrating advanced futuristic technologies for sustainable growth and green energy. Companies are increasingly using advanced software and simulation to minimize operational risks, particularly in the construction and infrastructure sectors.

Competitive Landscape

KEY INDUSTRY PLAYERS

Focus on Growing Investment by Market Players for Innovative Product Development to Extend Market Potential

The emergence of AI amplifies the market potential of engineering services by focusing on research and the integration of AI for innovation. These modern technologies are driving revenue for businesses by minimizing lead times in product development. The competitive landscape of the market is shaped by the adoption of innovative technologies, strategic partnerships, and increased focus on a sustainable ecosystem for the industry to expand. Companies differentiate themselves through global execution, customer-centric solutions, and specialized expertise, which profoundly impact their position in the market.

• For instance, in February 2024, Capgemini and Unity, the world’s leading platform for creating and growing real-time 3D (RT3D) content. It announced an expansion of its strategic alliance that will take on Unity’s digital twin professional arm. It will allow end users to envision, understand, and interact with physical systems.

List of Engineering Services Companies Profiled

• Capgemini SE (France)


• Accenture (Ireland)


• Deloitte (England)


• Tata Consultancy Services (India)


• HCL Tech (India)


• Cognizant (U.S.)


• Wipro (India)


• Tech Mahindra (India)


• GlobalLogic (U.S.)


• L&T Technology Services (India)


• Alten (France)


• Akkodis (Switzerland)


• AFRY (Sweden)


• Cyient (India)


• Infosys (India)


• AVL List GmBH (Austria)


• Globant (Argentina)


• KPIT (India)


• IBM (U.S.)


• EPAM (U.S.)

KEY INDUSTRY DEVELOPMENTS

• December 2024: Tata Consultancy Services, a leading IT service provider, extended a partnership with Telenor Denmark (TnDK), the second-largest mobile operator in the Danish market. Through collaboration, TCS would continue to deliver strategic insights and technological expertise.


• November 2024: C3 AI, an enterprise AI software solution company, and Capgemini announced the expansion of their partnership. The collaboration is designed to accelerate and enhance the delivery of Enterprise AI solutions, offering clients significant benefits, such as improving productivity efficiently and reducing operational costs.


• October 2024: TCS expanded its collaboration with NVIDIA to launch industry-specific solutions and offerings that would help customers adopt Artificial Intelligence (AI) faster and at scale. These solutions and offerings will be delivered through TCS's new business unit, enabling customers to adopt artificial intelligence (AI) faster and at scale.


• September 2024: TCS, a global leader in IT services and business solutions, expanded its partnership with Google Cloud to offer new cybersecurity solutions for customers. The partnership aimed to strengthen cyber resilience for enterprises across industries and empower them with cutting-edge technologies.


• July 2024: Capgemini announced an acquisition of Lösch & Partner to augment its capabilities in application lifecycle management and systems engineering for German automotive manufacturers. As a business partner, Capgemini enables the future competitiveness of manufacturing companies to enable the convergence of software and hardware. 

REPORT COVERAGE

The market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, service types, and leading ES industry of the product. Besides, the report offers insights into the market trends, market sizes and forecasts, and highlights key industry developments. In addition to the factors above, the report encompasses several factors that contributed to the growth of the market in recent years.

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