Europe Engineering Research And Development (ER&D) Services Market Size
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| Market Size (2024) | USD 227.39 Billion |
| Market Size (2029) | USD 384.03 Billion |
| CAGR (2024 - 2029) | 11.05 % |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Europe Engineering Research And Development (ER&D) Services Market Analysis
The Europe Engineering Research And Development Services Market size is estimated at USD 227.39 billion in 2024, and is expected to reach USD 384.03 billion by 2029, growing at a CAGR of 11.05% during the forecast period (2024-2029).
- Europe’s engineering research and development (ER&D) market is evolving rapidly, and significant demand for ER&D services is being witnessed from various industries across Europe. As technology rapidly advances and innovations accelerate in industries across Europe, product development timelines have significantly shortened. Consequently, there's a heightened demand for collaborations with engineering service providers equipped to handle both traditional and contemporary products from start to finish by utilizing engineering research and development services.
- Moreover, as consumer preferences evolve and digitization expands, there's a heightened demand for faster innovation cycles and product development. This urgency aims to shorten time-to-market and broaden the range of products and services offered in response to a dynamic environment. In response to this challenge, organizations across Europe are rapidly adopting engineering research and development services across various sectors.
- Industry trends and technological advancements are reshaping how companies develop and manage products, enhancing their ability to deliver engaging user experiences. Further, the growth of automation, coupled with a growing need to enhance operational efficiency and adopt disruptive technologies, is rapidly transforming industries across Europe.
- This evolution is prompting shifts in business models, operations, and supply chains. With the rapid acceleration of innovation, enterprises across various sectors are increasingly relying on trusted third-party ESPs for assistance. With their comprehensive end-to-end capabilities, these service providers enable enterprises to enhance and maintain their current products and processes. Additionally, they drive innovation and the development of new offerings, helping enterprises sustain a competitive edge and differentiate themselves in the market.
- Furthermore, the rise of Cloud technology and 5G networks has significantly boosted computing power and network speeds, paving the way for heightened innovation. In addition, AI, Machine Learning, and the Internet of Things (IoT) breakthroughs have brought products like autonomous vehicles closer to reality. This rapid pace of innovation has compelled enterprises to lean more on engineering research and development services, thereby fueling the growth of the engineering research and development market in Europe.
Europe Engineering Research And Development (ER&D) Services Market Trends
The Automotive Sector is Analyzed to Drive the Market
- The automotive sector in Europe is analyzed to positively influence the growth of Europe’s engineering research and development services market over the forecast period. Over the years, the complexity of Automotive ER&D has consistently increased. The focus has transitioned from traditional areas like lean manufacturing and fuel efficiency to advanced domains such as electrification, full autonomy, smart infotainment, automated production, and Factory 4.0. These factors have led to an increased demand for engineering r&d services in Europe's automotive sector.
- Further, France and Germany, two key European nations, host several of the world's largest automotive companies. In response to evolving market demands, automotive firms in the region are significantly boosting their R&D investments, focusing on themes like autonomy, connectivity, electrification, and shared mobility. Consequently, this heightened R&D complexity has underscored the need for specialized support, driving the demand for engineering research and development services.
- The surging automotive sector across European nations is driving the demand for engineering research and development services, aiming for quicker market entry and improved customer experiences. For instance, data from ACEA and ANFIA reveals that 2023 saw a rise in new light commercial vehicle registrations across key European nations. In 2023, France recorded 378,040 new registrations, closely trailed by the United Kingdom at 343,361.
- Moreover, as demand for autonomous and connected technologies surges, propelled by regulatory pushes for passenger safety and OEMs' cost concerns, manufacturers are steadfast in their commitment to enhancing safety and experience through these technologies. Further, electrification is set to dominate the automotive landscape as the urgency to meet carbon emission targets intensifies. Such developments are positively driving the demand for engineering research and development services in the automotive sector across Europe.
Germany is Expected to Hold Significant Market Share
- Germany’s engineering research & development services market is expected to hold a significant market share in Europe’s engineering research & development services market over the forecast period, marked by the rapid digital transformation across industries and the proliferation of Industry 4.0 coupled with a growing focus toward product innovation across sectors.
- Furthermore, driven by a commitment to enhanced product innovation and competitiveness, businesses from various sectors across Germany are turning to specialized service providers for their engineering research and development needs. By utilizing ER&D services, companies aim to tap into external expertise, accelerate their time-to-market, and manage costs more efficiently.
- Moreover, Germany's thriving automotive sector is set to bolster the demand for engineering research and development services throughout the forecast period. The presence of major automotive market vendors and an increasing number of businesses coupled with growth in automotive sector revenue is creating significant scope for the growth in the adoption of ER&D services in the Automotive sector. For instance, according to the data from Statistisches Bundesamt, the automobile industry revenue in Germany reached USD 610.11 billion.
- Further, in recent years, digital technologies have broadened the reach of ER&D services, permeating nearly every segment of the automotive value chain. These services are especially prominent during manufacturing, encompassing everything from body and chassis design to embedded workloads and extending to validation and testing. Such developments further boosted the demand for engineering research and development services in the country's automotive sector.
Europe Engineering Research And Development (ER&D) Services Industry Overview
The Europe engineering research and development (ER&D) services market is fragmented, with the presence of many global as well as local pure-play engineering services providers and multi-disciplinary engineering services providers. Operating in the market. Several prominent engineering research and development services companies are entering into collaborations and expanding, launching innovative solutions and services to consolidate their positions in Europe’s engineering research and development (ER&D) services market.
- April 2024: Infosys, a prominent digital services and consulting player, solidified its position by signing a definitive agreement to acquire in-tech. In-tech is a major player in Engineering R&D services, with a specific focus on the German automotive sector. This move bolsters Infosys' already robust Engineering R&D portfolio, underlining its dedication to guiding global clients through their digital engineering transformations.
- April 2024: Sonatus, a prominent player in automotive software, inaugurated a new R&D and engineering center in Dublin, Ireland, aiming to bolster its engineering and business capabilities. Recognizing Europe's significance as a central hub for numerous major automotive manufacturers, Sonatus is strategically placing experienced talent to deepen its presence and foster closer collaborations in this vital region and beyond. This new center is poised to enhance the company's service offerings to both current and prospective clients.
Europe Engineering Research And Development (ER&D) Services Market Leaders
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Cyient
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Alten
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Akkodis
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Infosys
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Cagemini SE
*Disclaimer: Major Players sorted in no particular order
Europe Engineering Research And Development (ER&D) Services Market News
- June 2024: Hinduja Tech Ltd, a global engineering R&D services firm with a focus on mobility, announced its definitive agreement to acquire Germany's Tecosim Group for ~USD 22.8 million. The move expands Hinduja Tech's footprint in both European and global markets and also solidifies its position as a premier provider of mobility engineering services on a global scale.
- April 2024: Wanhua Chemical's R&D Center in Barcelona, situated in Cornella de Llobregat, commenced its operations. This strategic move underscores the company's commitment to expanding its presence in Europe and globally, ensuring a rapid response to downstream customer needs, and enhancing collaborative scientific research and innovation efforts. The center is poised to customize solutions to meet the unique challenges of its clientele, drive the development and validation of new products, offer prompt technical support for quality issues, and keep pace with industry technological advancements through dedicated research and innovation.
Europe Engineering Research And Development (ER&D) Services Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Force Analysis
4.2.1 Threat of New Entrants
4.2.2 Bargaining Power of Buyers/Consumers
4.2.3 Bargaining Power of Suppliers
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Regulatory Landscape and Policy Developments
4.4 Assessment of Impact of macroeconomic trends
4.5 Industry Ecosystem Analysis
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Accelerating Technological Advancements across Sectors
5.1.2 Growing Need to Produce More Innovative Products to Meet Consumer Demands at a Faster Pace
5.2 Market Restraints
5.2.1 Skilled Talent Shortage
5.3 Key Base Indicator Analysis
5.3.1 Current Available Talent Pool of Engineers
5.3.2 Talent Upskill Initiatives (Government and Industry Collaborations)
6. MARKET SEGMENTATION
6.1 By Service Provider Type (Market Size Estimates and Forecasts, Associated Trends)
6.1.1 Global Capability Centers (GCCs)
6.1.2 Engineering Service Providers (ESPs)
6.2 By Industry Vertical (Market Size Estimates and Forecasts, Associated Trends)
6.2.1 Automotive
6.2.2 Industrial
6.2.3 Aerospace and Defence
6.2.4 Consumer Electronics
6.2.5 Semiconductor
6.2.6 BFSI
6.2.7 Other Industry Verticals (includes Retail, Healthcare, IT and Telecom)
6.3 By Service Line (Market Size Estimates and Forecasts, Associated Trends)
6.3.1 Mechanical and Electrical Engineering Services
6.3.2 Embedded Engineering Services
6.3.3 Software Engineering Services
6.4 By Country (Market Size Estimates and Forecasts, Associated Trends)
6.4.1 United Kingdom
6.4.2 Germany
6.4.3 France
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles*
7.1.1 Cyient
7.1.2 Alten
7.1.3 Akkodis
7.1.4 Harman International
7.1.5 Segula Technologies
7.1.6 L&T Technology Services
7.1.7 Infosys
7.1.8 Capgemini SE
7.1.9 SII Group
7.1.10 HCL Technologies
7.1.11 Tata Consultancy Services
7.1.12 Accenture PLC
7.1.13 Tech Mahindra
8. VENDOR POSITIONING ANALYSIS OF ENGINEERING SERVICE PROVIDERS
9. FUTURE OUTLOOK OF THE MARKET
Europe Engineering Research And Development (ER&D) Services Industry Segmentation
ER&D Services encompass a range of offerings tailored to enterprises, focusing on the design and development of various products, from devices and equipment to platforms and applications. These services pave the way for the eventual sale of the product, whether through software development or traditional manufacturing. The ER&D spectrum typically includes software, embedded, and mechanical engineering services, delineating the diverse expertise involved.
Europe's engineering research and development (ER&D) services market is segmented by service provider type (global capability centers (GCCs), engineering service providers (ESPs)), industry vertical (automotive, industrial, aerospace and defense, consumer electronics, semiconductor, BFSI, other industry verticals (includes retail, healthcare, IT and Telecom)), service line (mechanical and electrical engineering services, embedded engineering services, software engineering services), country (United Kingdom, Germany, and France). The market sizes and forecasts are provided in terms of value (USD) for the above segments.
| By Service Provider Type (Market Size Estimates and Forecasts, Associated Trends) | |
| Global Capability Centers (GCCs) | |
| Engineering Service Providers (ESPs) |
| By Industry Vertical (Market Size Estimates and Forecasts, Associated Trends) | |
| Automotive | |
| Industrial | |
| Aerospace and Defence | |
| Consumer Electronics | |
| Semiconductor | |
| BFSI | |
| Other Industry Verticals (includes Retail, Healthcare, IT and Telecom) |
| By Service Line (Market Size Estimates and Forecasts, Associated Trends) | |
| Mechanical and Electrical Engineering Services | |
| Embedded Engineering Services | |
| Software Engineering Services |
| By Country (Market Size Estimates and Forecasts, Associated Trends) | |
| United Kingdom | |
| Germany | |
| France |
Europe Engineering Research And Development (ER&D) Services Market Research FAQs
How big is the Europe Engineering Research And Development Services Market?
The Europe Engineering Research And Development Services Market size is expected to reach USD 227.39 billion in 2024 and grow at a CAGR of 11.05% to reach USD 384.03 billion by 2029.
What is the current Europe Engineering Research And Development Services Market size?
In 2024, the Europe Engineering Research And Development Services Market size is expected to reach USD 227.39 billion.
Who are the key players in Europe Engineering Research And Development Services Market?
Cyient, Alten, Akkodis, Infosys and Cagemini SE are the major companies operating in the Europe Engineering Research And Development Services Market.
What years does this Europe Engineering Research And Development Services Market cover, and what was the market size in 2023?
In 2023, the Europe Engineering Research And Development Services Market size was estimated at USD 202.26 billion. The report covers the Europe Engineering Research And Development Services Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Europe Engineering Research And Development Services Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Europe Engineering Research And Development (ER&D) Services Industry Report
Statistics for the 2024 Europe Engineering Research And Development (ER&D) Services market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Europe Engineering Research And Development (ER&D) Services analysis includes a market forecast outlook for 2024 to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
Europe Engineering Research And Development (ER&D) Services Market Report Snapshots
