North America Engineering Research And Development (ER&D) Services Market Size & Share Analysis - Industry Research Report

North America Engineering Research And Development (ER&D) Services Market Analysis

The North America Engineering Research And Development Services Market size is estimated at USD 1 trillion in 2024, and is expected to reach USD 1.55 trillion by 2029, growing at a CAGR of 9.16% during the forecast period (2024-2029).

The Engineering Research and Development (ER&D) services market in North America is a dynamic sector characterized by a growing appetite for innovation, advanced technologies, and cost-effective solutions spanning multiple industries.

Technological advancements, including artificial intelligence (AI), machine learning (ML), the Internet of Things (IoT), and 5G connectivity, are pivotal drivers in North America's ER&D services market. Companies harness these technologies to drive innovation and craft cutting-edge products, bolstering their competitive edge. For instance, the automotive sector is embracing AI and IoT for autonomous vehicles and smart mobility solutions.
Businesses face mounting pressure to cut costs without compromising quality. By outsourcing ER&D services to specialized firms, companies can realize substantial cost savings. This approach grants access to skilled engineers and advanced tools, all without hefty in-house investments. Notably, this trend is prominent in sectors like manufacturing and healthcare, where cost-effectiveness is paramount.
The North American market is increasingly prioritizing sustainability and environmental responsibility. Companies are integrating sustainable practices into their engineering, from creating energy-efficient products to curbing carbon footprints. This shift is fueling the demand for ER&D services that specialize in sustainable design and development.
The proliferation of the Internet of Things (IoT) stands out as a key driver in North America's ER&D services market. IoT interconnects devices, enabling seamless data sharing over the internet. This connectivity facilitates real-time monitoring, data collection, and automation, offering a host of benefits across industries and propelling the need for ER&D services.
However, a notable challenge looms over the North American ER&D services market: a shortage of skilled professionals. The rapid tech evolution has spiked demand for engineers with specialized expertise in AI, cybersecurity, and advanced manufacturing. Yet, the talent supply falls short, intensifying the competition among companies vying to attract and retain these qualified professionals.

North America Engineering Research And Development (ER&D) Services Market Trends

Software Engineering Services to drive the Market

Agile and DevOps methodologies are reshaping software engineering services, fostering collaboration, expediting development cycles, and elevating product quality. These approaches empower firms to streamline software deliveries, swiftly adapt to market dynamics, and bolster their competitive edge.
Cloud-native development is swiftly gaining traction in the software engineering landscape. By harnessing cloud platforms, enterprises can streamline application development, deployment, and scalability. This shift not only fuels innovation and agility but also aids in optimizing IT infrastructures and curbing operational expenditures.
With the rapid pace of digital transformation, cybersecurity's significance in software engineering has surged. Companies are ramping up investments in robust security protocols to shield their software assets and data from cyber threats. Measures include adopting secure coding practices, regular security audits, and embedding security features throughout the software development lifecycle.
Artificial intelligence (AI) and machine learning (ML) are increasingly being woven into software engineering services, catalyzing innovation across diverse sectors. These technologies are instrumental in crafting intelligent applications that automate tasks, elevate decision-making, and curate personalized user experiences. Notably, this trend is prominently reshaping industries like finance, healthcare, and retail.
For instance, since 2018, the U.S. government has consistently ramped up its spending on artificial intelligence (AI), machine learning (ML), and autonomy. This investment surged from around USD 1.38 billion in 2018 to USD 3.33 billion by 2023. Notably, in 2023, the lion's share of this budget was channeled into machine learning initiatives.

North America Engineering Research And Development (ER&D) Services Market: Spending in artificial intelligence (AI), machine learning (ML), and Autonomy, in USD Billion, By Segment, United States Government, 2018 - 2023

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United States is Expected to Hold a Major Share of the Market

The United States, spearheading R&D investment, draws substantial funding from both its public and private sectors. This robust financial backing not only fuels innovation but also propels the advancement of pioneering technologies in sectors spanning automotive, aerospace, healthcare, and IT. Consequently, it bolsters growth within the ER&D services market.
For instance, during fiscal year 2023, the US federal government allocated around USD 190 billion towards research and development (R&D), marking a notable 13% surge from the previous fiscal year. This increase stands out as one of the most significant jumps in recent history. Against a backdrop of shifting geopolitics and intensifying global competition, legislative moves like the CHIPS and Science Act, alongside the National Quantum Initiative Act, underscore the nation's commitment to cementing its leadership in global R&D for years to come.
In the U.S. ER&D market, a pivotal trend is the integration of advanced manufacturing techniques and principles from Industry 4.0. Automation, robotics, IoT, and smart factories are revolutionizing manufacturing, resulting in heightened efficiency, cost savings, and superior product standards.
The U.S. stands out with its robust tech giants and a dynamic startup culture, fueling the need for ER&D services. These firms perpetually pursue cutting-edge solutions and top-tier engineering services to stay ahead and spearhead technological progress.
For instance, Microsoft set a new record with its 2023 fiscal year research and development spending, reaching approximately USD 27 billion. This places Microsoft as the second-highest spender globally in the software and computer services sector, trailing only Alphabet, Google's parent company.

North America Engineering Research And Development (ER&D) Services Market: Microsoft's expenditure on research and development, in USD million, 2010 - 2023

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North America Engineering Research And Development (ER&D) Services Industry Overview

The North America Engineering Research And Development (ER&D) Services Market is fragmented, with the presence of major players and numerous regional companies. Key players in the market are adopting strategies such as partnerships, agreements, innovations, and acquisitions to enhance their service offerings and gain a sustainable competitive advantage.

April 2024 - The US Army Engineer Research and Development Center (ERDC) in Vicksburg, Mississippi, and the University of Louisiana Monroe have formalized an Education Partnership Agreement (EPA). This agreement lays the groundwork for collaborative educational initiatives, encompassing shared laboratory resources and joint research endeavors. The primary aim of this partnership is to bolster and promote studies in STEM fields - Science, Technology, Engineering, and Mathematics. ULM's existing programs, such as Unmanned Aircraft Systems Management, Strategic Communications, and others, are poised to benefit from this collaboration.
April 2024 - The University of West Alabama has forged a strategic partnership with the United States Army Engineer Research and Development Center (ERDC). This collaboration aims to bolster and promote studies in the STEM fields—science, technology, engineering, and mathematics.

North America Engineering Research And Development (ER&D) Services Market Leaders

Tata Technologies Inc.
Infosys Limited
Wipro Limited
Tech Mahindra Limited
HCL Technologies Limited

*Disclaimer: Major Players sorted in no particular order

North America Engineering Research And Development (ER&D) Services Market Concentration

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North America Engineering Research And Development (ER&D) Services Market News

July 2024: Mitacs and the Natural Sciences and Engineering Research Council (NSERC) have inked a memorandum of understanding, cementing their collaboration in research programs. This partnership not only formalizes their existing relationship but also enhances flexibility for university researchers and industry partners. By aligning efforts, these stakeholders can now craft more robust research and training strategies, ultimately driving innovation in Canada.
January 2024: The U.S. National Science Foundation, in collaboration with NVIDIA, has initiated the National Artificial Intelligence Research Resource pilot program. This program, supported by a coalition of 10 federal agencies, private-sector entities, and nonprofits, seeks to democratize access to essential AI tools, fostering responsible innovation and discovery.

North America Engineering Research And Development (ER&D) Services Market Report - Table of Contents

1. INTRODUCTION
1. 1.1 Study Assumptions and Market Definition
2. 1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
1. 4.1 Market Overview
2. 4.2 Industry Attractiveness - Porter's Five Forces Analysis
  1. 4.2.1 Threat of New Entrants
  2. 4.2.2 Bargaining Power of Buyers/Consumers
  3. 4.2.3 Bargaining Power of Suppliers
  4. 4.2.4 Threat of Substitute Products
  5. 4.2.5 Intensity of Competitive Rivalry
3. 4.3 Regulatory Landscape and Policy Developments
4. 4.4 Assessment of Impact of Macroeconomic Trends
5. 4.5 Industry Ecosystem Analysis
5. MARKET DYNAMICS
1. 5.1 Market Drivers
2. 5.2 Market Restraints
3. 5.3 Key Base Indicator Analysis
  1. 5.3.1 Current Available Talent Pool of Engineers
  2. 5.3.2 Talent Upskill Initiatives (Government and Industry Collaborations)
6. MARKET SEGMENTATION
1. 6.1 By Service Provider Type
  1. 6.1.1 Global Capability Centers (GCCs)
  2. 6.1.2 Engineering Service Providers (ESPs)
2. 6.2 By Industry Vertical
  1. 6.2.1 Automotive
  2. 6.2.2 Industrial
  3. 6.2.3 Aerospace and Defence
  4. 6.2.4 Consumer Electronics
  5. 6.2.5 Semiconductor
  6. 6.2.6 BFSI
  7. 6.2.7 Others (includes Retail, Healthcare, IT and Telecom)
3. 6.3 By Service Line
  1. 6.3.1 Mechanical and Electrical Engineering Services
  2. 6.3.2 Embedded Engineering Services
  3. 6.3.3 Software Engineering Services
4. 6.4 By Geography
  1. 6.4.1 United States
  2. 6.4.2 Canada
7. COMPETITIVE LANDSCAPE
1. 7.1 Company Profiles
  1. 7.1.1 Tata Technologies Inc.
  2. 7.1.2 Infosys Limited
  3. 7.1.3 Wipro Limited
  4. 7.1.4 Tech Mahindra Limited
  5. 7.1.5 HCL Technologies Limited
  6. 7.1.6 L&T Technology Services Limited
  7. 7.1.7 Cyient Limited
  8. 7.1.8 QuEST Global Services Pte Ltd
  9. 7.1.9 EPAM Systems, Inc.
  10. 7.1.10 Altran Engineering Solutions
  11. 7.1.11 Jacobs Engineering Group Inc.
  12. 7.1.12 AECOM
  13. 7.1.13 Fluor Corporation
  14. 7.1.14 WSP Global Inc.
  15. 7.1.15 Stantec Inc.
  16. 7.1.16 HDR, Inc.
  17. 7.1.17 Parsons Corporation
  18. 7.1.18 Burns & McDonnell Engineering Company, Inc.
  19. 7.1.19 Arcadis North America
  20. 7.1.20 Black & Veatch Corporation
8. VENDOR POSITIONING ANALYSIS OF ENGINEERING SERVICE PROVIDERS
9. FUTURE OUTLOOK OF THE MARKET

**Subject to Availability

*In the final report, the Company Profiles will be segmented by Pure-Play Engineering Service Providers (ESPs) and Multi-Disciplinary Engineering Service Providers (ESPs)

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North America Engineering Research And Development (ER&D) Services Industry Segmentation

Engineering research and development (R&D) embodies the systematic approach engineers employ to innovate and create new technologies, leading to product design and realization. R&D engineers craft and enhance products and technologies by researching, designing, and rigorously testing their creations.

The Report Covers North American engineering Research and Development (ER&D) Services Companies and the Market is Segmented by Service Provider Type (Global Capability Centers (GCCs), Engineering Service Providers (ESPs)), by Industry Vertical (Automotive, Industrial, Aerospace, and Defense, Consumer Electronics, Semiconductor, BFSI, Others), by Service Line (Mechanical and Electrical Engineering Services, Embedded Engineering Services, Software Engineering Services), by Geography (United States, Canada).

The Market Sizes and Forecasts are Provided in Terms of Value (USD) for all the Above Segments.

By Service Provider Type
		Global Capability Centers (GCCs)
		Engineering Service Providers (ESPs)

By Industry Vertical
		Automotive
		Industrial
		Aerospace and Defence
		Consumer Electronics
		Semiconductor
		BFSI
		Others (includes Retail, Healthcare, IT and Telecom)

By Service Line
		Mechanical and Electrical Engineering Services
		Embedded Engineering Services
		Software Engineering Services

By Geography
		United States
		Canada

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North America Engineering Research And Development (ER&D) Services Market Research FAQs

How big is the North America Engineering Research And Development Services Market?

The North America Engineering Research And Development Services Market size is expected to reach USD 1 trillion in 2024 and grow at a CAGR of 9.16% to reach USD 1.55 trillion by 2029.

What is the current North America Engineering Research And Development Services Market size?

In 2024, the North America Engineering Research And Development Services Market size is expected to reach USD 1 trillion.

Who are the key players in North America Engineering Research And Development Services Market?

Tata Technologies Inc., Infosys Limited, Wipro Limited, Tech Mahindra Limited and HCL Technologies Limited are the major companies operating in the North America Engineering Research And Development Services Market.

What years does this North America Engineering Research And Development Services Market cover, and what was the market size in 2023?

In 2023, the North America Engineering Research And Development Services Market size was estimated at USD 0.91 trillion. The report covers the North America Engineering Research And Development Services Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the North America Engineering Research And Development Services Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.

North America Engineering Research And Development (ER&D) Services Industry Report

Statistics for the 2024 North America Engineering Research And Development (ER&D) Services market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. North America 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.

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Study Period	2019 - 2029
Base Year For Estimation	2023
Market Size (2024)	USD 1 Trillion
Market Size (2029)	USD 1.55 Trillion
CAGR (2024 - 2029)	9.16 %
Market Concentration	Low
Major Players *Disclaimer: Major Players sorted in no particular order

Study Period:
CAGR:
Countries/ Region Covered:
Major Players:

North America Engineering Research And Development (ER&D) Services Market Size & Share Analysis - Growth Trends & Forecast (2024 - 2029)