Aerospace Engineering Services Outsourcing Market

Market Overview:

The global aerospace engineering services outsourcing market size reached US$ 95.1 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 541.0 Billion by 2032, exhibiting a growth rate (CAGR) of 20.67% during 2024-2032. The growing demand for cost optimization and resource efficiency solutions, rising complexity of aerospace technologies, and increasing demand for innovative products and services in the aerospace sector are some of the major factors propelling the market.

Aerospace engineering services outsourcing comprises the delegation of aerospace engineering tasks to external specialized service providers. It allows companies within the aerospace industry to provide expertise and resources of external partners to address various engineering challenges and project requirements. It offers cost optimization, access to a wider talent pool, and flexibility in managing workloads. As it allows aerospace firms to focus on core competencies and innovation while ensuring the timely and efficient execution of projects, the demand for aerospace engineering services outsourcing is increasing across the globe.

At present, the rising adoption of aerospace engineering services outsourcing to enhance efficiency, reduce time-to-market, and maintain competitiveness is contributing to the growth of the market. In line with this, the increasing employment of outsourcing solutions that mitigate risks associated with non-compliance and ensure that engineering tasks are executed within the bounds of industry norms and regulations is strengthening the growth of the market. Additionally, the growing number of air travel for business and leisure purposes among individuals around the world is positively influencing the market. In addition, rising investments in the military and civil aviation sectors are providing lucrative growth opportunities to industry investors. Furthermore, the wide availability of skilled engineering talent across the globe is bolstering the growth of the market. Besides this, the rising adoption of flexible outsourcing options in the aerospace industry is supporting the growth of the market.

Aerospace Engineering Services Outsourcing Market Trends/Drivers:

Rising complexity of aerospace technologies

The rising complexity of aerospace technologies due to the advancements in areas, such as avionics, materials science, and propulsion systems, is contributing to the growth of the market. In addition, aerospace companies often lack in-house resources with the requisite specialized expertise to address these complexities comprehensively. As a result, outsourcing engineering services provide a strategic solution to tap into external knowledge and skills. Moreover, outsourcing partners bring domain-specific proficiency that is crucial for designing, testing, and validating intricate aerospace components and systems. Furthermore, aerospace firms can ensure the development of these solutions while maintaining a competitive edge in the market by collaborating with specialized providers.

Increasing demand for cost optimization and resource efficiency solutions

Aerospace engineering services outsourcing offers an enhanced approach to managing costs in an industry characterized by high research and development expenditures. In line with this, maintaining an in-house engineering team requires substantial investments in infrastructure, training, and personnel management. Apart from this, companies can redirect resources for core business functions while benefiting from the expertise of external partners through outsourcing, which is offering a positive market outlook. This approach also provides flexibility in managing fluctuating workloads and enables businesses to scale their engineering efforts efficiently without the constraints of fixed in-house capacity. Furthermore, the rising adoption of these outsourcing services due to their cost-effectiveness and resource efficiency is bolstering the growth of the market.

Growing demand for innovative products in the aerospace sector

There is a rise in the demand for innovative products in the aerospace industry to enhance efficiency and maintain a competitive edge. In addition, outsourcing engineering services enables companies to encourage research and development (R&D) activities by leveraging the experience and capabilities of external partners. Collaborating with specialized providers allows aerospace firms to tap into different perspectives and cross-industry insights that facilitate the creation of novel solutions. Besides this, companies can focus on strategic innovation by focusing their internal teams on core competencies rather than spreading resources across various engineering tasks. Furthermore, the rising adoption of outsourcing due to the increasing demand for advanced technologies is propelling the growth of the market.

Aerospace Engineering Services Outsourcing Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global aerospace engineering services outsourcing market report, along with forecasts at the global, regional, and country levels for 2024-2032. Our report has categorized the market based on component, service, and location.

Breakup by Component:

• Hardware
• Software
   

Hardware represents the largest market segment

The report has provided a detailed breakup and analysis of the market based on the component. This includes hardware and software. According to the report, hardware represented the largest segment. Hardware is an essential component that comprises the tangible physical components used in aerospace systems and technologies. These components include avionics systems, sensors, actuators, propulsion systems, mechanical structures, and electronic modules. Hardware engineering involves designing, developing, and testing these physical elements to ensure their functionality, reliability, and adherence to stringent industry standards. Hardware engineering plays a crucial role in creating enhanced and efficient systems that withstand the operational environments of aviation and space exploration. Outsourcing hardware engineering services allows aerospace companies to access specialized expertise for designing intricate components, optimizing performance, and ensuring compatibility with integrated systems.

Breakup by Service:

• Design and Engineering
• Manufacturing Support
• Security and Certification
• After-Market Services
   

Manufacturing support accounts for the majority of the market share

The report has provided a detailed breakup and analysis of the market based on the service. This includes design and engineering, manufacturing support, security and certification, and after-market services. According to the report, manufacturing support represented the largest segment. Manufacturing support services comprise a range of activities that facilitate the production and assembly of aerospace components and systems. These services comprise process planning, quality control, supply chain management, and production optimization. Aerospace companies can leverage external expertise to streamline production processes, enhance product quality, and ensure adherence to strict industry regulations by collaborating with outsourcing partners for manufacturing support. Manufacturing support services often involve the application of advanced technologies, such as automation and additive manufacturing, to improve efficiency and reduce production costs.

Breakup by Location:

• On-Shore
• Off-Shore
   

On-shore holds the biggest market share

The report has provided a detailed breakup and analysis of the market based on the location. This includes on-shore and off-shore. According to the report, on-shore represented the largest segment. On-shore outsourcing involves collaborating with external service providers within the same country or geographic region. This approach offers distinct advantages, such as cultural and linguistic alignment, proximity for easier communication, and potential regulatory familiarity. On-shore outsourcing can also address concerns related to intellectual property protection and data security, often associated with off-shore outsourcing. Aerospace firms can tap into local talent pools and leverage skilled professionals who understand the local industry landscape through on-shore outsourcing. This approach provides a balance between cost-effectiveness and proximity, which makes it an appealing option for companies seeking to outsource while maintaining a degree of familiarity and control over their engineering projects.

Breakup by Region:

• North America
  • United States
  • Canada
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Russia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa
   

North America exhibits a clear dominance, accounting for the largest aerospace engineering services outsourcing market share

The market research report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. According to the report, North America accounted for the largest market share.

North America held the biggest market share due to the presence of a highly skilled workforce, coupled with advanced infrastructure. Apart from this, favorable business environments are contributing to the growth of the market in the region. In line with this, the increasing development of advanced aerospace solutions is bolstering the growth of the market in the North America region. Furthermore, the rising demand for improved aerospace solutions is impelling the growth of the market.

Competitive Landscape:

Key players are focusing on building specialized expertise in niche areas of aerospace engineering, such as avionics, propulsion systems, and structural design. This allows them to offer highly tailored solutions to aerospace clients seeking in-depth technical knowledge. In line with this, they are investing significantly in research and development (R&D) activities to drive innovation. They are working on developing next-generation technologies, materials, and processes that can improve aircraft performance, safety, and efficiency. Apart from this, many companies are embracing digital technologies, such as simulation, data analytics, and virtual reality (VR), to optimize engineering processes, reduce development cycles, and enhance collaboration among global teams.

The report has provided a comprehensive analysis of the competitive landscape in the market. Detailed profiles of all major companies have also been provided. Some of the key players in the market include:

• Akka Technologies (Adecco Group)
• Altair Engineering Inc.
• ALTEN Group
• Bertrandt AG
• Capgemini Engineering (Capgemini SE)
• Edison Welding Institute
• Honeywell International Inc.
• L&T Technology Services Limited (Larsen & Toubro Limited)
• Lisi SA

Recent Developments:

• In 2022, Altair, a global leader in computational science and artificial intelligence (AI), acquired Concept Engineering, the leading provider of electronic system visualization software that accelerates the development, manufacture, and service of complex electrical and electronic systems in various industries, such as aerospace, automotive, and industrial.
• In 2023, Honeywell acquired the heads-up display (HUD) technology assets of Swedish aerospace and defense company, Saab. This assists in strengthening Honeywell’s avionics and aviation safety product lines by improving situational awareness, especially at night or in difficult weather conditions.
• In 2023, ALTEN Group, headquartered in Paris, France and a market leader in engineering and technology consulting services, completed the strategic acquisition of Accord Global Technology Solutions. This strategic acquisition combines ALTEN's scale and technology diversity with the digital innovation and know-how of Accord Global Technology Solutions in the aerospace and automotive industries.

Aerospace Engineering Services Outsourcing Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the aerospace engineering services outsourcing market from 2018-2032.
• The research report study provides the latest information on the market drivers, challenges, and opportunities in the global aerospace engineering services outsourcing market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the aerospace engineering services outsourcing industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.