$1.1 trillion to be spent on engineering services by 2020
Global spending on engineering services is large and rising – constituting about 2% of global GDP, and companies are increasingly moving these high-value services to emerging markets as the next step in globalization, according to Booz Allen Hamilton. Current spending on engineering services ($750 bln in 2004) is projected to increase to $1.1 trillion by 2020. The market is highly fragmented by industry, with Automotive at 19%, Aerospace at 8% and Utilities at 3% in 2004. High-Tech/ Telecom is the dominant and fastest growing sector, with 30% of the market. While today only $10-15 bln of engineering services is offshored, the market is expected to grow to $150 -225 bln by 2020. India’s current revenue base in the offshored engineering services market is about $1.5 bln – relatively small as compared to its information technology and business process outsourcing sectors. India is well-positioned to increase its market share of engineering offshoring from 12% to 30% by 2020. The potential engineering market in India could exceed $60 bln by 2020.