Research And Development Outsourcing Services Global Market Report 2024

Research and development outsourcing services entail the delegation of R&D responsibilities and operations by a company to another entity, a departure from the tasks traditionally handled by the company's own staff. The primary objectives of R&D outsourcing are to curtail costs, mitigate business risks, and expedite entry into the product market. This outsourcing practice enhances organizational efficiency, shortens product development cycles, provides increased access to advanced technology, and optimizes resource utilization.

The principal categories of research and development outsourcing services include onshore and offshore. Onshore involves obtaining services from individuals not affiliated with a corporation but residing in the same country. Small, medium, and large enterprises in diverse industries such as automotive, consumer electronics, telecommunications, semiconductor, aerospace, healthcare, and construction commonly utilize research and development outsourcing services.

The research and development outsourcing services market research report is one of a series of new reports that provides research and development outsourcing services market statistics, including research and development outsourcing services industry global market size, regional shares, competitors with a research and development outsourcing services market share, detailed research and development outsourcing services market segments, market trends and opportunities, and any further data you may need to thrive in the research and development outsourcing services industry. This research and development outsourcing services market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The research and development outsourcing services market size has grown strongly in recent years. It will grow from $8.25 billion in 2023 to $8.94 billion in 2024 at a compound annual growth rate (CAGR) of 8.4%. The historical period's growth can be ascribed to heightened complexity in R&D activities, an escalating demand for cost optimization, intensified market competition, an increasing need for specialized expertise, and the imperative for faster time-to-market.

The research and development outsourcing services market size is expected to see strong growth in the next few years. It will grow to $12.63 billion in 2028 at a compound annual growth rate (CAGR) of 9.0%. The expansion projected for the forecast period can be linked to the rising adoption of cloud-based services, an increasing appetite for tailored R&D services, growing demand for R&D services in emerging economies, and a strategic emphasis on core competencies by outsourcing non-core R&D functions. Prominent trends in the forecast period involve the integration of artificial intelligence and machine learning, the broadening of outsourcing services beyond traditional industries, a heightened reliance on data analytics for research insights, a surge in the demand for end-to-end R&D outsourcing solutions, and collaborative efforts between small and large enterprises.

The research and development outsourcing services market is expected to experience growth due to enterprises' increased access to global talent outsourcing services. Companies are strategically leveraging talent from around the world to meet their diverse demands and requirements. This global talent pool enhances the diversity and experience within organizations, promoting greater mobility and facilitating interaction with workers from different cultures. According to the 2022 Global Software Outsourcing Trends and Rates Guide report by Accelerance, a software development resource outsourcing advisor, 64% of companies outsource their application development to external partners, such as IT outsourcing firms, indicating a growing reliance on global talent. Mid-sized businesses, in particular, are driving the demand for software outsourcing, with average outsourcing rates increasing from 9.1% in 2020 to 11.8%. Therefore, the increasing access to global outsourcing services is poised to drive the research and development outsourcing services market.

The research and development outsourcing services market is anticipated to receive a boost from the growing demand in the consumer electronics industry. This industry encompasses the production and sale of electronic devices for personal use, such as smartphones, televisions, and laptops. Outsourcing research and development services in the consumer electronics sector is a prevalent practice, allowing companies to tap into specialized expertise and expedite product innovation while managing costs. For example, in May 2023, the Japan Electronics and Information Technology Industries Association reported that total electronic equipment production in Japan reached $52,36,535 million (¥771,457 million), with consumer electronics production increasing from $1,714,724 million (¥25,268 million) in May 2022 to $2,178,430 million (¥32,099 million) in May 2023. Therefore, the rising demand from the consumer electronics industry is a significant driver for the research and development outsourcing services market.

Partnerships and collaborations are emerging as a key trend in the research and development outsourcing market, with major technology providers entering into strategic alliances to advance developments. For instance, in January 2022, Eli Lilly and Company, a US-based pharmaceutical company, partnered with Evotec SE, a Germany-based drug discovery and development company, for metabolic disease drug discovery. This collaboration leverages Evotec's expertise and extensive database to identify potential drug candidates for the treatment of diabetes and chronic kidney diseases.

Major players in the research and development outsourcing services market are prioritizing expansion to provide reliable services globally. Expansion is essential for accessing new markets, diverse talent pools, and fostering innovation. For instance, in November 2022, L&T Technology Services Limited, an India-based technology company, unveiled its Engineering Research and Development (ER&D) Center in Toronto, Ontario (Canada), focusing on providing digital solutions for the transportation sector. This center aims to support LTTS clients in Canada and North America with innovative digital engineering initiatives.

In November 2021, Softline Group, a London-based provider of IT solutions and services, acquired the software development outsourcing business of the Aplana Group, a Europe-based software company. This strategic move enables Softline to expand trade in customs development and export Russian competencies and technologies worldwide.

Major companies operating in the in the research and development outsourcing services market report are Cyient Limited, GlobalLogic Inc., HCL Technologies Ltd., Tech Mahindra Ltd., Mindtree Ltd., Accenture plc, Altair Engineering Inc., Capgemini Service SAS, Cisco Systems Inc., DXC Technology Company, Hitachi Ltd., Kistler Holding AG, KPIT Technologies Ltd., QuEST Global Services Pte. Ltd., Sonata Software Ltd., Tata Consultancy Services Ltd., Wipro Ltd., Aricent Inc., Cognizant Technology Solutions Corp., EPAM Systems Inc., Luxoft Holding Inc., Synechron Inc., WNS Global Services Pvt. Ltd., Infosys BPM Ltd., Aspire Systems Inc., Microsoft Corporation, Samsung Electronics Co. Ltd., Intel Corporation, Beyondsoft Corporation, Blue Star Infotech Ltd., Asahi Kasei Corporation, L&T Technology Services Limited

North America was the largest region in the research and development outsourcing services market in 2023. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the research and development outsourcing services market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa

The countries covered in the research and development outsourcing services market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Italy, Canada, Spain.

The research and development outsourcing services market includes revenues earned by entities by providing services such as component innovations, design, new process innovations, new product innovations, and software design,. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified)).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.


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