29-Jun-2023 | Zion Market Research
The global aerospace engineering services outsourcing market size was worth around USD 78.14 billion in 2022 and is predicted to grow to around USD 312.55 billion by 2030 with a compound annual growth rate (CAGR) of roughly 18.92% between 2023 and 2030.
Aerospace engineering is a specialized field of engineering that deals specifically with the design, development, manufacturing, and maintenance of aerial objects such as aircraft and spacecraft. It involves the use of advanced scientific and engineering principles which are constantly evolving with time and as the competition in the commercial market continues to grow. Aerospace engineering deals with two primary areas. Aeronautical engineering and astronautical engineering. The former is responsible for the safe operation of an aircraft within the Earth’s atmosphere while the latter is used for the design and maintenance of spacecraft used for space exploration. Generally, companies that operate in the aerospace industry outsource or delegate some parts of related activities to external or third-party service providers and this process is known as aerospace engineering services outsourcing. As companies seek to increase their final output, they are more likely to undertake assistance from experts, and thus service providers can expect more demand in the coming years.
This review is based on a report by Zion Market Research, titled "Aerospace Engineering Services Outsourcing Market By Location (Offshore And Onshore), By Component (Software And Hardware), By Function (Maintenance Process, Production Process, Design, And Simulation & Digital Validation), By Service (Embedded Software Engineering, Mechanical Engineering, Electric/Electronic Engineering, And Others), And By Region - Global And Regional Industry Overview, Market Intelligence, Comprehensive Analysis, Historical Data, And Forecasts 2023 – 2030"- Report at https://www.zionmarketresearch.com/report/aerospace-engineering-services-outsourcing-market
The global aerospace engineering services outsourcing market is expected to grow due to the rising space exploration activities undertaken by several countries as each economy is working toward establishing a strong foothold in outer space. For instance, the Weizmann Institute of Science and the Israel Space Agency are working toward launching ULTRASAT around the Earth’s geostationary orbit by 2026 and the National Aeronautics and Space Administration (NASA) is expected to become a part of this program. As companies are looking for measures that help them create cost-efficient programs, they are likely to outsource certain activities related to aerospace engineering. This either means outsourcing human resource requirements, hardware or software requirements, or any other aspect. Furthermore, delegating certain tasks to external services assists in providing access to flexibility and scalability as companies will only have to pay for the services that are used. Depending on the final requirement, businesses can either scale up or scale down resource consumption in a short time. They can also focus on core business competencies while external experts perform their role in helping the company reach its vision.
The global aerospace engineering services outsourcing market is expected to face growth restrictions driven by the risk associated with high dependency on external suppliers. Any disruption in the supply chain can have a long-lasting impact. Additionally, limited control over processes and difficulty in ensuring quality control or compliance are added growth barriers.
Geographical expansion and market penetration may provide growth opportunities while managing effective communication and collaboration could challenge market expansion.
The global aerospace engineering services outsourcing market is segmented based on location, component, function, service, and region.
Based on location, the global market segments are offshore and onshore.
Based on component, the global aerospace engineering services outsourcing industry is divided into software and hardware. During the forecast period, the hardware may grow at a CAGR of 25.14%. This deals with partnering with other companies that act as primary suppliers of hardware raw materials including structural components, avionics systems, propulsion devices, instrumentation & sensors, environmental control systems, electrical facilities, and actuators & mechanisms. Each hardware component is further divided into sub-segments which showcases the complexity grade of the aerospace sector. For instance, avionics systems consist of sub-technologies used in an aircraft for communication, navigation, control, and monitoring. Lockheed Martin, a leading player in the aerospace sector, had a market cap of USD 113.57 billion as of May 2023.
Based on function, the global industry is divided into maintenance process, production process, design, and simulation & digital validation.
Based on service, the global aerospace engineering services outsourcing industry is segmented into embedded software engineering, mechanical engineering, electric/electronic engineering, and others. The sector registered the highest growth in the mechanical engineering segment. It is projected to grow at a CAGR of 24.6% by 2030. The segmental growth is a direct result of the increasing need for specialized skill sets and expertise since typically third parties are better aware of regulatory compliance understanding. They are also known to have extensive domain-specific knowledge and familiarity with aerospace engineering standards. Moreover, scalability and cost efficiency achieved through outsourcing these activities are known to be beneficial to all parties involved.
North America was the leading region in the global aerospace engineering services outsourcing market in 2022 and it is expected to continue its growth streak. This is mostly due to the high dependency of several other nations on the US private and military aerospace sector for the supply of advanced aerospace engineering capabilities. The region witnesses high investments every year which are used for research & development allowing the country to stay ahead in terms of technology. Europe is expected to grow at a CAGR of 24.9% by 2030. The regional market may face certain challenges due to slow overall economic growth. However, Germany may register higher revenue due to the presence of large-scale companies dominating the global aerospace sector. Asia-Pacific is likely to see better revenue as countries such as China and India increase their space exploration investments. The entry of international aerospace companies in regional countries could also aid higher growth rates.
The global aerospace engineering services outsourcing market is led by players like:
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