About R&D Outsourcing
R&D outsourcing refers to the outsourcing of R&D activities to third-party service providers for designing, prototyping, testing, production, and sales. The survival in extremely competitive market environments has forced organizations to outsource their R&D operations to third-party service providers. R&D outsourcing allows organizations to develop innovative and cost-effective products in a short time and earn more profit.
Attributes | Details |
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Study Period | 2018-2030 |
Base Year | 2023 |
Unit | Value (USD Million) |
CAGR | 8.35% |
The global R&D outsourcing service market is moderately fragmented. The level of competition among the companies in the R&D outsourcing market is intense and the focus is towards developing new technologies and offering customized products to the customers. The companies are seeking ways to reduce cost, improve product quality and production efficiency. During the coming years, a number of companies will also follow the merger and acquisition and many more strategies to sustain in this competitive market. Analyst at AMA Research estimates that India Players will contribute the maximum growth to Global R&D Outsourcing market throughout the forecasted period. Established and emerging Players should take a closer view at their existing organizations and reinvent traditional business and operating models to adapt to the future.
HCL Technologies (India), Infosys (India), TCS (India), Tech Mahindra (India), Wipro (India), Aricent, Inc. (United States), Aspire Systems, Inc. (India), Samsung Electronics (South Korea), Microsoft (United States), Intel (United States), Beyondsoft Corp. (China), Blue Star Infotech, Ltd. (India), GlobalLogic (United States), Cyient (India), Luxoft (Switzerland), Mindtree (India), QuEST Global Services (Singapore), KPIT Technologies Ltd (India) and Larsen & Toubro Ltd (India) are some of the key players that are part of study coverage. Additionally, the Players which are also part of the research coverage are Sonata Software Ltd (India) and Symphony Teleca Corp (India).
Segmentation Overview
AMA Research has segmented the market of Global R&D Outsourcing market by Type (Basic Research, Applied Research and Development Research) and Region.
On the basis of geography, the market of R&D Outsourcing has been segmented into South America (Brazil, Argentina, Rest of South America), Asia Pacific (China, Japan, India, South Korea, Taiwan, Australia, Rest of Asia-Pacific), Europe (Germany, France, Italy, United Kingdom, Netherlands, Rest of Europe), MEA (Middle East, Africa), North America (United States, Canada, Mexico). North America region held largest market share in the year 2023. If we see Market by Functions , the sub-segment i.e. Product Designing will boost the R&D Outsourcing market. Additionally, the rising demand from SMEs and various industry verticals gives enough cushion to market growth. If we see Market by End User, the sub-segment i.e. Automotive will boost the R&D Outsourcing market. Additionally, the rising demand from SMEs and various industry verticals gives enough cushion to market growth.
Influencing Trend:
Evolution of Industrial IoT and M2M Communication, Growing Adoption of Predictive Analysis Techniques and Emergence of Artificial Intelligence
Market Growth Drivers:
Cost-Effective Solution for Research and Development Activities, Rise of R&D Outsourcing in the Pharmaceutical Industry and Reduces Risk
Challenges:
Establishing an Effective Communication Between Service Providers and Clients and Identification of Service Providers with Required Expertise
Restraints:
Larger Capital Investment Required to Establish Management Facilities, Characteristic Complexity and Uncertainty Involved and Risk Associated with Hi-tech R&D and Conflict of Interest Issues
Opportunities:
Emergence of R&D Outsourcing In The Emerging Countries, Virtual R&D and Emergence of Industry 4.0 and Widespread Adoption of AI Across Industries
A recent study by the Center for European Economic Research shows that "The cost savings that come from outsourcing R&D can easily be overshadowed by the added complexity to manage the process throughout the organization. The report, which used survey data from a wide range of German companies, concluded that outsourcing more than 15 percent to 30 percent of a firm’s innovation activities could make it difficult for management to maintain the effectiveness of the organization."
Key Target Audience
Government and Academic Institutes, R&D Departments and contract research organizations, Consulting Firms and Others
About Approach
To evaluate and validate the market size various sources including primary and secondary analysis is utilized. AMA Research follows regulatory standards such as NAICS/SIC/ICB/TRCB, to have a better understanding of the market. The market study is conducted on basis of more than 200 companies dealing in the market regional as well as global areas with the purpose to understand the companies positioning regarding the market value, volume, and their market share for regional as well as global.
Further to bring relevance specific to any niche market we set and apply a number of criteria like Geographic Footprints, Regional Segments of Revenue, Operational Centres, etc. The next step is to finalize a team (In-House + Data Agencies) who then starts collecting C & D level executives and profiles, Industry experts, Opinion leaders, etc., and work towards appointment generation.
The primary research is performed by taking the interviews of executives of various companies dealing in the market as well as using the survey reports, research institute, and latest research reports. Meanwhile, the analyst team keeps preparing a set of questionnaires, and after getting the appointee list; the target audience is then tapped and segregated with various mediums and channels that are feasible for making connections that including email communication, telephonic, skype, LinkedIn Group & InMail, Community Forums, Community Forums, open Survey, SurveyMonkey, etc.