I admit, I wasn’t familiar with the acronyms for engineering services outsourcing (ESO) and engineering service providers (ESPs) until I saw a press release forecasting the aerospace ESO market to grow at a compound annual growth rate (CAGR) of nearly 26% during the next five years. Grand View Research (GVR) analysts predict the ESO market value to reach $188.24 billion by 2025, up from $37.79 billion in 2018 – numbers worthy of attention.

The anticipated growth of engineering services as a standalone business shouldn’t have surprised me. Aerospace original equipment manufacturers (OEMs) are faced with meeting production demands for huge jetliner backlogs and simultaneously reigning in costs. Outsourcing engineering services allows OEMs to reduce expenses, improve overall quality of their products and services, and enhance their expertise across a range of competencies, the GVR report says.

The growing need for manufacturing services encompasses simulation, prototyping, additive manufacturing (AM) testing and build validation, virtual/augmented reality (VR/AR) integration, and asset tracking and management. GVR notes the trend is likely to remain strong.

Increasing demand for air travel in the Asia Pacific region is driving global need for maintenance, repair, and overhaul (MRO) services to keep up with the increasing number of commercial aircraft – and that, too, is good news for ESO/ESPs.

Aircraft technology diversification is increasingly segmenting the ESO/ESP market into design & engineering, manufacturing support, security & certification, and aftermarket services.

Manufacturing support forms a vital element of the industry, the report explains, providing digital manufacturing, component engineering, and tooling & fixture designing services to OEMs. (An example of the latter appears on page 28 of this issue.)

The burgeoning collection of data – from design, through manufacturing, updating digital twins, airframe & engine health monitoring, MRO, and ultimately, aircraft disposal – will require an equally wide variety of outsourced engineering specialists to analyze and distill meaning from all of the numbers.

Connectivity and digitization bring more risks, and cybersecurity certification services to ensure flight safety and protect intellectual property (IP) will be on the growing list of ESP offerings. It makes sense that aerospace manufacturers will seek outside help, since software engineering expertise will be required as much as traditional engineering skills and experience.

Turning to ESPs also lessens the burden on OEMs and tier suppliers of acquiring, developing, and retaining personnel with these skills, especially companies already facing skilled worker shortages and aging workforces.

As emphasis on aircraft electrification increases, OEMS are focusing on investments and partnerships in green technology – including hybrid-electric propulsion and autonomous vehicle control – areas not customarily the focus of commercial airplane and engine OEMs. Larger players may acquire ESPs outright or choose to partner with them.

Technology growth and diversity across engineering and maintenance disciplines can only help increase the number of people involved in aerospace manufacturing, design, and MRO; creating new job titles and career paths; developing new businesses, ultimately expanding the industry’s scope. So, welcome ESO and ESPs. – Eric