Naval engineering includes the conception, designing and construction of ships, offshore structures, and other marine vehicles. A few top cities for outsourcing of naval engineering are:

Hi-Tech/Telecom is one of the sectors leading the growth of spending, and is driven by the high pace of new product introduction and the global nature of their products. Hi-Tech or electrical engineering is the application of the laws of physics governing electricity, magnetism and light to develop new technologies. These technologies are then used to create computer technology and software, neon lights, cordless telephones and refrigerators. Electrical engineering includes the following different areas or specialty: Communications, Computer, Electrical, Electromechanical Systems, Electronic Systems and Software. The top cities for hi-tech are:

A few of the top outsourcing locations for telecom are:

Utilities, or mechanical engineering as it is commonly known, are concerned with the design, construction and operation of power plants, engines and machines. This can be divided into heat utilization and machine design. Heat utilization is the generation, distribution, and use of heat. It is applied in boilers, heat engines, air conditioning, and refrigeration. Machine design is concerned with hardware, including that which makes use of heat processes. The utilities sector is largely private, while a little less than 50% of construction/industrial machinery is private with the rest being government sponsored. Some of the top cities for utilities engineering are:

Industrial/construction engineering encompasses the planning and management of the construction of structures like highways, bridges, airports, railroads, buildings, dams and reservoirs. It also involves the design of structures, temporary cost estimation, planning and scheduling, procuring materials, selecting equipment and cost control. A few of the top cities for industrial and construction engineering outsourcing are:

As the demand for engineering talent grows, emerging market countries such as India and China will play an important role in the expansion. Aside from the cost-cutting factor, the primary focus of companies is to gain a competitive advantage in the marketplace.

However, other nations piloted by China present a viable threat to the growth of engineering services in India. A recent survey of the attractiveness of offshoring locations found that 46% of companies identified China as a future resource, compared to 26% for India, 13% for Latin America and nine percent for Eastern Europe.

Within the developing world, a number of countries are likely to take part in the growth of engineering-process outsourcing. Countries that can provide low-end services are likely to include small countries like Nigeria and Vietnam that are new to the BPO market. When it comes to high-end, complicated tasks, however, the most likely scenario is that India and China will take home the most contracts. There are very few countries that can pose a threat, as they lack the scalability given their lack of scale relative to that of India and China. Certain cities in Thailand such as Bangkok and Rayong have developed a strong cluster of automotive players, and are in a good position to obtain future automotive engineering outsourcing. Israel has the required skill sets but is severely lacking in terms of scale.

Other growing countries that could become possible competition for India and China in the future include the Czech Republic and other countries of Eastern Europe, and Russia, because they have the required skill sets especially for product design and R&D. However, it will take some time before other countries can become serious competition for India and China due to lack of scalability. China is likely to be a formidable competitor for India. India has the advantage in terms of English-language skills, cultural compatibility with the West, a robust political and legal system, and relatively strong protection of intellectual property, while China has a much stronger infrastructure and a well-developed manufacturing base.

Until the recent past, engineering services offshoring was combined with either IT services or BPO services. However, the increased demand and disintegration of “core” activities being ready for outsourcing translates that this segment needs special treatment. The current $750 billion industry is set to become a $1,100 billion industry by 2020. As with any market, the engineering-services outsourcing market is going to become more and more difficult to break into over time, especially as cost is not likely to be the most important factor in sourcing a project design. That is good news for the countries that capture the market early and keep it, but not so for those that wait for the market to mature. Some countries, like India for instance, are under a lot of pressure to enter and retain the engineering-services outsourcing market. If they are not able to enter the market early and keep it, they will lose their relationships in the ITO and BPO sectors as well. Companies will only see India as an intermediate cost-saving measure, and will therefore look for other cheaper alternatives. While cost control remains a primary concern, companies are also looking for access to a high-quality talent pool that can grow engineering capacity and increase productivity. Locating engineering services in emerging markets also provides access to a growing market of customers, and can decrease time to market. Offshoring of engineering services is different from BPO. The emerging markets that can put infrastructure, skilled labor and a positive environment into place will be able to grow and obtain the largest market share.