The global market for product engineering services (PES) is expected to grow from about USD 1.29 trillion in 2025 to about USD 1.80 trillion by 2030. M&M
That's almost a 40% rise in only five years. This is what it means: as industries change quickly, like the automotive, industrial manufacturing, and medical device industries, they need more than just basic design and manufacturing. They need full-spectrum engineering help, which includes embedded software, hardware design, integration, testing, and ongoing product lifecycle services.
This rise in demand is good news for businesses that make things like smart industrial machines, connected devices, or electric vehicle platforms. If you work at or run a product engineering company (or want to), you are working in one of the most exciting times in the industry.
The thing is, as demand goes up, the types of services and skills that PES providers need are changing. The companies that do well will be the ones that change with the times and even see where the industry is going next. In this blog, we'll talk about the most important trends that will affect the future in product engineering services.
Key Trends Shaping the Future of Product Engineering Services
Embedded Software + Hardware Integration - Growing Complexity, Growing Need
What used to be "just hardware design" or "just firmware development" is now becoming integrated systems. As things like the Internet of Things, industrial automation, medical devices, and electric vehicles get smarter, the line between hardware and software gets less clear.
Customers don't just want a PCB designed; they also want firmware, a real-time OS, security, connectivity, testing, and validation. They want systems that work reliably on all platforms and in all situations.
This change makes PES companies need more full-stack skills, such as mechanical design, electronics, embedded software, system integration, testing, validation, and compliance.
According to the PES market analysis, services like product development, modernization, integration, and support are becoming more and more important.
What this really means is that if you work for a product engineering company and still think in silos (like just mechanical or just software), you'll have a hard time. Clients want one partner to take care of all aspects of system development.
Digital Engineering - Simulation, Digital Twins, Virtual Prototyping
Building a physical prototype takes a lot of time and money. That's why digital twin modeling, virtual prototyping, and simulation are becoming more popular.
Engineers can use digital tools to model, simulate, and test complicated systems before they build them. This speeds up development and lowers costs, time, and risk. Digital engineering is becoming more and more important, especially in fields like automotive, industrial automation, and medical devices, where safety, reliability, and following the rules are not up for debate.
According to recent reports from the industry, this trend toward software-defined products and AI-native development is a big reason why PES is growing. Knowing how to use simulation frameworks, digital twin platforms, and virtual testing environments can set them apart.
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Rise of AI / ML / Data-Driven Development & Testing
AI and ML are more than just buzzwords. They're changing the way products are made, tested, and kept up. Engineering processes are getting smarter. They now include AI-assisted design suggestions, predictive testing, anomaly detection, and automated quality assurance. ML models can use data from test benches, usage logs, sensors, and telemetry to guess when something will break, improve performance, or help with design changes.
Because products are becoming more and more complicated, with embedded systems that have multiple sensors, edge computing, and connectivity, manual testing and validation might not be enough. Automation and AI are making things easier.
Industry reports say that AI-powered and cloud-native engineering will be in high demand in the future. That means your company needs to offer more than just "build and deliver." It's all about "build, watch, improve, and optimize."
Industry 4.0, IoT, and Connected Devices - Broadening the Scope of PES
More and more, manufacturing, automotive, healthcare, and consumer electronics are all connected. Smart factories, IoT devices, connected consumer products, and electric vehicles all need complicated hardware, software, connectivity, cloud support, and built-in intelligence.
As more and more companies adopt Industry 4.0, there is a huge need for PES companies that can provide not just a product, but an entire connected ecosystem that includes sensors, firmware, device management, communication protocols, data analytics, and edge/cloud integration.
That is like the vertical growth that global PES forecasts talk about. Some of the biggest demand generators are the automotive, electronics, medical devices, aerospace, and industrial manufacturing sectors.
This is a huge chance for you as a member of a product design company. You'll be ahead if you can show that you can deliver full-stack connected solutions, which include hardware, embedded software, and cloud/edge integration.
Shorter Time to Market - Pressure for Faster Delivery, Rapid Iteration Cycles
Product cycles are getting shorter as markets become more competitive. Customers want new features and updates, patches, and next-gen features more quickly.
This pressure makes PES providers use modular design, agile development, continuous integration/continuous deployment (CI/CD) pipelines, and scalable architectures.
Digital twins and automated testing are two examples of technologies that help speed up development cycles while keeping quality high. This lets companies get more features, more iterations, and faster to market.
That speed is what is driving a lot of the growth in PES demand. When clients need things done quickly and with a high level of reliability, it makes sense to hire skilled PES companies. This trend could change how you deliver your projects, from long, separate development phases to shorter, iterative sprints that meet the needs of your clients.
Geographic Advantage & Offshore Delivery - Asia Pacific Gains Prominence
Not all PES demand comes from nearby areas. More and more, global OEMs and businesses are hiring engineers from places with a lot of talent, low costs, and knowledge in their field
The Asia-Pacific region, which includes India, is becoming the fastest-growing area for PES. This is because it has a lot of skilled engineers in embedded systems, electronics, IoT, and software.
This is a strategic advantage for companies that are based in India or have a presence there. You can offer world-class engineering services at prices that are still competitive and meet global demand.
This trend shows how valuable offshore and nearshore delivery can be for a company like yours, especially when you want to reach customers in North America, Europe, or other areas with high costs.
What This Means for a Product Engineering Company - Realistic Scenarios
Let's get specific: how can a company like yours (with experience in embedded systems, board bring-up, GUI frameworks, and drone/AI-on-edge work) take advantage of this trend?
Offer end-to-end services:Don't just stop at hardware design or firmware; offer end to end services. Put together hardware, embedded software, system integration, QA, and support. This full-stack service is appealing to clients who are making drones, IoT devices, and industrial equipment.
Use digital-first workflows: Instead of just using physical prototypes, use simulation, virtual prototyping, digital-twin modeling, and automated testing. It cuts down on lead time and gives you more options.
Invest in AI/ML & data-driven testing and optimization: Put money into AI/ML and testing and optimization based on data: For instance, when making an embedded camera system, use AI to automate firmware validation, sensor calibration, and regression testing. Or use analytics to improve performance, find bugs early, and speed up iterations.
Aim for smart and intelligent products: Position the company as able to handle hardware, software, connectivity, and cloud/edge integration, whether it's drones with edge AI, IoT sensors, smart industrial gear, or modern consumer electronics.
Leverage cost + talent advantage if offshore: Take advantage of lower costs and skilled workers if you work from India or a similar area. Offer prices that are competitive, access to skilled engineers, and delivery models that work in western markets.
Structure for rapid delivery: Use agile methods, modular design, and incremental delivery to help clients get working prototypes quickly, make changes, and launch sooner.
In other words, accept complexity, offer flexibility, and plan for growth.
How Companies Are Doing This - Examples from the Industry
Look at companies all over the world: big ones are already breaking down the barriers between hardware and software. Some work with OEMs to make embedded software for electric cars. Some companies offer smart manufacturing, digital twin solutions, and platforms that combine hardware and software.
A company like yours could stand out closer to home. Think about offering embedded-systems board bring-up on platforms from partners like Toradex, helping with Android/Linux porting, GUI development with frameworks like Qt or LVGL, adding cameras or sensors, making IoT connections possible, dealing with compliance issues (like security or regulatory), and giving ongoing support. That's exactly the kind of end-to-end PES value that people are starting to buy.
When customers start asking for smart edge devices, connected products, smart GUIs, and integration with cloud and AI, that's when a product engineering company with embedded-system, software, and domain knowledge, as well as global ambitions, can really shine.
What to Watch Out For - Challenges and What They Imply
It's not always easy. Challenges come with complexity:
Managing teams that work on hardware, software, connectivity, and compliance projects becomes more difficult. Clear accountability, good project management, and good communication become very important.
To keep up with fast-changing technologies like AI/ML, IoT, digital twins, and security standards, you need to keep learning and investing.
When delivering goods overseas, it's more important to make sure that everything is in sync across time zones, regulations, data security, and IP protection.
As competition grows, customers will want more: faster delivery, better quality, better integration, and often lower prices.
Product Engineering Serivces companies need to be flexible, disciplined, open, and always getting better, or they risk falling behind.
Conclusion - The Future Favors Full-Stack, Smart, Delivered-Right
It's not about doing more in the future of product engineering services. It's about getting better at doing the right things
Hardware is no longer the only thing that makes up a product. They are systems. They are smart. They are linked. And they need to stay alive in the field for years, in a safe and reliable way.
This change is a direct benefit for Silicon Signals, as it plays to its strengths. These are not just technical skills: board bring-up, porting Linux and Android to embedded systems, camera and vision systems, GUI frameworks like Qt and LVGL, AI on the edge, and deep hardware–software integration. These are exactly what modern product companies are having a hard time finding all in one place.
The chance isn't just to finish projects. It's to become the engineering backbone for OEMs who are making the next generation of products. Things that need to work on the edge. Systems that need strict control over hardware and software. Platforms that need to be safe, able to be updated, and able to grow over time.
Silicon Signals is in a good position to go from being a service partner to a long-term technology partner for product companies that want to make systems that are ready for the field. This is especially true for things like AI-enabled platforms, smart cameras, connected devices, and industrial IoT.
Companies that combine deep technical knowledge, the ability to solve real-world problems, and discipline in execution will do well in the future of product engineering. That's not a general vision. Silicon Signals fits in naturally there.
And if it keeps getting better at system thinking, security-first design, and end-to-end ownership - from boards to software to field deployment - it won't just follow the future of product engineering services.
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