This IDC study forecasts fairly robust growth for the R&D/product engineering services market in the long term as technology product customers look to outsource their product development and innovation work to outsourcing vendors. IDC forecasts a slowdown in 2009 but expects customers to improve their outsourcing from the 2010 time frame as the economy revives, and IDC expects spending for these services to reach an estimated $65.7 billion by 2013.

"As technology product customers grapple with shrinking product life cycles, reduced product sales, and engineering talent acquisition challenges, the value proposition tied to R&D/product engineering services will continue to find favor with customers," says Mukesh Dialani, senior analyst with IDC's Global Sourcing Strategies. "Vendors would do well to continue improving their own infrastructure around these services by investing in the buying and creating of intellectual property (IP), hiring relevant talent, and setting up proof-of-concept centers and labs, which will lead to the increased adoption of these services by technology product customers."