The past decade has ushered in a new age of engineering and construction technologies. The rise in adopting those technologies is becoming increasingly evident. Recent market research indicates that the global engineering software market was at $32.6 billion in 2022 and will reach $50.2 billion by 2026, a compound annual growth rate (CAGR) of 9.7 percent.
From the Internet of Things (IoT) to digital twins and the cloud, software and engineering have become intertwined. While the construction industry has been slower to implement new technologies, the mass number of innovations has provided the stepping stone for faster adoption.
According to the report, AEC (architecture, engineering and construction) software alone is expected to reach $10.7 billion by 2026. Leading this growth will be the United States, Canada, Japan, China and Europe, which currently have a combined market size of $5.3 billion.
Construction companies have been moving swiftly to incorporate engineering software for a number of reasons. While there are numerous software options available, many offer real-time communication for enhanced collaboration, document and project management and enhanced budgeting. As engineering software has evolved, its makers have focused on creating software that is easy to integrate.
COVID-19 likely played a role in boosting the engineering software market. With supply chain issues, stay-at-home orders and strict protocols, companies across the board were forced to rethink how production or construction was done. That mindset change may have provided the tipping point for many companies to adopt new technologies.
Interestingly, Germany is forecast to grow at 8.7 percent CAGR for CAD and CAM. The rise of the cloud has made new engineering feats possible for this segment. A move toward software as a service (SaaS) offers new alternatives for enhancing designs while gaining storage freedom. The move away from the traditional software model eliminates excess time spent installing and configuring software and is often a more cost-effective option. Innovations in CAD software have transformed it from being a tool to an essential element of workflow.
Electronic design automation (EDA) is projected to have a seven-year 9.8 percent CAGR. The report suggests that this segment will see significant growth as new innovations unfold. Simulation, design and verification are the three main EDA tools. The latest trending EDA technologies include 5G, IoT, artificial intelligence (AI) and machine learning. The latter two are having a massive effect on engineers. Along with taking over some tasks, these technologies have provided a way to achieve new and better things.
Lastly, this report indicates that the Asia-Pacific region—Australia, India and South Korea—is slowly becoming a force to be reckoned with. The region has seen a rapid ascent toward industrialization and enhanced IT infrastructure that is turning its engineering software market into one that is forecast to reach $1.1 billion by 2026.