Product Design and Development Services Market Size, Share & Trends Analysis Report By Product (Research, Strategy, and Concept Generation, Concept and Requirements Development, Detailed Design and Process Development, Design Verification and Validation, Process Validation and Manufacturing Transfer, Production and Commercial Support), By Applications (Diagnostic Equipment, Therapeutic Equipment, Clinical Laboratory Equipment, Surgical Instruments, Biological Storage, Consumables, Others), By End-User (Medical Device Companies, Pharmaceutical Companies, Biotechnology Companies, Contract Research Organizations) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global product design and development services market size was valued at USD 11,087.88 billion in 2022. It is estimated to reach USD 26793.42 billion by 2031, growing at a CAGR of 10.3% during the forecast period (2023–2031). Product design and development services and precise component positioning are anticipated to promote market expansion.

Making a device for a certain purpose or collection of duties, then continuously reevaluating and enhancing it until the item becomes obsolete, is how a medical device is designed and developed. Idea generation and concept formulation are the first steps in the process. They are subsequently developed, engineered, and prototyped if deemed practical and therapeutically useful. Bench testing, carried out using simulated product use and animal testing, is done next, along with any necessary redesigning work. The intended medical device and the manufacturing process are continually scrutinised for flaws that might jeopardise its safety, profitability, usability, customer happiness, regulatory acceptability, or market viability. Any flaws in the apparatus or procedure are fixed, and the final design is improved. The design also incorporates the numerous cutting-edge features of modern medical equipment, such as wireless communication, cybersecurity, and interoperability.

Human test subjects are utilized in clinical testing to confirm the product's efficacy and further check for flaws. Production and commercialization can begin when the U.S. FDA has validated and authorized the designing and manufacturing procedures. Design and development include identifying and documenting each step of development, the necessary actions for review, validation, verification, and design transfer at each level, and the division of authorities that apply.

Market Dynamics

Global product design and development services market drivers

Increasing complexity in product design and engineering

Producing safe and high-quality medical equipment is a top priority for medical device makers. Additionally, medical device rules are extensive and complex, expanding quickly. When the entire manufacturing process is effectively handled, medical devices that are both functional and effective are created. A novel medical device's design is challenging since many factors exist, such as the product's usefulness, viability, and design for production and assembly. Sterilisation, biocompatibility, and FDA requirements are additional concerns. Various causes, including greater regulatory control, new types of materials, shorter time to market, and rising risks of product failure, fuel the need for product design and development services. Technical, clinical, and regulatory difficulties are also prevalent in successfully developing combination products.

Understanding the regulatory requirements of the various medical components used in producing these devices is a hurdle that businesses frequently confront when manufacturing a combination of medical devices, biologics, and medicines. Among the hurdles are finding the centre that governs the combination product, understanding the necessity for human factor studies and how to execute them, and gathering the information required to support marketing permission for combination goods. Product design and development services are therefore required and are anticipated to promote market expansion.

Increasing trend of smaller and portable products

Medical equipment is becoming smaller and more portable, requiring more parts, sophisticated manufacturing processes, and automated systems. The size of medical items decreases while the features and performance increase. These products include life-help devices, medication delivery systems, treatment devices, and patient monitoring. Wearable and implanted devices that track, administer, treat, and monitor patient states are becoming increasingly prevalent needs for sophisticated and big tools that, until recently, would normally only be used by a technician or doctor. Designers seek affordable prices, straightforward user interfaces, robust designs, long-lasting rechargeable batteries, and low-power components for these wearable, portable, and implantable goods.

Additionally, these new items increasingly include design elements often seen in consumer-type products, such as portability, user interface, wireless connection, ruggedness, and industrial design, with patients as their intended users. Additionally, the production specifications for these new product designs are starting to resemble those for consumer goods, including advanced testing methods, high-volume automated assembly, and precise component positioning. These factors help in driving the market.

Global product design and development services market restraint

Lack of funding

The absence of funding for companies that make medical items has been one of the most worrying effects of the recent financial boom. Lack of funding and other support suggests that fresh ideas and creative research may be prevented at a stage of innovation between fundamental RandD and innovation. Innovators face substantial risk, and the possible payoff is unknowable. Private sector investors are hesitant to make investments at this time and typically decide to support more established businesses nearing commercialization. This transitory stage's name is the "valley of death," where many promising notions and laboratory discoveries expire before commercialisation. It is typically required for charity organizations or the government to offer financial assistance to assure the safe passage of creative ideas through the "valley of death."

Health experts routinely develop ideas for bettering medical equipment. However, their biggest challenge is successfully getting novel concepts to the design, testing, and production stages. The absence of adequate local research infrastructure and the inability to generate innovative ideas are the primary causes of this barrier in low-resource environments. The main cause of this is a shortage of resources. Even if local inventions may be the most effective at meeting local needs, there are few channels for turning an inventive concept into a commercial product. Thus, this can prevent the market from growing.

Global product design and development services market opportunities

Technology upgradation

IoT integration enables the development of intelligent, interconnected goods. Devices can gather and transfer data thanks to IoT, which enables product designers to create creative solutions. With this technology, companies that provide product design and development services may make IoT-enabled goods, including wearables, smart homes, and industrial IoT solutions. The development of new products is also made possible by advances in material science. Materials with enhanced mechanical capabilities, lightweight features, sustainability credentials, or distinctive functions can spark innovation.

Investigating and utilizing these cutting-edge materials can result in competitive benefits for product designs. These potential for technological upgrades in the global product design and development services market provide businesses with new chances to innovate, stand out from the competition, and provide consumers with value. Organizations may maintain competitiveness in a changing market by adopting these innovations.

Regional Analysis

Based on region, the Global Product Design and Development Services Market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

Asia-pacific dominates the global market

Asia-Pacific is the most significant Global Product Design and Development Services Market shareholder and is expected to exhibit a CAGR of 10.7% over the forecast period. Stronger regulatory frameworks, considerable cost reductions, more complex product designs, and increased medical device companies are predicted to propel the industry. The sector is also anticipated to expand due to the region's more affordable access to skilled personnel than the United States. Economic growth and the expanding unmet medical needs of huge populations in China and Japan are expected to support market expansion. Low manufacturing prices and the availability of inexpensive labour are responsible for how simple it is for international businesses to conduct business in the Asia-Pacific. These important elements are anticipated to drive the market in this area.

In addition, this region's healthcare costs will rise much more since urbanisation, rising life expectancy and unhealthy lifestyle choices are anticipated to increase the prevalence of noncommunicable illnesses in this area considerably. This is increasing the need for cutting-edge technology to diagnose, cure, and prevent illnesses, which is projected to drive the market.

North America is anticipated to exhibit a CAGR of 9.5% over the forecast period. North America is among the largest contributors to the worldwide product design and development services market. One of the major drivers of its market is anticipated to be the rapid expansion of medical device production to suit the region's rising need for effective healthcare. During the projected period, affordable medical device equipment development is also anticipated to have a favourable effect on the market. The frequency of cardiovascular disorders is anticipated to increase, driving up demand for medical equipment. According to a 2019 CDC report, around 647,000 Americans pass away from cardiovascular disorders each year. To address the expanding client demands, several businesses are involved in the production of medical devices by validation criteria.

Europe has emerged as one of the fastest-growing regions in the global market. Europe's product design and development services market held the third-largest share in 2019. With cutting-edge technology and established infrastructure, Europe is one of the top areas, leading to better healthcare facilities and patient care. Players attempting to enter the European market must be well-versed in various EU member states' regulatory practices and services. Without a regulatory affairs division, small and midsize medical device businesses frequently employ a regulatory consultant or a legal representative to help them through the different regulatory clearance stages required for selling their goods in Europe. Over the next several years, the EU's regulatory environment is anticipated to undergo significant changes that might impact market access or the range of entry. As a result of strict regulatory rules, the market is anticipated to develop profitably.

Additionally, the introduction of the new EU MDR, which took effect in May 2017, has made it necessary for manufacturers to keep track of the effectiveness, reliability, and performance of medical devices. The market is expected to grow throughout the projected period because of this.

In Latin America, the market is anticipated to expand profitably over the projection period. The market is anticipated to be driven by an increase in the elderly population and the incidence of chronic illnesses due to changing lifestyles. Mobility issues affect a substantial portion of the older population, which is expected to result in a high need for medical products. In Latin America, medical gadgets are widely used. Internet and smartphone use in the area is comparable to Europe and North America. Modern technologies are expected to quickly ingratiate themselves into daily life and encourage simplicity and ease. In the healthcare industry, where chronic illness incidence and the ageing population are rising, there is an increasing need for innovative technology to treat patients. This is anticipated to raise demand for product design and development services to support the creation of new goods.

The Middle East and African markets have grown significantly due to the patterns of morbidity, mortality, and disability in the Middle East and Africa due to demographic and epidemiological shifts. The frequency of chronic illnesses and injuries-related impairments is rising, which is expected to boost market expansion in the area over the next years. In the MEA in 2017, noncommunicable illnesses were responsible for 74% of all fatalities. The four most prevalent NCDs are diabetes, chronic respiratory illnesses, malignancies, and CVDs. The market is projected to develop due to the increasing requirement to control the region's disease burden.

Segmental Analysis

The global product design and development services market is bifurcated into product, form, application, and end-user.

Based on the service type, the global product design and development services market is bifurcated into research, strategy, concept generation, concept and requirements development, detailed design and process development, design verification and validation, process validation and manufacturing transfer, and production and commercial support.

The research, strategy, and concept generation segment dominates the global market and is predicted to exhibit a CAGR of 10.5% during the forecast period. It involves fostering creativity and developing an inspirational and workable product concept. Identification of risk, opportunity, user demands, the intended application of the product, contextual research/inquiry, competitive and comparative landscape study, legal or commercial requirements, and technology research and evaluation are all part of this process. Concept generation is the ideation stage when ideas are found or created. It is the stage of the design process that is most important. An idea may be characterized as a brief explanation of the operating principles, the general shape of the product and technology, and how the product will meet customers' demands. It is a process that begins with the demands of the client and the goal requirements, producing a variety of options for developing the product idea and completing the design.

Due to the significant research expected to be done at this stage, including user requirements identification, comparative and competitive landscape study, and technological research and evaluation, it is also projected to lead the market. Due to the significant expenditure needed for research, it became the sector with the highest income generation.

Based on application, the global market is bifurcated into the standard supplement, sports nutrition, and disease-based segments. 

The surgical instrument segment owns the highest product design and development services market share and is projected to exhibit a CAGR of 10% over the forecast period. These comprise all the tools required to carry out different forms of surgery, including bariatric surgery, bone and soft tissue surgery, cardiovascular surgery, gynecology, microsurgery, neurosurgery, ophthalmology, urology, and more. The number of operations performed each year has increased due to the development of minimally invasive and noninvasive procedures. According to data from the Centers for Disease Control, about 6 million laparoscopic operations are carried out annually in the U.S. and Europe. According to the American Society of Plastic Surgeons' figures, over 17.7 million minimally invasive and non-invasive cosmetic treatments were carried out in the United States in 2018. Modern manufacturing methods make it possible to develop surgical equipment that is both affordable and of high quality.

Engineering techniques and concepts are combined with biomedical technology to reduce the unbridged gap between engineering and surgery to design and develop surgical equipment. It uses engineering problem-solving techniques and technological design methodologies to enhance surgical procedures. Additionally, the choice of material is a very important factor in the design of certain surgical equipment. It is crucial to consider this information because the device will come into touch with the human body's skin, blood, tissues, and bones. The material must be long-lasting, non-toxic, and anti-corrosive to prevent surgical and biomedical tools from corroding owing to blood contamination and sterilization. Therefore, all the variables are expected to support market expansion.

Based on end-users, the global product design and development services market is divided into medical device companies, pharmaceutical companies, biotechnology companies, and contract research organizations. 

The medical devices segment is the most significant contributor to the market and is expected to exhibit a CAGR of 10.8% over the forecast period. In 2019, the segment of medical device businesses held the greatest share, accounting for around 51.8% of the overall market share. This is due to the rising need for cutting-edge medical goods to prolong patient lives. Companies that provide device designing and regulatory services are essential to the medical device supply chain. The use of cutting-edge technology is crucial for developing and sustaining product competency. Medical device companies are setting the pace for innovation by incorporating cutting-edge technology, including downsizing, portability, and improved dependability and communication. The forecast for design services is generally positive.

New medical device development heavily relies on large and small companies. Small medical device companies mostly develop new medical innovations, and often, their work is exclusively focused on therapeutic areas. However, one of the major medical device corporations frequently buys up upstart businesses that develop promising new items. Acquisitions provide big businesses with another method to perform R&D that may supplement or replace their efforts. Large medical device corporations conduct most of the industry's research and development, even though small businesses are crucial to the early discovery and development of new technology. The market is thus expected to be driven by innovation and a rise in RandD activity.

Recent Developments

• January 2023- ClariMed, Inc. launched the first MedTech services partner to integrate human-centric medical product development. Today, the Company acquired San Jose-based UserWise, LLC, and appointed Kelley Kendle as CEO and Chair of the Board. NaviMed Capital, a healthcare-focused private investment business, helped build the Company.

• December 2022- Mistral Solutions, a semiconductor, embedded electronics, Defence, and Product Engineering leader, was acquired by Axiscades Technologies, a technology and engineering solutions firm. With this purchase, Axiscades reinforces its position as a technological leader, offering cutting-edge product design and development services for various applications. At Rs 296 crore, the 2017 transaction was completed in four parts.