The future of the
TIC industry
Executive Summary: A customerfocused market survey of trends,
challenges and growth expectations
November 2022
2 The future of the TIC industry
Roland Berger conducted a customer-focused market study to survey trends, challenges
and opportunities in the TIC industry
About the study
For the first time, Roland Berger has conducted a customerfocused market study of the TIC-services market. Contrary to
existing surveys, the study only includes responses from
TIC-customers and excluded employees from TIC-companies.
Study responses have been collected in Q1 2022.
DESCRIPTIVE STATISTICS OF THE SURVEY PARTICIPANTS
Functional field
TIC purchase segment
1%
Study approach and methodology:
1) Preparing the survey:
Interviews and discussions with TIC market experts for setup of
survey questionnaire (segmentation, question items, etc.)
2) Conducting the survey:
Approach of RB contact network and further external agency
contacts with survey questionnaire to collect responses from
TIC customers
3) Interpreting the results:
Interviews and discussions with TIC market experts to find
interpretations and implications of the survey as well as to
validate findings
TIC purchase frequency
15%
32%
34%
14%
19%
17%
7%
12%
16%
28%
7%
12%
15%
43%
29%
Management
Automotive & Mobility
Several times a month
Operations
Building & Construction
Monthly
Quality and product management
Consumer Goods & Electronics
Quarterly
R&D
Food & Agriculture
Yearly
Others
Life Science & Healthcare
Less than once a year
Never
Source: Roland Berger
Roland Berger has extensive TIC-specific industry and project knowledge. We would welcome discussion of the implications of this study and look
forward to your perspective on ongoing challenges. Please don't hesitate to contact us and get in touch.
3 The future of the TIC industry
Management Summary
TIC market growth and trends
• In general, the global testing, inspection and certification
(TIC) market continues its historically positive growth
outlook, particularly in Asia Pacific and Europe. However,
expected growth rates are yet to keep up with inflation
rates.
• The historical market trend of TIC growth of ~3% above
GDP growth is expected to continue with slight differences
between the regions.
• Most European TIC players showed moderate revenue
growth rates up to 4% from 2016 to 2021; German
companies recorded healthy revenue growth but lower
profitability compared to international competitors.
• Eight key trends are set to impact the TIC industry:
- Supply-chain liability
- Penetration of digitalization
- Sustainability, ESG & climate change
- Technological progress
- Regulation
- Change in market structures
- Demographic changes
- Population growth
Survey results and areas for action
• This survey includes five major TIC market segments
(Automotive & mobility, Building & construction, Consumer
goods & electronics, Food & agriculture, Life science &
healthcare) and identifies the needs of TIC customers and
required actions in the light of future challenges.
• Growth expectations are mostly positive. However,
compared to other segments, the Automotive & mobility
and Consumer goods & electronics segments have
reduced growth outlooks.
• The key trends viewed by respondents as driving demand
were sustainability (10-26%), regulation (6-22%) and
technological progress (0-19%).
• The most relevant service offerings varied (e.g., vehicle
type approval in Automotive & mobility, food testing in
Food & agriculture) due to the heterogeneous nature of
TIC service segments.
• When choosing TIC providers, respondents tended to
focus on price, service quality and value-added services.
Reputation was not a decisive factor.
• Across all segments, regulation was the main driver for
demand growth, followed by sustainability. Outsourcing
and quality improvements were often secondary.
4 The future of the TIC industry
Growth in the TIC market: Global TIC revenues grew by ~3% above GDP growth
from 2016 to 2021 – Europe as second-largest market
The global TIC (quality assurance) industry is growing
strongly. Its market volume is forecasted to rise from
EUR 158 billion in 2020 to EUR 192 billion in 2024,
with growth rates of up to 12.5% in the same period.
Asia Pacific is the largest TIC market, with rapid
industrialization in the infrastructure, energy and
transport sectors (especially in China and India)
generating considerable opportunities for TIC services.
In Europe, the second-largest market, growth is driven
mainly by the surge in trade of counterfeit and pirated
goods, as well as a trend towards outsourcing services.
Growing demand for imported products is driving
testing/inspections in North America.
Overall growth predictions for the TIC market are in
line with past performance. An industry rule of thumb
is that TIC market growth is around 3% above GDP
growth. Recent data suggests that this overall trend
will continue in the next few years, especially in Asia
Pacific and Europe. The growth rate in North America
has historically been an outlier and less consistent.
Focus on Europe
Most European TIC players experienced growth of
0-4% between 2016 and 2021, recovering quickly from
the COVID-related dip in 2020. Eurofins, headquartered
in Luxembourg, stood out with extraordinary revenue
growth. This was driven by extensive M&A activity and
COVID testing. Its EBIT margin also soared, reaching
19% in 2021. While keeping up with most competitors
in terms of revenue growth, German players were less
profitable (see next page).
ROWING UP: THE ASIA-PACIFIC MARKET IS DRIVING GLOBAL TIC REVENUE GROWTH
Global TIC market volume by region, 2016-2024 [EUR bn]
CAGR
CAGR
2016-2020 2020-2024
7.6%
192
181
169
158
5.6%
145
137
126
115
3
2
17
3
2
5
2
4
2
4
2
20
19
4
2
143
4
2
6
2
5.1%
12.5%
1.7%
4.7%
North America
3.6%
5.5%
69
Europe
3.8%
6.1%
91
Asia Pacific
8.1%
9.2%
6
2
South America
MEA
24
23
22
21
19
65
18
62
58
54
56
54
50
47
53
47
2016
2017
58
2018
63
2019
64
2020
78
72
2021
2022
Source: Euromonitor; Markets and Markets; Mordor Intelligence; Roland Berger
85
2023
2024
5 The future of the TIC industry
While keeping up with most international TIC competitors in terms of revenue growth,
German players have been less profitable in the past
REVENUE GROWTH AND PROFITABILITY OF SELECTED EUROPEAN TIC PLAYERS
22%
20%
Intertek
18%
16%
Eurofins
14%
EBIT margin
2021
SGS
12%
DNV GL
10%
Bureau
Veritas
Ø 11%
8%
6%
TÜV Süd
TÜV
Rheinland
4%
Applus+
TÜV Nord
Dekra
2%
0%
0%
1%
2%
3%
4%
Revenue CAGR 2016-2021
Size of circled area represents relative revenue size in 2021
Source: Company information
5%
20%
21%
22%
6 The future of the TIC industry
Challenges and actions: Several trends/challenges are impacting TIC players –
We conducted a customer-focused market survey to find out how to address them
Despite the growth achieved in the past few years, TIC players face significant long-term challenges in addition to short-term profitability issues. Roland Berger has identified
eight mega trends that are already impacting or will impact the industry (see graphic below).
What TIC players need to do
To gain a better understanding of the challenges facing TIC providers, Roland Berger conducted a survey focusing on the five key demand-side TIC segments: Automotive &
mobility; Building & construction; Consumer goods & electronics; Food & agriculture; and Life science & healthcare. This helped to determine what customers want and what
TIC players need to do. Questions focused on four key areas: Growth expectations; Trends impacting growth; Most relevant service offerings (what type of TIC-services
customers demand); and most important purchasing criteria (what providers need to offer). Responses in each key area are summarized by industry segment over the
following pages, along with a summary of the outlook and key results/implications. Survey participants were B2B TIC service customers from a broad spectrum of industries
(for example, retail, automotive, consumer goods). They ranged from small players with revenues of less than EUR 500 million to global players with revenues above
EUR 10 billion. Most purchased TIC services either quarterly or yearly.
KEY MEGA TRENDS
TIC players need to prepare for the challenges of digitalization, sustainability and market changes
1
Supply-chain
liability
2
Penetration of
digitalization1
3
Sustainability, ESG
& climate change1
• Increasing complexity
through fully
interconnected supply
chains
• Increasing relevance
of B2C and B2B
digitalization (e.g.,
IOT, data analytics)
• Need for significant
greenhouse-gas
reductions (CO2,
methane, etc.)
• Necessity of supplychain control and
compliance foster
de-globalization
• Rising threat of
cyberattacks
• Decarbonization
of entire business
models
• Continued
digitalization of TIC
processes
4
•E
volution of new
and more advanced
products and services
that require TIC
services
•S
hortening of
technological lifecycles between
innovations
Rather short-term
1 Trends interlinked and potentially dependent on respective local, national and international regulation
Source: Roland Berger
Technological
progress1
5
Regulation
• Increasing regulatory
requirements
regarding a product's
or service's quality,
sustainability or
safety
TIMING OF TRENDS
6
Change in market
structures
• Ongoing market
consolidation within
the entire TIC industry
7
Demographic
changes
• Increasing global
urbanization
• Emerging economies
• Trend towards
with large youth
privatization of TIC
population and
rather than ownership/ booming birth rates
contracting by public
• Aging population in
authorities
industrialized
countries
8
Population
growth
• Increasing global
population
• Significant overpopulation of Asian
and African countries
• Emerging middle
class, especially in
emerging markets
Rather long-term
7 The future of the TIC industry
Survey summary: Most market segments have a positive outlook for growth in TIC service
demand, however noticeable differences between market segments
EXECUTIVE OVERVIEW OF RESULTS BY TIC MARKET SEGMENT
Outlook
AUTOMOTIVE &
MOBILITY
BUILDING &
CONSTRUCTION
CONSUMER GOODS &
ELECTRONICS
FOOD &
AGRICULTURE
LIFE SCIENCE &
HEALTHCARE
• Neutral growth outlook: Only
46% of respondents expect
increasing demand for TIC
services
• Very positive growth outlook
(84%) for TIC service demand
•R
educed growth outlook:
Only 35% of respondentsexpect
increasing demand for
TIC services
•P
ositive outlook: 63% of
respondents expect overall
increase in demand for TIC
services
• Very positive outlook for overall
service segment (83%)
• Quality improvements are main
driver for demand growth
• Food regulations expected to
be main growth drivers for TIC
service demand
•M
ost relevant services require
digital and technological
capabilities from TIC service
provider:
• " Food testing and certification"
as well as "Food microbiology
testing" most relevant TIC
services
• Quality improvements as growth
driver – regulation and
outsourcing less important
Key
results
• Regulation seen as clear driver
for growth: new trends (e.g.,
sustainability) are pushed through
regulation into the market
• „Vehicle type approval“ and
„statutory vehicle inspection“
continue to be most demanded
TIC services”
• "Materials testing and
certification" as well as general
"Fire testing" services most
relevant TIC offerings
• Emergence of new technologies
(especially e-mobility) has direct
impact on relevant services and
leads to overall reduced growth
expectation
• Further growth driven especially
by regulatory and sustainability
trends: Industry demand driven
by regulatory specifications
concerning sustainability and
safety requirements
Source: Roland Berger
– "Connectivity and electronic
device testing"
– "Microelectronics quality
control"
• Food-related TIC service growth
driven mostly by growing
population and sustainability
mega trends
• Heavily regulated industry:
Regulation is expected to continue
to be maindriver for TIC service
demand
• TIC services for medical
devices gaining relevance:
"Biocompatibility" and
"Materials testing for medical
devices" top two most
relevant TIC services
• Growth driven mostly by
regulation, as well as
technological progress
8 The future of the TIC industry
Automotive & mobility industry: Neutral overall growth expectations, largely due to the
lower testing requirements of new technologies
NOTABLE/OTHER RESULTS
Purchasing criteria: Reputation is not decisive when purchasing B2B TIC services.
However, reputation may be relevant for B2C and marketing efforts that have not
been surveyed. Clear B2B focus on service quality, value-added services and pricing
Drivers: Quality improvements the main driver for utilizing more quality assurance
services (59% of respondents). Regulation (23%) less important – new engine types
will need fewer type approvals and inspections
How do you assess the overall growth perspective for quality assurance services
within the next three years?
DECLINE
Which overall market trends do you expect to most positively impact growth of quality
assurance service demand?
GROWTH
50%
1. Penetration of digitalization
21%
2. Sustainability & climate change
46%
19%
3. Technological progress
16%
15%
4. Change in market structures
10%
5. Supply chain liability
4%
Decline
Constant
6. Population growth
9%
7. Regulation
9%
1%
8. Demographic changes
Growth
In your view, what will be the five most relevant quality assurance service offerings
for your company?
In your view, what are the most important purchase criteria forquality assurance
services?
IMPORTANCE
1. Vehicle type approval
46%
2. Statutory vehicle inspection
23%
3. Aerospace testing, certification
and inspection services
15%
Price
Speed
Reputation
4. Performance claim & support
8%
Service quality
5. Road & rail services
8%
Value added/supporting services
0%
Source: Roland Berger
25%
50%
75%
100%
9 The future of the TIC industry
Building & construction: A very positive overall growth outlook driven by rising regulation,
especially around sustainability requirements
NOTABLE/OTHER RESULTS
Purchasing criteria: Quality and price are key criteria. Reputation not decisive, due
to focus on B2B services. Value-added services a major growth area
Drivers: All respondents see regulation as main driver – new construction/
renovation projects highly influenced by regulations. Other relevant trends,
especially sustainability measures, pushed through regulatory requirements
How do you assess the overall growth perspective for quality assurance services
within the next three years?
DECLINE
Which overall market trends do you expect to most positively impact growth of quality
assurance service demand?
GROWTH
26%
1. Sustainability & climate change
84%
22%
2. Regulation
12%
3. Population growth
16%
10%
5. Supply chain liability
10%
6. Technological progress
10%
6%
7. Change in market structures
0%
Decline
4. Demographic changes
Constant
4%
8. Penetration of digitalization
Growth
In your view, what will be the five most relevant quality assurance service offerings
for your company?
In your view, what are the most important purchase criteria forquality assurance
services?
IMPORTANCE
1. Materials testing
21%
Price
2. Materials certification
16%
Speed
3. Fire testing
16%
Reputation
11%
4. Plant safety & integrity services
5. Analysis of impurities & contaminants
5%
Service quality
Value added/supporting services
0%
Source: Roland Berger
25%
50%
75%
100%
10 The future of the TIC industry
Consumer goods & electronics: Reduced overall growth expectation, with almost two thirds
of respondents predicting stagnation
NOTABLE/OTHER RESULTS
Service offerings: Electronics and digitalization services most relevant as clear
connection to technological trends within the segment. Few growth impulses from
regulation as most regulations already implemented
Drivers: Almost half (45%) of respondents name quality improvements as main
growth driver, outsourcing and regulation both at 28%. Segment has heterogeneous
TIC needs
How do you assess the overall growth perspective for quality assurance services
within the next three years?
DECLINE
Which overall market trends do you expect to most positively impact growth of quality
assurance service demand?
GROWTH
1. Penetration of digitalization
63%
20%
2. Sustainability & climate change
18%
3. Technological progress
13%
11%
4. Supply chain liability
35%
11%
5. Change in market structures
3%
Decline
Constant
6. Population growth
10%
7. Regulation
10%
7%
8. Demographic changes
Growth
In your view, what will be the five most relevant quality assurance service offerings
for your company?
In your view, what are the most important purchase criteria forquality assurance
services?
IMPORTANCE
1. Connectivity testing (Internet, Bluetooth,
mobile, etc.)
38%
2. Electronic device testing
24%
19%
3. Microelectronics quality control
Price
Speed
Reputation
4. Chemical testing
10%
Service quality
5. Product Conformity Assessment (PCA)
10%
Value added/supporting services
0%
Source: Roland Berger
25%
50%
75%
100%
11 The future of the TIC industry
Food & agriculture: Tighter regulation and rising interest in sustainability as well as meat
alternatives leads to increased growth expectations
NOTABLE/OTHER RESULTS
Positive trends: Population growth the key trend, especially in Asian markets.
Demographic changes impact population growth in all markets, including those
in the West. Trend towards sustainable food also important
Drivers: Regulation the main driver with 63% of regulation the main driver with
63% of respondents considering it relevant – quality improvements only secondary
(38%). Regulation impacts segment through taxation (e.g., sugar taxes) and
sustainability targets
How do you assess the overall growth perspective for quality assurance services
within the next three years?
DECLINE
Which overall market trends do you expect to most positively impact growth of quality
assurance service demand?
GROWTH
1. Population growth
63%
26%
2. Sustainability & climate change
23%
3. Supply chain liability
37%
14%
4. Change in market structures
11%
5. Demographic changes
11%
6. Penetration of digitalization
9%
7. Regulation
0%
Decline
Constant
6%
0%
8. Technological progress
Growth
In your view, what will be the five most relevant quality assurance service offerings
for your company?
In your view, what are the most important purchase criteria forquality assurance
services?
IMPORTANCE
1. Food testing and certification
75%
2. Food microbiology testing
25%
Price
Speed
3. Crop & forest services
0%
Reputation
4. Crop monitoring & agronomic services
0%
Service quality
5. Food contaminant testing
0%
Value added/supporting services
0%
Source: Roland Berger
25%
50%
75%
100%
12 The future of the TIC industry
Life science & healthcare: A positive outlook as regulation and technological developments
continue to drive growth – COVID has pushed awareness for medical TIC services
NOTABLE/OTHER RESULTS
Positive trends: While regulation top due to "safety first" nature of segment,
technological progress and change in market structures also key trends due to
digitalization and evolution of services. Rising complexity of medtech products,
in particular, will increase technological requirements for offered TIC services
Drivers: A majority of respondents see regulation as the main driver for utilizing
more TIC services, with 44% naming quality improvements
How do you assess the overall growth perspective for quality assurance services
within the next three years?
DECLINE
Which overall market trends do you expect to most positively impact growth of quality
assurance service demand?
GROWTH
22%
1. Regulation
83%
2. Technological progress
19%
3. Change in market structures
17%
0%
Decline
Constant
12%
4. Supply chain liability
10%
5. Sustainability & climate change
10%
6. Population growth
10%
7. Penetration of digitalization
10%
8. Demographic changes
Growth
In your view, what will be the five most relevant quality assurance service offerings
for your company?
7%
In your view, what are the most important purchase criteria forquality assurance
services?
IMPORTANCE
1. Biocompatibility testing for medical devices
16%
Price
2. Materials testing for medical devices
16%
Speed
3. Clinical trial management (Phase I-IV)
11%
Reputation
4. Early phase clinical research services
11%
Service quality
5. Electrical & electro medical device testing
11%
Value added/supporting services
0%
Source: Roland Berger
25%
50%
75%
100%
PUBLISHER
Authors
Benedikt Rickmers
Senior Partner
+49 160 744-8006
benedikt.rickmers@rolandberger.com
Markus Strietzel
Senior Partner
+49 160 744-2244
markus.strietzel@rolandberger.com
Niko Herborg
Partner
+49 160 744-6131
niko.herborg@rolandberger.com
Tobias Hanspach
Senior Project Manager
+49 160 744-6159
tobias.hanspach@rolandberger.com
ROLAND BERGER GMBH
Sederanger 1
80538 Munich
Germany
+49 89 9230-0
www.rolandberger.com
Roland Berger has extensive TIC-specific knowledge and we would welcome discussion
of the implications of this study. Please don't hesitate to contact us.
Cover iZonda/Getty Images
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