PUBLISHER: The Business Research Company | PRODUCT CODE: 1769995
PUBLISHER: The Business Research Company | PRODUCT CODE: 1769995
Innovation as a Service (IaaS) is a managed service model that offers organizations on-demand access to innovation capabilities such as idea generation, research and development, prototyping, and digital transformation-without requiring internal infrastructure or dedicated teams. Its primary goal is to speed up innovation, minimize risk, and foster business growth by utilizing external expertise, tools, and methodologies.
The main categories of innovation as a service include software and services. Software in the IaaS market refers to digital platforms and tools that help organizations manage and optimize their innovation workflows. Deployment options include both cloud-based and on-premise models. Organization size is divided into small and medium-sized enterprises (SMEs) and large enterprises. This service supports various applications such as product development, business model innovation, workforce development, and operational excellence. It is used across a range of industries, including information technology and telecom, healthcare, banking, financial services and insurance (BFSI), government, manufacturing, and others.
The innovation as a service market research report is one of a series of new reports from The Business Research Company that provides innovation as a service market statistics, including innovation as a service industry global market size, regional shares, competitors with a innovation as a service market share, detailed innovation as a service market segments, market trends and opportunities, and any further data you may need to thrive in the innovation as a service industry. This innovation as a service market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.
The innovation as a service market size has grown exponentially in recent years. It will grow from $3.78 billion in 2024 to $4.55 billion in 2025 at a compound annual growth rate (CAGR) of 20.2%. The growth observed during the historical period can be attributed to the emergence of personalized service delivery models, the expansion of cloud computing, the rise of subscription-based service models, increased investment in digital infrastructure, and supportive government incentives.
The innovation as a service market size is expected to see rapid growth in the next few years. It will grow to $9.39 billion in 2029 at a compound annual growth rate (CAGR) of 19.9%. Growth projected for the forecast period can be linked to the rising demand for rapid product development, an increasing push for digital transformation, heightened industry competition, the cost-effectiveness of outsourcing innovation, and a growing emphasis on sustainability and green innovation. Key trends expected in the forecast period include the adoption of digital twin technology, cloud-enabled ideation platforms, low-code prototyping tools, data-driven decision-making support, virtual innovation laboratories, collaborative innovation ecosystems, and the use of generative artificial intelligence (AI) for concept generation.
The increasing demand for digital transformation is projected to drive the growth of the innovation as a service market in the coming years. Digital transformation involves using digital technologies to significantly improve business operations, internal processes, and the delivery of customer value. The rising need for digital transformation is fueled by intensifying market competition as companies work to maintain their competitiveness and relevance. Innovation as a service supports digital transformation by offering flexible, on-demand access to advanced technologies and specialized expertise. It speeds up the creation and deployment of new solutions, enabling businesses to remain competitive and adapt swiftly to evolving market demands. For example, in July 2024, the Office for National Statistics, a UK-based government agency, reported that the digital infrastructure program received a $535 million (£434 million) investment by 2022, with an additional $907 million (£736 million) allocated for 2023 to 2025. Consequently, the rising demand for digital transformation is contributing to the growth of the innovation as a service market.
Leading companies in the innovation as a service market are developing advanced technologies such as artificial intelligence (AI)-powered tools to boost creativity, automate functions, and accelerate innovation. AI-powered tools are software or systems that utilize technologies like machine learning, natural language processing, and computer vision to perform functions such as data analysis, automation, decision-making, and problem-solving with minimal human input. For instance, in January 2024, Cognizant, a US-based services company, partnered with Microsoft, a US-based technology firm, to launch Innovation Assistant, a generative AI-powered tool. This tool uses generative AI to facilitate idea generation and enhance problem-solving efficiency, making the innovation process faster and more accessible for organizations. It enables businesses to rapidly generate creative solutions, improve decision-making, and support digital transformation across various sectors.
In November 2024, HTEC Group Inc., a US-based technology consulting firm, acquired eesy-innovation GmbH for an undisclosed sum. This acquisition is intended to bolster HTEC's capabilities in embedded systems, Internet of Things (IoT), and artificial intelligence (AI), while expanding its presence in the European Union, particularly in the DACH region. eesy-innovation GmbH is a Germany-based engineering firm that delivers innovation as a service through its expertise in embedded systems and IoT solutions.
Major players in the innovation as a service market are International Business Machines Corporation, PricewaterhouseCoopers International Limited, Ernst & Young Global Limited, KPMG International Limited, Tata Consultancy Services Limited, Capgemini SE, Cognizant Technology Solutions Corporation, Deloitte Touche Tohmatsu Limited, EPAM Systems Inc., Persistent Systems Limited, The Boston Consulting Group Inc., IDEO LP, Techstars Corporate Innovation, NineSigma, Ignitho Technologies, Wazoku Limited, Brightidea Inc., IdeaScale Inc., RocketSpace, and InnovationLabs LLC.
North America was the largest region in the innovation as a service market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in innovation as a service report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.
The countries covered in the innovation as a service market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.
The innovation as a service market includes revenues earned by entities through innovation consulting, idea management, product and service design, technology scouting, rapid prototyping, digital transformation support, and innovation strategy development. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.
The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).
The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.
Innovation As A Service Global Market Report 2025 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.
This report focuses on innovation as a service market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.
Where is the largest and fastest growing market for innovation as a service ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward? The innovation as a service market global report from the Business Research Company answers all these questions and many more.
The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.
The forecasts are made after considering the major factors currently impacting the market. These include the Russia-Ukraine war, rising inflation, higher interest rates, and the legacy of the COVID-19 pandemic.