Engineering Research and Development (ER&D) Outlook for 2026

Global Engineering Research and Development (ER&D) spending demonstrated resilience in 2025, growing despite volatile global trade, supply-chain disruptions, geopolitical tensions, regulatory complexities, and persistent cost inflation. While broader enterprise sentiment remained cautious, engineering investments continued to support strategic priorities such as military modernization, semiconductor self-reliance, smart manufacturing, and AI enablement.

As we move into 2026, ER&D growth is becoming increasingly differentiated across industries. Defense, semiconductor, and AI-native sectors are sustaining strong investment momentum, supported by sovereign capability building, rising compute demand, and software-led innovation. In contrast, automotive, healthcare and life sciences, consumer electronics, telecom, and select industrial segments are moderating expansion and prioritizing operational efficiency, compliance, and software-defined transformation initiatives.

This report presents Everest Group’s 2026 outlook for global ER&D enterprise spending and services growth. It analyzes cross-vertical investment dynamics, assesses key macroeconomic and technology drivers, and outlines strategic considerations for engineering providers navigating an environment defined by resilience, selectivity, and structural divergence.