Technical & Scientific Research Services Industry Trends

Increased Defense, Homeland Security Spending

Worldwide political and economic developments have caused US defense spending to rise. The government often contracts with independent testing facilities to test new equipment. Homeland security spending has also risen, increasing demand for testing facilities.

Competition for Workers

Reflecting the tight market for qualified testing lab workers, average lab wages have risen faster than the national average for all industries. Average wages for testing lab production workers increased 25 percent from 2001 to 2006; 15 percent for all production workers.

International Quality Standards

Global competition and higher quality expectations by customers have driven the development of international quality standards. The International Standards Organization has developed standards and certification processes, such as the ISO 9000 quality standards, that are recognized worldwide and have become a competitive requirement in many industries. These standards create additional demand for testing labs and make it easier for labs to perform work globally.

Emergence of Offshore Testing Labs

Some large labs have established testing capabilities overseas to meet the needs of large US customers with manufacturing facilities abroad. The labs can take advantage of low cost, highly skilled labor in countries such as India, South Korea, and Vietnam. Growth of overseas manufacturing and R&D facilities, particularly in Asia, should spur continued expansion of offshore testing labs.