Testing, Inspection and Certification (TIC) Market

[516 Pages Report] The global testing, inspection, and certification (TIC) market is projected to grow from USD 223.9 billion in 2023 to USD 265.0 billion by 2028, registering a CAGR of 3.4% during the forecast period.

Some of the major factors contributing to the growth of the TIC market include stringent government regulations to ensure product safety and environmental protection, the need for interoperability testing due to IoT deployment, and increasing trade in counterfeit & defective pharmaceutical products. Moreover, the rising focus on digitalization to improve customer experience and the increasing importance of food safety & hygiene will further drive the growth of the TIC market in the near future.

Testing, Inspection and Certification (TIC) Market Forecast to 2028

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Market Dynamics:

Driver:  Increasing trade in counterfeit & defective pharmaceutical products

There has been a steep surge in selling fake and pirated goods worldwide. These malpractices are observed in almost all industries, including consumer electronics, medical devices, oil & gas, and aerospace. Illicit markets for fake pharmaceuticals are attractive for counterfeiters, given the high-profit margins, low risks of detection & prosecution, weak penalties, and the ease with which consumers can be deceived into believing that the counterfeit products are genuine. Substandard drugs are available in the market due to fraudulent activities and inadequate quality control processes (such as testing, inspection, and certification) during manufacturing. All these activities create opportunities for testing, inspection, and certification players to meet quality specifications and national standards for drug manufacturing companies. Testing, inspection, and certification service providers also review, assess, and approve manufactured products before commercialization.

Restraint: High cost of TIC services due to geographical diversity

Variations in regulatory standards across different geographies lead to discrepancies in tax rates, thereby incurring additional costs from companies (hiring local staff to handle tax-related issues). Testing, inspection, and certification companies are subject to local laws and must abide by the regulations and norms of the countries in which they operate; this may hamper their efficiency. Distinct local regulations and standards will likely create barriers to accepting products internationally. This creates conflicts between local and international standards, hindering market growth. The US and the EU have introduced various anti-pollution policies to address the impact of pollutants on air quality, including carbon monoxide, nitrogen oxide, and non-methane organic oxides. Permissible emissions levels in the EU are different from those in the US. Automakers operating in the US must meet the Corporate Average Fuel Economy (CAFE) standards enforced by the National Highway Traffic Safety Administration (NHTSA). The EU does not directly set fuel economy standards; however, greenhouse gas emission levels of new vehicles are regulated. Automobile manufacturers have developed personalized internal standards which take care of the safety requirements of all geographic markets wherein they operate.

Opportunity: Growing adoption of AI and ML worldwide

Technology is transforming across domains at an unprecedented rate. Major technological advances are observed in the healthcare industry. The ability to capture data from wearable devices, such as smartwatches, will make it possible to predict and treat health issues in people even before they experience any symptoms. When it comes to treatment, personalized approaches can be anticipated. This is also called precision medicine, which allows doctors to prescribe medicines and give treatments to their patients more precisely. Owing to innovations in genomics and AI, such technological advances help understand the difference between patients' reactions to different medications or treatments.

Similarly, electric vehicles (EVs) are one of the leading technologies worldwide. (EV testing goes way beyond homologation testing for vehicles and their components. It also covers the charging interfaces and associated systems that enable EVs, charging stations, and back-office systems to communicate, known as interoperability or conformance testing. With the increase in EV adoption worldwide, the demand for battery performance and safety testing, electric motor testing, vehicle performance testing, charger testing, and certification is likely to rise significantly. Also, other technologies such as IoT, computer vision, digital twin, machine learning, and autonomous driving have helped every value chain member to manufacture differentiated products/services, thereby accelerating the need for testing, inspection, and certification services by manufacturing companies to ensure that their products, processes, and services are smoothly delivered.

Challenge: Low adoption rate of innovative technologies

Through globalization, multiple technologies have penetrated different end-use applications, including robot testing, inspection, and certification automation in manufacturing, machine learning (ML) in digital marketing, artificial intelligence (AI) for chat boxes, and digital twins in customer experience. Testing, inspection, and certification players will face new challenges in the near future as a result of the digital experience. For example, the augmented reality (AR) and virtual reality (VR) testing ecosystem is experiencing an increasingly competitive consumer landscape; brands are continuously striving to differentiate themselves from their competitors and engage more customers. AR/VR testing is challenging due to an immersive component that complicates automated or lab testing. For VR devices, hardware testing is crucial to critiquing, inspecting, and certifying them. To ensure that the device is compatible with other devices needed to run the simulation, this testing ensures that it works properly, fits in the target demographic, and is compatible with other devices.

Testing, Inspection, and Certification Market Ecosystem

The global Testing, Inspection and Certification (TIC) industry is dominated by reliable and well-established players offering testing, inspection, and certification services. With strong global sales and marketing networks, these companies have been in business for several years and offer a diverse service portfolio. Dominant companies in this market include SGS SA (Switzerland), Bureau Veritas (France), Intertek Group plc (UK), Eurofins Scientific (Luxembourg), DEKRA SE (Germany), TÜV SÜD (Germany), DNV GL (Norway), TÜV RHEINLAND (Germany), Applus+ (Spain), and TÜV NORD Group (Germany).

By service type, the testing service segment is expected to account for the largest share of the TIC market during the forecast period

For the majority of applications, testing, inspection, and certification services are necessary to determine whether the goods provided by manufacturing firms are in compliance with the necessary standards and laws. For instance, testing services are used in the automobile industry to ensure that various parts and solutions—such as materials, connected car systems, and automotive lighting—adhere to the established standards and legal requirements. The adoption of digital technology is the current trend in the global testing, inspection, and certification business. Digital technology adoption is a priority for businesses like SGS, Intertek, and Bureau Veritas since it is predicted to accelerate market growth. Verifying the security, effectiveness, and safety of products, processes, or services is another area of concentration for TIC firms. Before a product is launched and after it has been put into use or service, products are verified twice. These verifications are either done in a lab, on-site, or through other techniques. Additionally, due to the expanding worldwide commerce and regulatory requirements as well as the increased emphasis on adopting digital technologies on the part of manufacturers, testing, inspection, and certification services are being progressively outsourced.

By sourcing type, the in-house sourcing segment is expected to account for the largest share during the forecast period

The in-house sourcing segment is expected to account for the larger market share owing to the criticality of applications; industries such as the public sector and mining prefer in-house services rather than outsourced TIC services. In-house testing services provide companies with complete control over the entire process and production plant. In-house testing services are conducted by companies that have in-house core business expertise. To perform in-house testing, inspection, and certification activities, a company must build in-house capabilities in biotechnology, testing, and measurement equipment and skilled personnel. Approximately 60% of the testing, inspection, and certification services are conducted in-house. This process is particularly evident in applications such as life sciences, utilities, and public sectors. For instance, Intertek conducts in-house testing, inspection, and certification services for many aerospace companies such as Boeing, Airbus, and GE Aviation. Intertek can test its products to ensure they meet the required standards, as it has state-of-the-art devices and equipment to test & inspect the aircraft and its components.

By application, medical and life sciences segment is expected to grow at a higher rate during the forecast period

Test, inspection, and certification market growth is projected to be highest in the medical and life sciences application segment during the forecast period. As technology in the medical industry continues to advance, TIC services are expected to be in greater demand. In order to ensure the safety and well-being of patients, testing, inspection, and certification services are essential for medical devices such as active implants, active/non-active implants, in-vitro diagnostic devices (IVD), ophthalmic devices, orthopedics and dental devices, and vascular devices. Through these services, manufacturers can market and sell medical devices internationally. A changing regulatory environment, especially for medical devices, forces manufacturers to adopt testing, inspection, and certification services. Key testing, inspection, and certification services adopted in the medical devices industry include biocompatibility testing, electromagnetic compatibility (EMC) testing, clinical research, and wireless/telemedicine testing services. These services ensure the quality and safety of medical devices. Testing, inspection, and certification service providers require certifications from accreditation bodies to issue certifications to their clients for medical devices.

North America is projected to hold the second-largest share of the overall global TIC market by 2028

Testing, Inspection and Certification (TIC) Market by Region

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The market in North America has been further segmented into the US, Canada, and Mexico. The US is the leading consumer goods and retail product user, thereby driving the demand for testing, inspection, and certification services in the region. Also, it is the base of the world's leading companies across various verticals. The presence of startups also has a robust presence in this region. The North American Free Trade Agreement (NAFTA)-an agreement signed by the US, Canada, and Mexico, forming a trilateral trade bloc in North America-is a key factor contributing to the growing trade in the region. NAFTA was created to eliminate the barriers to exchanging goods and services among the three countries and has been moderately successful. It has mainly benefited Mexico and Canada.

Key Market Players

Some of the key players in the testing, inspection, and certification (tic) companies are SGS S.A. (Switzerland), Bureau Veritas (France), Intertek Group plc (UK), Eurofins Scientific (Luxembourg), and DEKRA SE (Germany), TÜV SÜD (Germany), DNV GL (Norway), TÜV RHEINLAND (Germany), Applus+ (Spain), and ALS (Australia).

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Scope of the Report

Testing, Inspection and Certification (TIC) Market Highlights

This research report categorizes the TIC market based on service type, sourcing type, application, and region.

Recent Developments

• In January 2023, SGS partnered with the Fairness, Integrity, Safety, And Health (FISH) Standard for Crew (US), offering a voluntary, impartial, and recognized third-party certification scheme for labor practices. These labor practices are meant for board vessels engaged in global wild-capture fisheries to award FISH certification to Phoenix Processors Limited Partnership (PPLP) for two processor vessels: M/V Excellence and M/V Phoenix.
• In December 2022, ALS Limited (ALS) acquired the ExplorTech Division of Earthlabs Inc., formerly GoldSpot Discoveries Corp. (Canada), to deliver discovery-vectoring consulting services to clients. GoldSpot Discoveries Corp. is recognized as a global leader in AI and data science, using AI to transform the mineral discovery process.
• In December 2022, UL Solutions launched the SPIRE Qualification Program to meet the smart building assessment and verification demand. UL Solutions' SPIRE Qualification Program enables qualified third-party assessors to conduct SPIRE Smart Building Assessments and gain insights from UL Solutions smart building experts.
• In November 2022, TÜV Rheinland introduced a test standard (2 PfG 2796/02.22) to certify solar modules installed into unique buildings worldwide.
• In September 2022, SGS S.A. acquired Penumbra Security, Inc. (US), a leading provider of information security conformance testing and regulatory compliance services to multinational companies. The acquisition expanded SGS's cybersecurity capabilities and footprint in the US.

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