The Smart Manufacturing Market is expected to reach $446.24 billion by 2029, at a CAGR of 21.5% during the forecast period of 2022–2029. The growth of the smart manufacturing market is attributed to factors such as the increasing number of government initiatives to promote industrial automation, the rising number of investments in Industry 4.0, growing demand for safety regulation compliance, and high labor costs in developed economies. However, the high capital and operating expenses and a lack of standardization for technology platforms are some of the major factors restraining the growth of this market.
The advent of 5G connectivity in smart manufacturing and the proliferation of smart manufacturing in developing countries are expected to offer significant growth opportunities for players operating in this market. However, privacy and data protection concerns and the lack of a requisite skilled workforce to implement and operate technologies are some of the major challenges to the growth of the smart manufacturing market.
Impact of COVID-19 on the Smart Manufacturing Market
In the first quarter of 2020, the world was severely impacted by the outbreak of the COVID-19 pandemic. The WHO declared the outbreak a global pandemic due to its quick spread worldwide. The COVID-19 pandemic adversely impacted many economies globally. Combat measures such as complete lockdowns and quarantine negatively affected many businesses worldwide, including the manufacturing market.
The spread of COVID-19 severely impacted the performance of several industries and economies globally. Governments were forced to shut down manufacturing plants and halted import-export operations. As a result, several industries stopped their ongoing production operations, which disrupted supply chains and affected the demand-supply balance.
The COVID-19 outbreak significantly influenced the manufacturing industry by reducing its dependency on manual labor and highlighted the importance of adopting advanced technologies, such as AI, machine learning, and IoT. Thus, there is increasing adoption of smart manufacturing technologies from various industries in their production processes. The adoption of smart manufacturing has resulted in improved productivity, higher quality, near-zero design error, energy efficiency, leaner process, flexibility in production scale, increased agility, improved predictability, and enhanced process monitoring. These benefits align with the requirement of the new dynamic protocols precedent by the COVID-19 pandemic, influencing the adoption of smart technologies, digital automation, and industrial IoT demand across the industry.
Smart manufacturing improved companies' productivity and optimized the workforce required for the same role. It also facilitated remote factory monitoring at greater efficiency irrespective of time and place constraints. It provided the much-required flexibility to the manufacturing units to change the product design and quickly adapt to new processes as per clients' demands.
Furthermore, the digital twin technology drastically reduced the cost of designing products in a single go. It also offered benefits such as accelerated risk assessment and production time, improved OEE through reduced downtime and improved performance, reduced risks in areas such as product availability and marketplace reputation; new business opportunities through mass customization, mixed manufacturing, small-batch manufacturing, improved product quality and enhanced insights into the performance of products in multiple real-time applications and environments.
Thus, the COVID-19 pandemic positively impacted the smart manufacturing market. It is anticipated that this trend of smart technologies adoption will continue and grow during the forecasted period.
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Rising Number of Investments in Industry 4.0 Expected to Drive the Growth of the Smart Manufacturing Market
The fourth industrial revolution, or Industry 4.0, is packed with several benefits for the modern manufacturing sector, such as increased productivity, improved efficiency, increased knowledge sharing & collaborative working, flexibility & agility, and reduction in production cost. These factors have influenced the public and private sector players to invest heavily in transforming their manufacturing facilities.
Industry 4.0 has increased the use of digital technologies, such as automation, data analytics, and IIoT. The adoption of digital technologies is transforming nations, production systems, and how goods and services are delivered to markets. This wave of transformation has important implications for industrial development, skills requirement, global value chains, and countries' efforts to effectively attract investments in Industry 4.0.
In March 2022, the World Economic Forum announced 13 new sites to its Global Lighthouse Network, a community of 103 world-leading manufacturing facilities and value chains using Fourth Industrial Revolution technologies to increase operational performance and environmental sustainability. Among the companies in the global network, 66% of lighthouse companies, including Janssen (Italy), Sanofi (France), BOE Technology Group (China), Schneider Electric (India), and Unilever (India), made sustainability improvements by reducing consumption, resource waste and carbon emissions, and increased productivity by 82%.
In 2021, the Indian manufacturing sector invested approximately $5.5 billion to $6.5 billion in Industry 4.0. In September 2020, the U.S. provided more than $1 billion toward establishing 12 new research and development hubs for AI and quantum information science (QIS) nationwide. Similarly, in February 2021, Singapore also budgeted $18.1 billion over the next three years to help local businesses innovate and build the capabilities needed to take them through the next transformation phase by adopting emerging technologies, such as 5G, artificial intelligence (AI) and cybersecurity. Such consistent investments by the public and private sectors to promote Industry 4.0 are a major driver for the smart manufacturing market.
Key Findings in the Smart Manufacturing Market Study:
Industrial IoT Segment to Witness the Largest Share Through 2029
Based on technology, the smart manufacturing market is segmented into industrial IoT, cloud computing & storage, robotics & automation, industrial cybersecurity, additive manufacturing, AR/VR, digital twin, artificial intelligence, and blockchain. In 2022, the industrial IoT segment is expected to account for the largest share of the smart manufacturing market. The large market share of this segment is attributed to factors such as the consistent declining cost of industrial IoT sensors, the significant rise in the overall equipment effectiveness (OEE) through industrial IoT usage, and the increasing government initiatives to promote digital transformation.
Surveillance & Safety Segment Expected to Dominate the Smart Manufacturing Market
Based on application, the smart manufacturing market is segmented into surveillance & safety, quality management, resource optimization, inventory & warehouse management, machine inspection & maintenance, production planning, and energy management. In 2022, the surveillance & safety segment is expected to account for the largest share of the smart manufacturing market. The large market share of this segment is attributed to factors such as the growing requirement for reliable safety systems to ensure personnel and asset protection, the increasing need for video monitoring in manufacturing facilities, strict government mandates for safety regulations, and the rising need for real-time analysis and tracking.
Based on geography, the smart manufacturing market is segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. In 2022, Asia-Pacific is expected to account for the largest share of the smart manufacturing market. This region is also slated to register the highest growth rate during the forecast period. The high market growth in Asia-Pacific is driven by the increasing deployment of automation across manufacturing units, the rising number of government initiatives for the adoption of industrial robots, the advent of Industry 4.0, and the presence of prominent key players in the region.
Key Players
The report includes a competitive landscape based on an extensive assessment of the key strategic developments adopted by the leading market participants in the smart manufacturing market over the last three years. The key players profiled in the smart manufacturing market are Amazon Web Services, Inc. (U.S.), Robert Bosch Manufacturing Solutions GmbH (Germany), Cisco Systems, Inc. (U.S.), 3D Systems Corporation (U.S.), Plex Systems, Inc. (U.S.), Cognex Corporation (U.S.), PTC Inc. (U.S.), FANUC CORPORATION (Japan), SAP SE (Germany), Mitsubishi Electric Automation, Inc. (U.S.), Emerson Electric Co. (U.S.), Siemens AG (Germany), Schneider Electric SE (France), ABB Ltd (Switzerland), Hitachi, Ltd. (Japan), and Intel Corporation (U.S.).
Scope of the Report:
Smart Manufacturing Market, By Technology
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Industrial Internet of Things
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Cloud Computing & Storage
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Robotics & Automation
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Robots
- Automated Storage and Retrieval Systems (ASRS) and Automatic Guided Vehicles (AGVS)
- Automated Assembly Lines
- Wearables & Mobile Devices
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Industrial Cybersecurity
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Additive Manufacturing
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Augmented Reality (AR)/Virtual Reality (VR)
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Digital Twin
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Artificial Intelligence
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Blockchain
Smart Manufacturing Market, By Application
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Surveillance & Safety
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Quality Management
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Resource Optimization
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Inventory & Warehouse Management
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Machine Inspection & Maintenance
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Production Planning
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Energy Management
Smart Manufacturing Market, By End-use Industry
- Automotive
- Heavy Machinery & Tools
- Aerospace & Defense
- Metals & Mining
- Electronics & Semiconductors
- Medical Devices
- Food & Beverage
- Pharmaceuticals
- Oil & Gas
- Fast-moving Consumer Goods (FMCG)
- Paints & Chemicals
- Energy & Power
- Pulp & Paper
- Other End-use Industries (Agriculture and Prefabricated Construction)
Smart Manufacturing Market, By Geography
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North America
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Europe
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Germany
- U.K.
- France
- Italy
- Spain
- Rest Of Europe
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Asia-Pacific
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China
- Japan
- India
- South Korea
- Rest Of Asia-Pacific
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Latin America
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Middle East & Africa
Key questions answered in the report: