Natural Language Processing (NLP) Market Analysis by Component (Solutions, Services); Deployment (On-Premise, Cloud); Enterprise Size (Large Enterprise, Small & Medium Enterprise); Processing Type (Text, Voice, Image); Application (Education, Healthcare, BFSI, IT & Telecom, Media & Entertainment, Retail & Manufacturing) – Global Supply & Demand Analysis & Opportunity Outlook 2023-2035
Buy Now Report ID: 4843 | Published Date: Apr 23, 2023
Natural Language Processing Market size is estimated to reach ~USD 345.7 Billion by the end of 2035 by growing at a CAGR of ~28.7% over the forecast period, i.e., 2023 – 2035. In addition to this, in the year 2022, the market size of natural language processing was ~USD 16.74 Billion. The growth of the market can be attributed to the increasing use of chatbots for assisting customer services and for advertising the business. Customer service leverages NLP tools as a first point of contact to answer simple questions related to products and features. Around 75% of Chinese marketers are keen to employ chatbots for promoting their products and businesses. In addition, nearly 54% of respondents in China believe chatbots can deliver intelligent solutions to customer complaints. In addition to this, around 62% of customers would rather utilize a customer care bot than wait for human personnel to respond to their inquiries.
In addition to these, factors that are believed to fuel the market growth of natural language processing include the rising adoption of automation and higher implementation of the multi-languages in the machines. For instance, in August 2022, Ameca, created by the UK-based corporation Engineered Arts, presented a wide range of human-like expressions. Ameca's creators have now revealed a new video in which the robot is seen demonstrating its polyglot-like abilities, speaking numerous languages including Japanese, German, Chinese, French, British, and American English. Besides this, the market growth is attributed to the rising spending on AI-related technologies. In 2021, end-user spending on artificial intelligence (AI) systems in Japan was over USD 2 billion.
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
~28.7% |
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Base Year Market Size (2022) |
~ USD 16.74 Billion |
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Forecast Year Market Size (2035) |
~ USD 345.7 Billion |
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Regional Scope |
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Growth Drivers
Challenges
The market is segmented and analyzed for demand and supply by enterprise size into large enterprises, and small & medium enterprises. Out of the two sizes of enterprises, the small & medium segment is estimated to gain the largest market share in the year 2035. The growth of the segment can be attributed to the increasing adoption of digitization by small and medium businesses. According to a survey, digitization is continuously growing, with up to 70% of small firms increasing their use of digital technologies as an outcome of the pandemic across the globe. On the other hand, the growth of the segment is also attributed to a rise in the number of small size of businesses. According to the World Economic Forum, small enterprises are the foundation of the world's economy, representing 90% of all businesses, around 60-70 percent of overall employment, and 50% of the global GDP. In addition to this, there are currently approximately 400 million SMEs worldwide. They are responsible for the majority of new employment creation and account for around 99% of all firms.
The global natural language processing market is also segmented and analyzed for demand and supply by deployment into on-premise, and cloud. Amongst these two segments, the cloud segment is expected to garner a significant share in the year 2035. The growth of the segment is primarily attributed to the higher deployment of cloud services. The exceptional circumstances imposed by the epidemic prompted the usage of the cloud. By 2020, more than 80% of company workloads will have been migrated to the cloud. On the other hand, many organizations have made considerable expenditures in updating their cloud computing infrastructures. Moreover, around 94% of all organizations globally use cloud computing in their operations. On the other hand, higher use of cloud natural language processing services is likely to augment the segment growth. A cloud NLP service is used by more than three-quarters of natural language processing (NLP) users, worldwide. Furthermore, cloud-based NLP solution provides multiple pricing options based on usage and necessity.
Our in-depth analysis of the global natural language processing market includes the following segments:
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By Component |
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By Deployment |
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By Enterprise Size |
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By Processing Type |
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By Application |
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The market share of natural language processing in North America, amongst the market in all the other regions, is projected to be the largest with a share of about ~36% by the end of 2035. The growth of the market can be attributed majorly to the increasing investment in AI-related technologies. Funding for artificial intelligence startups in the United States has expanded significantly in recent years, rising from a minimum of under USD 300 million in 2011 to about USD 17 billion in 2019. On the other hand, the rising use of chatbots and social media is likely to boost market growth in the region. With approximately 16,000 websites containing a chatbot, the United States is a global leader. Furthermore, the United States had approximately 300 million social media users as of 2023. That is, approximately 90% of the general public in the United States actively uses social media.
Asia Pacific natural language processing market is projected to be the second largest, registering a share of about ~27% by the end of 2035. This growth is attributed to the higher adoption of digitization followed by a rise in the number of smartphone users. The start of the government's Digital India plan of action, coupled with recent increases in internet penetration, resulted in the country's digital population reaching approximately 692 million active users by February 2023. Furthermore, mobile user traffic in India is the second greatest in the world. In addition to this, the number of organizations offering virtual assistant platforms is increasing, as the use of natural language processing is also expected to boost the market growth in the region. For instance, Kore.ai, a prominent AI software vendor, has launched an enterprise-grade virtual assistant platform. This platform encompasses various conversational AI technologies including NLP, machine learning, NLU, predictive analytics, and deep learning.
Further, the market in the Europe, amongst the market in all the other regions, is projected to hold a majority of the share by the end of 2035. The growth of the market can be attributed majorly to the rise in the number of online shoppers. According to Eurostat, the average number of e-shoppers increased by 20 percentage points (pp) from 55% in 2012 to 75% in 2022. Moreover, in 2022, the Internet users who bought or ordered products or services through the internet in the Netherlands, Denmark, and Ireland had the largest proportions of 92%, 90%, and 89%, respectively.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Author Credits: Abhishek Verma, Hetal Singh
Ans: Rising use of social media, rising adoption of NLP, and rise in the e-commerce are the major factors driving the market growth.
Ans: The market size of natural language processing is anticipated to attain a CAGR of ~28.7% over the forecast period, i.e., 2023 – 2035.
Ans: Lack of context understanding, and limited function in NLP are estimated to be the growth hindering factors for the market expansion.
Ans: The market in the North American region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.
Ans: The major players in the market are Apple Inc., Amazon Web Services, Inc., Baidu Inc., Crayon AS, Google LLC, Meta Platforms Inc., IBM Corporation, Inbenta Holdings Inc., SAP SE, and Lexicala
Ans: The company profiles are selected based on the revenues generated from the product segment, the geographical presence of the company which determines the revenue generating capacity as well as the new products being launched into the market by the company.
Ans: The market is segmented by processing type, component, deployment, enterprise size, application, and by region.
Ans: The small & medium enterprise segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.
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