Natural Language Processing (NLP) Market Size & Share, by Component (Solutions, Services); Deployment (On-Premise, Cloud); Organization (Large Enterprise, SMEs); Processing Type (Text, Voice, Image); Application (Education, Healthcare, BFSI, IT & Telecom, Media & Entertainment, Retail & Manufacturing) - Global Supply & Demand Analysis, Growth Forecasts, Statistics Report 2023-2035

  • Report ID: 4843
  • Published Date: Apr 23, 2023
  • Report Format: PDF, PPT

Global Market Size, Forecast, and Trend Highlights Over 2023-2035

Natural Language Processing (NLP) Market size is estimated to reach USD 345.7 Billion by the end of 2035, growing at a CAGR of 28.7% during the forecast period, i.e., 2023-2035. In the year 2022, the industry size of NLP was over USD 16.74 Billion. 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 NLP 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.


Natural Language Processing Market
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Natural Language Processing Sector: Growth Drivers and Challenges

Growth Drivers

  • Growing Sector of E-Commerce – Machines can quickly identify which phrases and terms are commonly used by humans when searching for a specific product using NLP. Global e-commerce increased from about 15% of total retail sales in 2019 to almost 21% in 2021. Furthermore, by 2022, it is expected to account for 22% of total revenues.
  • Increasing Spending on the Adoption of Natural Language Processing – More than 75% of organizations in the United Kingdom with active natural language processing (NLP) efforts intend to boost the amount they spend in the next 12 to 18 months.
  • Surging Use of Social Media– NLP is used to gauge sentiment in social media. Moreover, content analytics is an NLP-driven strategy of categorizing videos. One of the most popular internet activities is using social media. Over 4 billion individuals used social media worldwide in 2021, with that figure expected to rise to more than six billion by 2027.
  • Rising Penetration of Digitization–Natural Language Processing (NLP) provide solutions to the difficulties associated with unstructured data generated by digital transformation. There are around 5 billion active internet users globally. That equates to nearly 62% of the global population. Every day, over 500,000 new internet users are added.
  • Rising Implementation of Chatbots– NLP is an artificial intelligence (AI) program that assists your chatbot in evaluating and comprehending natural human language communication with the consumers and developing an conversational systems. Globally chatbots were expected to be used by nearly 25% of customers in 2020, up from nearly 13% in 2019.

Challenges

  • Lack of skilled engineers for developing NLP software - There is a scarcity of AI specialists who are looking for work. There was around a 15% reduction in applicant searches for AI-related employment between May 2018 and May 2019. It indicates that extremely few people choose to work in artificial intelligence. Furthermore, in Japan, there is going to be a shortfall of roughly 270,000 artificial intelligence engineers by 2030. Moreover, according to estimates from various interest groups, Germany now has a shortfall of around 96,000 IT specialists. Therefore, the shortage of AI engineers is likely to hamper the development of natural language processing.
  • Phrase, Slang, Irony, and Other NLP Barriers
  • NLP Has Limited Functionality

Natural Language Processing Market: Key Insights

Base Year

2022

Forecast Year

2023-2035

CAGR

~28.7%

Base Year Market Size (2022)

~ USD 16.74 Billion

Forecast Year Market Size (2035)

~ USD 345.7 Billion

Regional Scope

  • North America (U.S., and Canada)
  • Latin America (Mexico, Argentina, Rest of Latin America)
  • Asia-Pacific (Japan, China, India, Indonesia, Malaysia, Australia, Rest of Asia-Pacific)
  • Europe (U.K., Germany, France, Italy, Spain, Russia, NORDIC, Rest of Europe)
  • Middle East and Africa (Israel, GCC North Africa, South Africa, Rest of the Middle East and Africa)
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Natural Language Processing Segmentation

Organization (Large Enterprise, SMEs)

The NLP 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.

Deployment (On-Premise, Cloud)

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 market includes the following segments:

         By Component

  • Solutions
  • Services

          By Deployment

  • On-Premise
  • Cloud

          By Enterprise Size

  • Large Enterprise
  • Small & Medium Enterprise

          By Processing Type

  • Text
  • Voice
  • Image

             By Application

  • Education
  • Healthcare
  • BFSI
  • IT & Telecom
  • Media & Entertainment
  • Retail & Manufacturing

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Natural Language Processing Industry - Regional Synopsis

North American Market Forecast

The natural language processing market 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.

APAC Market Statistics

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 natural language processing 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.

Europe Market Forecast

Further, the natural language processing market in the Europe 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. 

Research Nester
Natural Language Processing Market Size
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Companies Dominating the Natural Language Processing Landscape

top-features-companies
    • Lexicala
      • Company Overview
      • Business Strategy
      • Key Product Offerings
      • Financial Performance
      • Key Performance Indicators
      • Risk Analysis
      • Recent Development
      • Regional Presence
      • SWOT Analysis
    • Apple Inc.
    • Amazon Web Services, Inc.
    • Baidu Inc.
    • Crayon AS
    • Google LLC
    • Meta Platforms Inc.
    • IBM Corporation
    • Inbenta Holdings Inc.
    • SAP SE

In-the-news

In The News

  • SAP SE announced the acquisition of Askdata for strengthening its capability to assist the companies for taking informed decision regarding the AI-driven natural language searches.
     
  • Lexicala K Dictionaries introduced new set of services for the language technology business and academia. The emphasis is on multilingual lexical data solutions that combine human-created and curated language resources with content generated automatically.

Author Credits:  Abhishek Verma, Hetal Singh


  • Report ID: 4843
  • Published Date: Apr 23, 2023
  • Report Format: PDF, PPT

Frequently Asked Questions (FAQ)

Rising use of social media, rising adoption of NLP, and rise in the e-commerce are the major factors driving the market growth.

The market size of natural language processing is anticipated to attain a CAGR of 28.7% over the forecast period, i.e., 2023-2035.

Lack of context understanding, and limited function in NLP are estimated to be the growth hindering factors for the market expansion.

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.

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

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.

The market is segmented by processing type, component, deployment, enterprise size, application, and by region.

The small & medium enterprise segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.
Natural Language Processing Market Report Scope
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