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IN THE NEWS· September 2020: Schneider Electric announced that its smart factory established in Lexington, Kentucky earned the fourth Industrial Revolution (4IR) Advanced Lighthouse Designation. The facility is known for deploying a revolutionizing energy management strategy by using industrial IoT and cloud-based analytics.
The global smart factory market is estimated to garner a sizeable revenue by growing at a CAGR of ~12% over the forecast period, i.e., 2022 – 2030. The growth of the market can be attributed to the increasing focus on energy conservation in factories, growing demand for artificial intelligence and IoT in industrial environments, and rising adoption of industrial robots in factories. It is calculated that the number of businesses adopting artificial intelligence will grow by more than 250% from 2019 to 2023. Every 9 in 10 leading businesses already have ongoing investments in AI technology. In addition, the use of wireless sensor networks (WSN) in industrial plants is gaining traction over the last few years. WSN is extremely beneficial in reducing the costs associated with the implementation of communication and sensor networks, which in turn is projected to offer lucrative opportunities to the market growth in the near future. Furthermore, rise in digitization in several aspects of supply and chain processes across the world is also expected to drive market growth in the upcoming years.
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The market is segmented by component into hardware, software, and services, out of which, the software segment is anticipated to hold the largest share in the global smart factory market on account of the high usage of software solutions such as enterprise resource planning, product lifestyle management and others, since many years. Along with this, growing application of AI and analytics is also assessed to boost the growth of the market segment. For instance, about 84% of businesses are pursuing big data projects as of 2021. Out of these, more than 60% organizations reported to have been benefitted from the use of big data and analytics. Additionally, on the basis of product, the segment for industrial 3D printers is evaluated to witness the highest CAGR over the forecast period owing to their increasing adoption in various end-user industries, namely food & beverages, aerospace and electronics.
The never-ending growth in internet accessibility around the world along with numerous technological advancements comprising 5G, blockchain, cloud services, Internet of Things (IoT), and Artificial Intelligence (AI) among others have significantly boosted the economic growth in the last two decades. As of April 2021, there were more than 4.5 billion users that were actively using the internet globally. Moreover, the growth in ICT sector has significantly contributed towards GDP growth, labor productivity, and R&D spending among other transformations of economies in different nations of the globe. Furthermore, the production of goods and services in the ICT sector is also contributing to the economic growth and development. As per the statistics in the United Nations Conference on Trade and Development’s database, the ICT good exports (% of total good exports) globally grew from 10.816 in 2015 to 11.536 in 2019. In 2019, these exports in Hong Kong SAR, China amounted to 56.65%, 25.23% in East Asia & Pacific, 26.50% in China, 25.77% in Korea, Rep., 8.74% in the United States, and 35.01% in Vietnam. These are some of the important factors that are boosting the growth of the market.
On the basis of geographical analysis, the global smart factory market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America and the Middle East & Africa. The market in Asia Pacific is estimated to gather the largest market share and witness noteworthy growth over the forecast period on the back of rising factory automation, especially in China, and large number of automobile manufacturing plants in the region. Apart from these, increasing population and growing demand for energy are also expected to drive market growth in the APAC. As per the International Energy Agency, the overall energy demand in Southeast Asia is projected to grow by 60% by the end of 2040. India is evaluated to witness the highest energy demand in the same year, accounting for 925 Mtoe units of energy. Moreover, the market in the Middle East & Africa is assessed to observe the highest CAGR during the forecast period, which can be credited to the growing government investments in smart manufacturing technologies, and the presence of major oil & gas manufacturers in the region.
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The global smart factory market is further classified on the basis of region as follows:
Our in-depth analysis of the global smart factory market includes the following segments:
FREQUENTLY ASKED QUESTIONS
The major factors driving market growth are growing adoption of industrial robots in factories and rising demand for AI and IoT in industrial environments.
The market is anticipated to attain a CAGR of ~12% over the forecast period, i.e., 2022 – 2030.
Requirement for high capital investments for deploying smart factory is estimated to hamper the market growth.
The Middle East & Africa will provide more business opportunities to the market on the back of growing government investments in smart manufacturing technologies in the region.
The major players in the market are GENERAL ELECTRIC COMPANY, ABB Ltd., Rockwell Automation, Inc., Emerson Electric Co., Schneider Electric SE, and others.
The company profiles are selected based on the revenues generated from the product segment, geographical presence of the company which determine the revenue generating capacity as well as the new products being launched into the market by the company.
The market is segmented by component, product, end user, and by region.
The software segment is anticipated to hold largest market size and is estimated to grow at a robust CAGR over the forecast period and display significant growth opportunities.
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