The smart manufacturing market is expected to grow from US$ 258.72 billion in 2022 to US$ 365.22 billion by 2028; it is estimated to grow at a CAGR of 6.0% from 2022 to 2028.
The adoption of digitization in the manufacturing sector has been driven by the need to enhance visibility and improve productivity in manufacturing processes. This has led to the growth of the smart manufacturing market, which is further boosted by technological advancements in data analytics, predictive maintenance, and industrial networking. The market is also being driven by the growing demand for software systems that provide real-time information over a single platform and the transformation of industries from legacy systems to smart components facilitated by Industry 4.0. Smart factory solutions are particularly beneficial for the automotive sector, which is witnessing rapid growth due to asset efficiency, cost savings, quality, and sustainability. The investments in the smart factory offer automotive manufacturers a competitive advantage, including better profitability and a shorter time to market. The smart manufacturing market growth is further fueled by various government initiatives such as the Smart Manufacturing Leadership Coalition (SMLC) and the Industrial Internet Consortium (IIC), which are aimed at boosting industrial automation.
A considerable portion of the worldwide smart manufacturing market is held by North America. The market growth in the region is driven by several factors, such as the growing adoption of industrial automation solutions that include IoT and cloud platforms, a rise in regulatory compliances, and an increasing demand for software systems that save time and cost. Manufacturing companies in Canada, the US, and Mexico are utilizing enterprise integration platforms, like enterprise service buses (ESBs), manufacturing service buses (MSBs), and application programming interface (API) managers to collect, analyze, and merge data, activate process controls, and optimize business processes across the enterprise and value chain systems.
The adoption of various technologies such as 3D food printing and machine vision, along with high investments in automation technologies for design flexibility, advanced software tools, and integrated safety solutions, are driving the growth of the smart manufacturing market in European Union countries like France, Germany, and the UK. Several manufacturers in industries such as automotive, aerospace & defense, food & beverages, and semiconductor & electronics are using 3D printing technologies to produce lightweight and cost-effective products. In addition, the processing capabilities of Big Data technologies like Hadoop, R, Storm, and streaming analytics support supply chain visibility, analysis, and diagnostics. The integration of Big Data analytics into industrial equipment enables the market players to analyze equipment lifespan, capacity fluctuation, and demand patterns, which further contributes to the adoption of smart manufacturing solutions.
During the forecast period, the APAC region is anticipated to witness the highest CAGR in the smart manufacturing market. Countries in the region are concentrating on automating their manufacturing facilities with initiatives such as "Make in India" and "Made in China 2025." The aim is to streamline supply chains, enhance safety, and reduce operational costs to gain a competitive advantage over other players. China, a major manufacturing hub, is currently undergoing rapid industrial transformation and is expected to spend approximately US$ 1.4 trillion on its digital infrastructure public spending program. Chinese manufacturers are adopting various smart manufacturing approaches, such as Industry 4.0 and Industrial IoT (IIoT), to optimize their manufacturing processes.
The smart manufacturing market is bifurcated on the basis of end-user and component. Based on end-users, the smart manufacturing market is divided into discrete industry and process industry. The discrete industry segment held a larger market share in 2020. Due to the rising production of medical devices, defense equipment, semiconductors, cars, and machines, advanced technologies are being adopted Based on component, the smart manufacturing market is bifurcated into hardware and software. The hardware segment holds a larger share of the market. The segment growth is due to the growing integration & implementation of RTL, robots, and sensors are expanding in manufacturing plants. Based on geography, the smart manufacturing market is segmented into North America (the US, Canada, and Mexico), Europe (Austria, Italy, Poland, Switzerland, Sweden, Norway, Denmark, the Netherlands, Finland, Spain, Baltic states and Rest of Europe), and Asia Pacific (Australia, Japan, South Korea, Taiwan, and Rest of APAC).
The size of the smart manufacturing market has been determined by utilizing both primary and secondary sources. A thorough secondary research process was carried out using internal and external sources to obtain qualitative and quantitative information relevant to the smart manufacturing market. This process also involved obtaining an overview and forecast of the smart manufacturing market for all its segments. Moreover, several primary interviews were conducted with industry participants to authenticate the data and obtain more analytical insights. The participants in this process include market experts such as business development managers, VPs, market intelligence managers, national sales managers, and external consultants including research analysts, valuation experts, and key opinion leaders who specialize in the smart manufacturing market.