Smart manufacturing is an increasingly important feature of the global industrial sector. The rising adoption of smart manufacturing solutions has been brought about by the mounting labor concerns across the world and the notable advantages smart manufacturing systems imparts in terms of efficiency and precision. These traits, highly valued in mass production, are likely to ensure steady growth of the global smart manufacturing market in the coming years.
According to Transparency Market Research (TMR), the global smart manufacturing market was valued at US$159 bn in 2015. Exhibiting a robust CAGR of 13.2% between 2016 and 2024, the smart manufacturing market is expected to rise to an overall valuation of US$548.1 bn by the end of 2024.
What are the key drivers for the global smart manufacturing market?
The leading driver for the global smart manufacturing market is the priority being given to long-term process efficiency and cost reductions in the industrial sector. Switching from high-income developed regions to developing countries, where competent labor can be available at relatively cheaper costs, has helped many industries cut down its manufacturing expenses significantly. However, due to the lack of long-term sustainability of low-cost labor in emerging regions, in light of the rising disposable income of consumers in developing countries, has led to many industries reconsidering their options and opting for smart manufacturing solutions instead. This is likely to remain a key driver for the global smart manufacturing market in the coming years.
The steady growth of the global Internet of Things (IoT) industry has also been crucial for the global smart manufacturing market. The intensive research into the development of power-efficient smart devices has boosted the profit margin of the smart manufacturing market. The remote connectivity and operability of smart manufacturing systems is also dependent to a considerable extent on the trajectory of the connected devices industry, making this a key factor in the future growth trajectory of the smart manufacturing market.
Is smart manufacturing picking up speed in developing regions?
The global smart manufacturing market is centered on North America and Europe, as these two regions offer the latest technological advances. The solid government support to urbanization and industrialization in these regions has also helped drive the smart manufacturing market.
However, emerging regions such as Asia Pacific are likely to become prominent in the global smart manufacturing market in the coming years. In November 2016, Melbourne’s Swinburne University of Technology and the Australian Manufacturing Growth Centre announced a joint project to promote the use of smart manufacturing solutions in Australia’s manufacturing sector. The partnership is the first of its kind, being initiated expressly to promote the use of Industry 4.0 technologies in Australia.
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Around the same time, Chinese ecommerce giant Alibaba Group Holding Ltd. announced the establishment of a new center in Shenzen, Guangdong Province. The province is among the traditional leaders in China’s manufacturing sector and could be set for a revolutionary uptake of smart manufacturing technologies due to the strong push provided by Alibaba.
Thanks to such initiatives in dynamic Asia Pacific economies such as India, China, South Korea, Thailand, and Indonesia, the smart manufacturing market is likely to exhibit steady growth in the region in the coming years.