The global manufacturing sector will spend over $1 trillion on smart software, hardware and services in 2030, almost quadrupling the $259 billion spend in 2019.
The volume of wireless connections, including LTE and 5G, as well as low-power wide-area (LPWA) technologies and Wi-Fi, will spiral upwards at the same time. There are 260 million digital factory connections in 2019, with 230 million made via a fixed line; the total number will jump to 5.5 billion by 2023, with most functions connected wirelessly.
Analyst house ABI Research has run the rule over the sector, and extrapolated forecasts around investments on digital change solutions in the manufacturing sector over the next decade, pegged against the rise of industrial-grade mobile networks, low-power tracking solutions, and the emergence of artificial intelligence (AI), augmented reality (AR), robotics (AGVs, AMRs), and cloud based simulation and modelling (‘digital twins’) at the same time.
It said most money will go on hardware, with revenue growing four-fold from $200 billion in 2019 to $800 billion in 2030. Beyond hardware, the manufacturing sector will invest $185 billion in analytics services in 2030, up from $11 billion in 2019; $134 billion on connected machine tools, including 3D printers, computer numerical control (CNC) machines, lathes, mills, and drills; $78 billion on asset tracking; and $40 billion on connected programmable logic controllers (PLCs).
Ryan Martin, principal analyst for industrial and manufacturing at ABI Research, said: “The transformative shift toward Industry 4.0 technologies and the broader field of software-defined manufacturing (SDM) presents a massive opportunity for a wide range of technology providers and implementers.”
The total spend on software solutions will go from $59 billion in 2019 to $375 billion in 2030, and grow as a proportion of the whole in the period, it said; revenues from connected hardware will diminish as a proportion of the total, at the same time. “As the amount of custom code required to deploy new solutions on the factory floor drops, data and analytic service revenue growth in smart manufacturing will accelerate,” said Martin.
The manufacturing sectors leading the Industry 4.0 charge are automotive, heavy machinery, food, beverage, tobacco products, and electronics. Around half of the global revenue opportunities will be concentrated in China and the US, followed by Germany and Japan. The US leads the way in most industries, including automotive; China leads in machinery, nonmetallic mineral products, primary metals, and textiles.
Martin said: “There is a long and compelling list of digital transformation technologies and pilot projects that are now graduating to the factory floor. The companies and production environments embracing these opportunities have quickly seen the benefits and want to scale, rather than risk falling behind.”
