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The global Artificial Intelligence in healthcare market size was valued at USD 10.54 billion in 2021 and is projected to grow from USD 13.82 billion in 2022 to USD 164.10 billion by 2029, exhibiting a CAGR of 42.4% during the forecast period. Based on our analysis, the global AI in healthcare market exhibited a higher growth of 42.4% in 2020 as compared to 2019. The global COVID-19 pandemic has been unprecedented and staggering, experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels.
Artificial Intelligence (AI) in healthcare is used to analyze the medical data that helps doctors and medical providers to deliver accurate diagnosis and treatment to their patients. AI in healthcare assists doctors, nurses, and other healthcare workers to enhance their productivity. This advancement helps patients in treatment and improve their quality of life. Also, according to an article published by GE Healthcare, it is found that healthcare professionals are already using AI to improve data analysis that has enabled them to diagnose their patients in a better way with proper predictions for the treatment and decrease the time spent by the medical staff on administrative functioning.
The expansion of AI in the healthcare industry due to investments made by private and government enterprises in the healthcare sector and advancements administered in the field of medicines, research, innovation, and technology are expected to drive the growth of the market.
Such collaborations or investments are projected to contribute to the Artificial Intelligence in healthcare market growth.
COVID-19 Pandemic Led to an Increase in the Adoption of AI-based Tools and Solutions
The impact of COVID-19 is expected to result in a considerably high growth of the Artificial Intelligence (AI) in healthcare market during the analysis period. This is attributed to the significant acceleration in the demand for AI-based tools and solutions, due to its ability to diagnose COVID-19 by keeping track of the spread of the virus.
Also, increase in demand for Electronic Health Record (EHR) system, which is used as an assistance for analyses of the risk profiling of the pandemic, among the population, in order to get real-time data contributed to the growth of the market.
The entry of major key players with a focus on collaborations with different companies and launch of new advanced technology in the market contributed to the revenue growth of the market.
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Rising Implementation of Artificial Intelligence and Robotics is Transforming the Healthcare Industry
The increase in advancement in new technology that helps in assisting diagnosis and treatments of pharmacological disorders is likely to propel the growth of the market. Also, virtual assistant cans be used to transform the delivery of the care to patients by improving patient symptom checking, providing e-consultation, tracking patient health and sending medication alerts, and many more.
Investments by Private and Government Sectors in Artificial Intelligence to Drive the Market Growth
Increase in investments by the pharmaceutical and MedTech companies in Artificial Intelligence (AI) in healthcare to expand their business is likely to propel the growth of the market. According to the PwC, Artificial Intelligence (AI) is efficient, quick, and performs operational activities at much lower cost. Also, the AI assists medical professionals for early diagnosis and detection of any disease. This has led to a rise in investments by majority of healthcare providers working in the industry.
Increasing Complexities, Data Breaches, and High Costs to Restrict Market Growth
Though Artificial Intelligence (AI) has a lot of uses in healthcare, the adoption of AI in healthcare is limited. The reason for this is the complexities faced by healthcare providers. The incorporation of artificial intelligence may lead to inaccuracies and create a gap between the diagnosis and medicines prescribed to the patient. Another factor that hampers the Artificial Intelligence in healthcare market is data privacy issues. In many countries, there are certain regulations to protect patient health data. The violation of this regulation can lead to legal and financial penalties. Also, problems, such as unethical gathering of sensitive data, increase the risk of patient data safety. Thus, increasing concerns of patient safety and unethical collection of patient data are hampering the overall growth of the market.
Such factors are restraining the use of artificial intelligence technology by the healthcare providers and hampering the growth of the market.
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New Launches and Investments Made by Key Players are Contributing to the Growth of the Segment
Based on platform, the market is segmented into solutions and services.
The solutions segment accounted for the highest share and dominated the global market in 2021. Increase in investments by the key market players and introduction of new products are the major factors surging the demand for Artificial Intelligence in healthcare. Also, initiatives taken by governments to promote AI in healthcare facilities also lead to the adoption of AI-based tools and solutions.
The services segment is projected to grow comparatively at a lower CAGR during the forecast period. Services such as virtual nursing assistance help to continuously monitor the patients’ symptoms with physician feedback on demand, and are contributing to the growth of the segment. For instance, in October 2021, Sensely launched Virtual Primary Care (VPC) that has a virtual assistant, which is voice enabled and character based. This virtual assistance assists patients to connect with their healthcare team with the medium of their own choice
Advancements and Introduction of New Technologies Likely to Propel the Growth
On the basis of application, the Artificial Intelligence in healthcare market is segmented into robot-assisted surgery, virtual nursing assistant, administrative workflow assistance, clinical trials, preliminary diagnostics, and others.
The robot-assisted surgery segment held the highest market share and dominated the market in 2021 due to upsurge in technological advancements in the segment. For instance, in October 2021, Medtronic received approval for its Hugo RAS system in Europe. This new system is approved for performing urological and gynecological procedures.
Furthermore, the preliminary diagnostics segment is projected to grow at a considerable growth during the forecast period with substantial CAGR. The positive results of AI-based diagnostics tools led to an increase in demand for AI-based pathology tools. For instance, in October 2021, Olympus, one of the manufacturers of optical and digital life science solutions, announced the results of its AI-based pathology diagnostic tool. The results depicted that the tool can identify adenocarcinoma and non-adenocarcinoma tissue in gastric cancer patients. Such factors are contributing to the high growth of the segment.
Need to Manage Hospital & Clinics Administrative Workload in a Structured Manner to Drive Market Growth
On the basis of end-user, the Artificial Intelligence in healthcare market is segmented into hospitals & clinics, pharmaceutical & biotechnology companies, Contract Research Organization (CRO), and others.
The hospitals & clinics segment held the majority of the share and dominated the market in 2021. The increase in adoption of new technologies in these settings and the increase in collaborations of major players in the market are contributing to the growth of this segment.
The pharmaceutical & biotechnology companies segment is projected to grow at a substantial CAGR during the forecast period. Artificial Intelligence (AI) in healthcare not only helps in gene sequencing work but also predicts the drug efficacy and safety of pharmaceutical products. The growing number of collaborations of different players in the market is driving the growth of this segment. For example, in July 2020, Merck KGaA collaborated with Janssen Pharmaceuticals, N.V. to develop an AI diagnostic tool. This tool can help in improvisation of the detection of the Neglected Tropical Diseases (NTDs) schistosomiasis and Soil Transmitted Helminthiasis (STH).
North America Artificial Intelligence (AI) in Healthcare Market Size, 2021 (USD Billion)
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By region, this Artificial Intelligence in healthcare market is divided into North America, Europe, Asia Pacific, and Latin America.
The market in North America was valued at USD 4.72 billion in 2021 and is anticipated to continue to dominate the global market during the forecast period. Increase in adoption of new AI-based medical devices and the efforts shown by key players in the market to gain approval from the regulatory authorities is expected to drive market growth in the region. Also, the increase in the number of Machine Learning (ML) based clinical trials, which gives results with higher accuracy with reduced study period interval is likely to contribute to the growth of the market in the region.
Europe is anticipated to be the second-most dominant region in terms of Artificial Intelligence in healthcare market share. The market in Europe holds a significant share due to improvement in the drug discovery process that smoothens the administrative workflow, with efficient healthcare delivery to the patient. Also, the improved operations in the healthcare delivery system by using AI contributed to the growth of the market in the region.
The market in Asia Pacific is estimated to grow at the highest CAGR, especially in developing countries such as China, Japan, and India. The growing number of investments in AI-based medical devices for diagnosis of various diseases is likely to drive the growth of the market in the region during the forecast duration. For instance, in September 2021, CytoReason collaborated with Summit Pharmaceuticals (SPI) with an aim to enter into the Japanese market and make use of AI to develop a computational disease model.
Latin America and the Middle East & Africa accounted for a limited amount of market revenue during the forecast period. However, AI-based telehealth services and increasing collaborations of healthcare facilities in Latin America and the Middle East & Africa are expected to lead the future growth prospects of the market in the region.
Mergers and Acquisitions by Key Players to Propel Market Progress
The global market includes players, such as Amazon.com, Inc., Microsoft Corporation, NVIDIA Corporation, and Alphabet Inc., which held a significant share in 2021. Key market players are adopting strategies, such as mergers and acquisitions, launch of new products, and technological advancements, thereby strengthening their position in the global market.
Other market players with a significant presence in the global market include Hewlett Packard Enterprise Company, Intel Corporation, Siemens AG, and General Electric Company. These companies are expected to focus on new product launches and collaborations to increase their market share during the forecast period.
An Infographic Representation of Artificial Intelligence in Healthcare Market
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The Artificial Intelligence in healthcare market report provides detailed market analysis and focuses on key aspects such as an overview of the advanced technology, regulatory scenario for key countries, and challenges faced for the adoption and implementation of AI-based solutions. Additionally, it includes an overview of application of AI in hospitals and clinics, key industry developments such as mergers, partnerships, & acquisitions, the impact of COVID-19 on the market. In addition to the above mentioned factors, the report also includes the factors that have contributed to the growth of the market in recent years with regional analysis of different segments.
Value (USD billion)
By Platform, Application, End-user, and Region
Fortune Business Insights says that the global market size was USD 10.54 billion in 2021 and is projected to reach USD 164.10 billion by 2029.
In 2021, North America stood at USD 4.72 billion.
Registering a CAGR of 42.4%, the market will exhibit steady growth in the forecast period (2022-2029).
The platform segment is expected to lead the market during the forecast period.
Rising investment by private and government sectors in AI is driving the market.
Amazon.com, Inc., Microsoft Corporation, NVIDIA Corporation, and Alphabet Inc. are major players in the global market.
North America dominated the market in terms of share in 2021.
Advancement in medicine, research, innovation, and technology are the factors expected to drive the adoption of the products.
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