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The global industrial automation market size was valued at USD 168.81 billion in 2019 and is projected to reach USD 326.14 billion by 2027, exhibiting a CAGR of 8.9% during the forecast period.
Increasing adoption of Industry 4.0 and the advent of 5G wireless technology is propelling the demand for automation across several industries. Wherein, Digital Twin, Augmented Reality (AR), and expansion of Industrial IoT are observed to be significant trends prevailing in the global market. At present, manufacturing is one of the worst-hit industries due to COVID-19 pandemic. The purchasing manager index (PMI), a survey-based index that provides insights into the manufacturing activity, depicts a decline for the industry post-COVID-19 pandemic. For instance, China had 52% PMI, which reduced to 35.7 % in February 2020. This shows that the market is likely to demonstrate a moderate growth for short-term during the pandemic.
Market Players Taking Active Initiative to Mitigate the Impact of Pandemic COVID-19 on Businesses
The manufacturing industry has been hit hard due to the closure of plants and factories as well as mandatory lockdown imposed by the government globally. Large industrial organizations that remain as the potential customers of automation technology have dropped the capital expenditures to counter the downturn in material and consumer demand during the lockdown. The performance of global automation suppliers and the progress of automation depends upon the seamless functioning of the global manufacturing sector.
Market key players are taking the active initiative to mitigate the impact of pandemic COVID-19 on businesses. For instance, Siemens has made available it's Additive Manufacturing (AM) Network incorporated with its 3D printers to design and manufacture medical components. Similarly, Rockwell Automation, with its Independent Cart Technology (ICT), is helping the healthcare industry to manufacture critical medical equipment.
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Increasing Implementation of Digital Twins and AR Technology in Manufacturing to Favor the Market Growth
Simulation has become a pervasive factor throughout the product lifecycle. Hence, there is a need for simulation in the product design processes to optimize manufacturing by leveraging advanced technologies such as digital twin and 3D printing. Increasing implementation of digital twin and augmented reality technology is likely to be a prevailing industrial automation trend.
Adoption of innovative technologies such as virtual reality and augmented reality adds more value to the business and operational performance. Today, several manufacturers leverage augmented reality technology to upskill their workforce to handle digitalized operations. Market players integrate these technologies with their manufacturing tools. For instance, in June 2020, Emerson integrated augmented reality (AR) technology to its asset performance platform, Plantweb optics. Through this integration, the company aims to deliver real-time analytics & diagnostics, and provide live remote support to industrial plant workers.
Expansion of Industrial IoT is Set to Drive the Global Market
The confluence of big data, high speed and low latency internet speeds, the Internet of Things (IoT), Artificial Intelligence (AI), and data analytics have fundamentally altered the Industrial IoT ecosystem. By deploying industrial IoT solutions, manufacturers can increase productivity by streamlining and automating the manufacturing process.
Industrial Internet of Things (IIoT) overlaying with cloud computing, artificial intelligence, and advanced data analytics, enables the factory owners to interpret data and monitor from production lines in real-time to manage infrastructure and mitigate risks. These factors contribute to the fact that the expansion of Industrial IoT is likely to drive the market in the coming years.
Fourth Industrial Revolution to Embrace the Partnerships and Collaborations in the Global Market
The fourth industrial revolution, often called Industry 4.0, has transformed the digital supply chain across the industries. With technology evolving at a rapid pace, market players intend to partner with techno-savvy companies to develop new solutions build upon already-proven technologies. For instance, in February 2020, Honeywell International, Inc. and Tech Mahindra Limited collaborated to build ‘Factories of the Future’ by leveraging digital technologies.
With such collaborations, companies are emphasizing on capitalizing industry 4.0, 5G, and digital transformation & software capabilities to enable the manufacturers expedite their progress and leverage the potential of industry 4.0 technologies and solutions. Such partnerships and collaborations are likely to expand this market size in the coming years.
Fifth Generation Wireless Technology to Pave Way for Digital Transformation of Industries
5G wireless technologies, in industrial environments, facilitate the capabilities to control multi-machines by one central resource, instead of single control operating approach, by optimizing the cost of managing and maintaining operation technology and IT systems. By embracing and enabling partnerships over 5G technology new digital market opportunities could be realized in the near future. In January 2020, ABB Ltd. partnered with Ericsson and Swisscom AG to implement the real-time communication competences of 5G. Through this partnership, ABB intends to seize the potential of 5G for industrial manufacturing.
High Initial Capital Investments to Impede the Market Growth
Though the industrial automation processes are extremely cost-effective, the initial capital investments are high. The return on investments (ROI) cannot be predicted owing to the fragmented nature of the industry. This makes the small scale manufacturers reluctant to adopt automation solutions. However, proactive government initiatives such as the Government of India MSME business loan scheme, a working capital loan, are likely to overcome this restraint.
Increasing Demand to Streamline the Business Process Driving the Adoption of Industrial Automation Software
The market is classified into hardware and software based on the component. Automation software includes manufacturing operations management (MOM) software, human-machine interface (HMI), and supervisory control and data acquisition (SCADA), among others. The software enables businesses to streamline the manufacturing process. The hardware segment is estimated to showcase a growing demand during the forecast period.
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Developments in Technology to Traction Innovations in Industrial Robots
The hardware segment is further categorized into sensors, the programmable logic controller (PLC), human-machine interface (HMI), servo, laser markers, safety light curtain, and robots. Servo is expected to hold a major Industrial Automation market share, followed by sensors within the hardware segment. The robots are projected to show a remarkable growth rate. With the advancements in technology, market players are introducing advanced robots for automation purposes. For instance, in May 2020, Mitsubishi Electric Corporation launched Melfa Assista, a series of robots that collaboratively works with humans.
Inductive Sensors to Account for Major Market Share
Sensors are further sub-segmented into photoelectric, laser, inductive, and others. Weld field immunity, a large degree of mounting flexibility, and robust metallic detection capabilities are some of the factors that contribute to the major share of inductive sensors. The photoelectric sensor is estimated to exhibit notable growth, owing to its capabilities such as detecting a change in surface condition and detecting objects through several optical properties. Omron Corporation provides a comprehensive range of photoelectric sensors including retro-reflective, diffuse-reflective, among others.
Intricate Position Control to Surge the Need for Servo Motors and Drives
The servo segment is classified into motor and drive. Servo motors and drives are the essential components of the machinery that requires intricate position control such as camera focus, conveyor belt, and robotics automation. Servo drives are expected to hold the highest market share. Schneider Electric offers a comprehensive range of servo drives including Lexium XX series servo drives, and Unilink servo drives, among others. Similarly, Rockwell Automation, Inc. offers a broad range of servo motors including Kinetix VP-Series, HPK-Series motors, and TL-Series.
DC Motors to be Preferred Solution for Industrial Applications
Based on the motor type the servo motor segment is further categorized into AC motor and DC motor. DC motors are specifically used in the applications that are designed to move heavy loads in industrial automation applications. These include material handling equipment or conveyor belt as they offer a high starting torque. However, AC motors are likely to witness significant adoption attributed to low maintenance and reduced costs.
Discrete Automation to Drive the Demand for Automation Solutions
By Industry, the market is divided into discrete automation and process automation. The discrete automation industry is forecast to hold a major market share. The discrete automation industry is further segmented into automotive, electronics, heavy manufacturing, packaging, and others. Automotive, electronics and heavy manufacturing industries are likely to drive the demand for automation solutions.
The process automation industry is sub-categorized into oil & gas, chemicals, pulp & paper, mining and metals, healthcare, and others. The mining and metals industry is estimated to hold major market share followed by oil & gas, chemicals, and healthcare.
Europe Industrial Automation Market Size, 2019 (USD Billion)
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Europe to Dominate the Global Market Attributed to Highest Robot Density Globally
Geographically the market is analyzed across five major regions including North America, Europe, Asia Pacific, the Middle East and Africa, and Latin America. These regions are further categorized into countries.
Europe is expected to hold a major share in this market of Industrial Automation. According to the International Federation of Robotics (IFR) March 2020, Europe is the region with the maximum robot density worldwide with an average value of 114 units per 10,000 employees. These are some of the factors that contribute to the major share of the region.
The Asia Pacific is expected to exhibit a significant growth rate during 2020-2027. Countries in the region such as China manufacture most of the microchips, sensors, and other components that are the fabric of the internet of things systems. As per Axa S.A., a French multinational insurance firm, it is likely to be 200 billion connected devices and IoT components manufactured globally out of which 95% is more likely to be manufactured in China.
However, owing to the current economic downturn due to pandemic COVID-19, international business investments are likely to remain tepid. Reigniting trade wars between potential economies such as the United States, India, and China among others are likely to hamper the market growth.
According to the 2019 Singapore Government Trade Figures, the United States holds nearly 20% of Singapore's market share for automation equipment. Micro-electromechanical system (MEMS), precision sensors/instrumentation, Internet of Things (IoT), smart manufacturing, and 3D printing form the industrial automation technology and are vital factors of Singapore's long-term economic progress. These factors are expected to fuel the market growth.
Advanced production capabilities and efficient trading practices of manufacturers support the Industrial Automation market growth in North America. The Middle East and Africa is anticipated to have a notable growth in the coming years. Latin America is estimated to represent a steady market growth.
Market Players are Developing Innovative Applications for Robotics and Automation Solutions Driven by Significant Investments
The key market players including ABB Ltd, Rockwell Automation, and Honeywell International, among others are developing innovative applications for robotics and automation solutions to achieve new growth potential. For instance, ABB Ltd. approximately invests 5% in research and development to drive the expansion of its product portfolio with a focus on digital factory automation, machine-centric robotics, collaborative robotics, and artificial intelligence.
Similarly, in June 2018, Rockwell Automation and PTC entered into a strategic partnership. In this partnership, Rockwell Automation made an equity investment of USD 1 billion in PTC. Through this partnership the companies aimed to align PTC’s Thingworx Internet of Things (IoT), Vuforia augmented reality (AR), and Kepware industrial connectivity with Rockwell’s FactoryTalk Analytics, FactoryTalk MES, and other automation platforms.
The industrial automation market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced market over recent years.
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Value (USD Billion)
As per our study, the global industrial automation market held a revenue of US$ 157.04 Bn in 2018 and it is anticipated to grow at a CAGR of 8.4% during the forecast period (2019 -2026). Industrial automation is defined as the automated control systems that includes computers, mechatronics robots, and information technologies software and are backed up by advanced technologies such as machine learning, cloud, robotics, and among others
The discrete industry is expected to be the leading segment in industrial automation market during the forecast period. The demand for industrial automation products in discrete automation will be mostly driven from automotive, heavy manufacturing, and electronics, industry to ease the manufacturing process.
Rising adoption of integrated solutions in IIoT industrial applications, and advancement of industrial technologies namely industrial 4.0, artificial intelligence (AI) and others, will help to drive the growth of the industrial automation market.
ABB Ltd., Emerson Electric Company, GE Company, Honeywell International Incorporation, Mitsubishi Electric Factory Automation, Schneider Electric SE, Siemens AG, Yokogawa Electric Corporation and Omron Corporation are the key players in industrial automation market.
Rising adoption and integration of core technologies such as Industry 4.0, Industrial internet of things (IIoT), and advanced Cloud computing in factories applications are the trends of industrial automation market
The industrial automation market is estimated to reach US$ 296.70 Bn by the end of 2026.
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