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The global software for smart manufacturing market size was valued at USD 110.62 billion in 2023. The market is projected to grow from USD 123.78 billion in 2024 to USD 358.85 billion by 2032, exhibiting a CAGR of 14.2% during the forecast period.
Smart manufacturing is a modern production process that is interconnected, data-rich, and automated. It involves the collaboration of machines, big data, and people within an integrated and digitally connected system. This system collects and analyzes data to understand, make predictions, and derive insights. Smart manufacturing incorporates advanced technologies, such as cybersecurity, AI, blockchain, Industrial Internet of Things (IIoT), and robotics. These Industry 4.0 technologies optimize the manufacturing ecosystem and enhance overall performance.
The software market around the world is thriving and growing steadily. All the countries have been embracing digital transformation and adopting numerous software solutions across industries to improve productivity, streamline operations, and enhance customer experiences. Some of the key factors contributing to the market include supportive government policies, cloud penetration, increasing digitalization, e-commerce & online activities, and rise of emerging technologies.
The COVID-19 pandemic created remote workforces and supported scalable infrastructure for the companies’ products and service offerings. As a result, cloud-based software is expected to gain traction over the forecast period. This trend is likely to persist as the migration to virtual work emphasizes the need for reliable, secure, scalable, and off-premises technologies.
Ability of Generative AI to Speed up Automation Process in Manufacturing to Augment Market Growth
The emergence of generative AI offers significant growth opportunities for software for smart manufacturing providers worldwide. This technology enables them to deliver more personalized, efficient, and human-like interactions. Machine learning is rapidly revolutionizing product manufacturing across various industries as manufacturers are harnessing the capabilities of Artificial Intelligence (AI) to complete tasks faster and more accurately than humans. Generative AI is reshaping smart manufacturing technologies by emphasizing the crucial role of open source software and communities in optimizing production lines, reducing waste, and enhancing supply chain logistics.
Rising Penetration of Internet of Things, 5G Network, and Big Data to Supplement Market Growth
Big data is an important emerging trend for the growth of smart manufacturing. The increasing volume of structured and unstructured data is creating a huge demand for big data applications. Additionally, the integration of IoT and 5G technologies represents a significant milestone in the advancement of smart manufacturing. Moreover, 5G, known for its low latency, widespread device connectivity, and high speed, is critical for real-time data processing and transmission. This capability is vital in manufacturing settings where instant decisions and actions majorly impact production efficiency and safety.
IoT, on the other hand, uses a network of interconnected devices, each with the capabilities to transmit, receive, and collect data. This means that every machine, device, and sensor is a source of critical data in the context of manufacturing. Once analyzed and applied, this data can help enable predictive maintenance, enhance quality control, and optimize production processes.
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Surging Demand for Software Systems that Reduce Time and Cost to Aid Market Growth
Manufacturers are greatly impacted by production waste and unplanned downtime. As a result, they are seeking systems that can identify potential defects and failures in advance to prevent future losses. Technologies, such as industrial 3D, digital twin, and Plant Asset Management (PAM) are being utilized to reduce the time and cost associated with manufacturing.
Furthermore, software solutions provide the foundation for implementing advanced technologies, such as Artificial Intelligence (AI), machine learning, and data analytics. As per industry experts, 80% of smart manufacturing software users practice green manufacturing to eliminate paper from their manufacturing processes. These factors are contributing toward the global software for smart manufacturing market growth.
High Initial Investment in Smart Manufacturing Solutions to Impede Market Growth
The primary factor hindering the growth of the global market for software for smart manufacturing is the high initial capital investments. Research indicates that cost is the major obstacle, followed by lack of knowledge about which technology to invest in. The outbreak of the pandemic exacerbated this issue as many businesses experienced decrease in capital expenditure and other losses. Therefore, high initial capital investments are likely to restrict the market's growth. Also, implementing Industry 4.0 and smart investments can be costly, requiring significant upfront expenditure on technology, training, recruitment, and infrastructure.
Industrial 3D Printing/Modelling to Experience Fastest Growth driven by the Rising Demand for IoT in Advanced Automation Processes
Based on application, the market is segmented into digital twin, Enterprise Resource Planning (ERP), quality management, supply chain planning, asset performance management, MES automation and orchestration, maintenance/preventive/predictive management, 3D printing/modelling, product lifecycle management, and others.
The 3D printing/modelling application segment is estimated to register the highest CAGR over the forecast period. The growth of the segment is driven by the rising demand for IoT in advanced automation processes in the manufacturing sector. The manufacturing sector will be the primary source of demand for 3D printing and modeling, followed by the electronics and automotive industries. Moreover, the discrete automation industry utilizes 3D printing and modeling for self-optimization of production lines and customized product solutions.
In 2023, the Enterprise Resource Planning (ERP) application had the largest market share of 17.7%. Embracing Industry 4.0, ERP brings transformative improvements across the manufacturing process, revolutionizing material procurement, supply chain management, production, and maintenance. By integrating ERP systems with emerging technologies such as AI and Internet of Things (IoT) manufacturers are able to further optimize their productivity by creating more intelligent operations.
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Large Enterprises Adopted Software for Smart Manufacturing to Streamline Processes
By enterprise type, the market has been classified into large enterprises and small and mid-sized enterprises (SMEs).
The large enterprises segment held the largest market share in 2023. Smart manufacturing is helping large enterprises succeed in many ways. It includes reduced material losses, increased production capacity, improved lead times, and enhanced employee satisfaction. Examples of intelligent factories include on-demand manufacturing and virtual inventories.
Furthermore, the SMEs segment is projected to showcase the highest CAGR over the forecast period. The need for higher production, quality, and sustainability serves as a significant motivation for small and medium-sized enterprises (SMEs). With more businesses, including those in the automotive, aerospace, and electronics industries, adopting smart manufacturing solutions to stay competitive in a rapidly changing global market.
Surging Implementation of Cloud-based Solutions to Aid Demand for Cloud Deployment
By deployment, the market has been classified into cloud and on-premises. In 2023, the cloud deployment segment held the leading position in the market and is anticipated to observe the highest growth rate over the estimated timeframe. The segment’s growth is anticipated to the increasing importance of cloud-based services and technologies and services in businesses worldwide. Currently, cloud solutions are serving as a critical enabler, transforming manufacturing processes into highly efficient and well-optimized operations. Industry experts suggest that investing in the cloud can be a game-changer for businesses. Studies have shown that 60% of businesses investing in the cloud outperform their competition in supply chain transformations. Additionally, over half (53%) of them credit the cloud for their improved resiliency and sustainability.
In 2023, the on-premises segment accounted for a decent market share owing to the flexibility it offers to customers as transactions are only done once. Its costs are relatively lower compared to cloud expenditures. To have complete control over data, organizations can deploy on premises-software for smart manufacturing, which can help to mitigate or reduce unauthorized access and data breaches.
Smart Manufacturing Software Capabilities in Process Industries to Achieve Digital Stability is Likely to Propel Market Growth
Based on industry, the global market is categorized into process industry (oil & gas, power & energy, chemicals, pharmaceuticals, food & beverages, metal & mining, and others) and discrete industry (automotive, electronics and manufacturing, industrial manufacturing, aerospace and defense, and others). The process industry segment accounted for the largest market share in 2023. In the domain of process industry manufacturing, many large companies in oil refining, pharmaceuticals, metals, and bulk chemicals have achieved various levels of digital maturity. They benefited from being early adopters of technologies, such as MES and advanced process control solutions.
The discrete industry segment is expected to experience the highest growth rate over the forecast timeframe, spearheaded by the aerospace & defense sector. Smart factories involved in discrete manufacturing utilize machine vision, AI, real-time data analytics, and advanced robotics to enhance various processes, including parts inventories, labor scheduling, quality assurance, and testing. The aerospace & defense industry is leveraging advanced technologies to make production smarter and more effective.
Geographically, the market is studied across North America, South America, Europe, the Middle East & Africa, and Asia Pacific.
North America Software for Smart Manufacturing Market Size, 2023 (USD Billion)
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North America held the highest share of the market in 2023. The region is a well-established hub for industrial automation due to the adoption of advanced technologies and innovative manufacturing methods. Additionally, a favorable business climate in the U.S., along with substantial support packages for manufacturing and infrastructure, the presence of major tech companies, and government initiatives, such as tax code reforms will further speed up the adoption of software for smart manufacturing in the region.
Asia Pacific is expected to experience the highest CAGR in the global market. According to the State of Smart Manufacturing Report by Plex Systems (a Rockwell Automation company), there was a 50% global acceleration in smart manufacturing adoption in 2021. These new technologies are effectively addressing serious industry challenges. In Asia Pacific, 93% of organizations consider smart manufacturing extremely important for future success, compared to 84% in North America, and 75% in Europe, the Middle East, and Africa (EMEA). The implementation of cloud-based software for smart manufacturing has become crucial for companies across the region to remain competitive and thrive. Hence, to address and improve real business outcomes, companies in the region are placing significant value on these technologies.
Moreover, Europe’s software for smart manufacturing market share is being driven by the expansion of industry 4.0 and IoT. The regional market is expected to experience healthy growth due to the increasing use of omnichannel methods. Increasing adoption of smart manufacturing, especially in the German automotive industry, is driving the growth of Europe’s market. The automotive industry is the backbone of the German economy and the country has the largest concentration of OEM factories in Europe. Currently, about 30% of these factories can be described as smart.
The Middle East & Africa are witnessing a rise in the use of software for smart manufacturing. Manufacturing is gaining importance in the Middle East, particularly in the UAE and Saudi Arabia, where governments have recognized it as a crucial sector for development. In the UAE, national initiatives, such as the government’s “Operation 300bn” strategy intends to boost the industrial sector’s contribution to the country’s Gross Domestic Product (GDP) to USD 81.7 billion by 2031. Additionally, countries in South America, including Brazil, Argentina, and Chile, are working on new AI rules and strategic plans to enhance the utilization of cutting-edge technologies.
Key Players to Leverage Strategic Collaborative Initiatives to Increase Profitability
The global market is competitive, and includes various SMEs and large businesses, such as Autodesk, Siemens, Rockwell Automation, and Aegis Software, among others. Agreements, acquisitions, mergers, and contracts are some the key strategies used by these companies. In addition, organizations have a keen focus on deployment of cutting-edge technologies in software for smart manufacturing applications.
The research report includes prominent regions across the globe to get a better knowledge of the industry. Furthermore, it provides insights into the most recent industry trends and an analysis of technologies that are being adopted quickly on a global scale. It also emphasizes on the market’s drivers and restrictions, allowing the reader to obtain a thorough understanding of the industry.
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ATTRIBUTE | DETAILS |
Study Period | 2019–2032 |
Base Year | 2023 |
Estimated Year | 2024 |
Forecast Period | 2024–2032 |
Historical Period | 2019–2022 |
Growth Rate | CAGR of 14.2% from 2024 to 2032 |
Unit | Value (USD billion) |
Segmentation | By Application
By Enterprise Type
By Deployment
By Industry
By Region
|
Fortune Business Insights says that the market was valued at USD 110.62 billion in 2023.
Fortune Business Insights says that the market is expected to reach a valuation of USD 358.85 billion by 2032.
The market is projected to record a CAGR of 14.2% during the forecast period of 2024-2032.
By application, the 3D printing/modelling segment dominated the market share in 2023.
Surging demand for software systems that reduce time and cost will aid the market growth.
Autodesk Inc., ABB, SAP SE, AVEVA (Schneider Electric), and Rockwell Automation, among others, are the top players in the market.
Asia Pacific is expected to record the highest CAGR.
The discrete industry is likely to register the highest CAGR during the forecast period.
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