The Rise of Smart Manufacturing in the Global Market

Smart manufacturing is a sub-industry of manufacturing which employs computer-integration to meet the real time demands and changes in either the manufacturing company, the supply network or customer needs. Smart manufacturing typically incorporates systems such as artificial intelligence (AI), machine learning (ML), automation and dynamic modelling, such as simulations. The goal for this computational incorporation is to ultimately allow for fast changes in manufacturing production based upon customer demand, optimisation of supply chain, or the identification of defective systems to maximise efficacy and production.

With the increased application of AI, ML and automation across many industries, the rapid acceleration of smart manufacturing has become visible in recent years. The global smart manufacturing market generated over $214.7bn in 2020 alone and is predicted to reach over $384.8bm by 2025, growing at a CAGR of 12.4% from 2020 to 2025. Within this global market, IoT (Internet of Things) is predicted to hold the largest market share, in addition to increasing integration of automotive, pharmaceuticals, chemical and aerospace. Smart manufacturing enables industry-specific technology to advance and drive manufacturing innovation, through various new devices and technologies that are appearing in the market. These include the incorporation of industrial robotics, automated control systems, GPS and GNSS systems, guidance steering and networking technology, amongst many others.

The Asia Pacific region currently accounts for the largest market share for smart manufacturing, which held 36% of the market in 2020, and is projected to generate $43.3bn by the year 2026. In East Asia, Japan appears to be the fastest growing region in smart manufacturing and is predicted to grow at 6.2% by 2026. North America is second after the Asia Pacific region, which was estimated at over $28.2bn in 2021 so far. The North American market growth in particular is specifically influenced by the penetration of smart supply chain and manufacturing technologies across several different industries. Within Europe, the smart manufacturing industry generated over $41.8bn in 2019, and is predicted to grow by 7.8% By 2026, largely due to an increased demand for industrial automation and robotics in recent years. Within Europe, Germany holds the top market position, predicted to grow at 7.8% CAGR in the next five years.

Smart manufacturing in undoubtably a rapidly increasing sub-category across many different industries. With the increased utilisation of technology such as AI, ML, robotics and automation across Europe, this third largest global market provides a lucrative industry for emerging technologies and companies to enter and drive innovation through.

Written by:
Anna Cranston

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