BCC Research report forecasts the segment will reach $112 billion by 2020.
WELLESLEY, Ma. — Canadian companies take note: it’s time to get smart about manufacturing – your global competitors will be plugging into connected devices in a big way over the next five years.
Smart manufacturing is a young market with significant revenue opportunity, reports BCC Research. Global double-digit growth for connected devices is anticipated over the next five years.
The market research firm based in Wellesley, Ma. says the network of machines containing embedded technology that allows them to communicate with each other is based primarily on the recent growth of the Internet of Things (IoT).
The global market should reach $392 billion by 2020, up from $159 billion in 2015, reflecting a five-year compound annual growth rate (CAGR) of 19.8%.
In North America, the smart manufacturing segment should reach $112 billion by 2020, up from $47 billion in 2015, with a five-year CAGR of 19%. The Asia-Pacific region will grow from $59 billion in 2015 to $151 billion in 2020.
In Western Europe and the Asia-Pacific region, government mandates coupled with a greater eco-consciousness are driving investments in the IoT, while improving efficiencies in manufacturing is also a strong incentive in the Asia-Pacific region.
Global investments in smart manufacturing are expected to grow at an average five-year CAGR of 20% to reach $392 billion in 2020, with the Asia-Pacific region representing about 38%.
Initially, the market was more supply-driven, but businesses and the ecosystem are largely expected to benefit from the IoT.
BCC Research notes one of the earliest applications has been in energy optimization to adjust generation and energy-distribution flows for peak times and downtimes. IoT investments also are projected to yield advantages in retaining and attracting new customers through better customer service and support.
The report cites high tech and aerospace as seeing the strongest growth in smart manufacturing through 2020. Adoption levels will differ, but should be stronger overall in discrete manufacturing where smart manufacturing is expected to ultimately lead to mass-customization.
Network and semiconductor manufacturers foresee over 50 billion connected devices by 2020, with potentially half of those used for manufacturing.