Digital Transformation Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Digital Transformation Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Digital Transformation Market is expected to register at a CAGR of 17.42% during the forecast period of 2022-2027.

Key Highlights

• With the advent of industry 4.0 in the manufacturing industry, various plants adopt digital technologies to enhance, automate, and modernize the whole process. The integration of different digital transformation technologies, such as the internet of things (IoT), is significantly becoming prevalent, as it provides exceptional benefits. Also, Digital transformation helps organizations improve their brand's reputation, customer experience, and customer retention ratios through the implementation of the software. Digitally transformed organizations can adapt to the evolving technological landscape and tackle sudden shifts in the industry.
• The merging of Big Data with new technology has made processing large data sets more accessible than ever. From mining Big Data to predictive analytics, manufacturing organizations rely on these new, intelligent tools to help them succeed. The German Machinery and Plant Manufacturing Association indicates that, in 2020, big data-based business models are expected to contribute at least 7% more revenue to German manufacturing companies than they currently provide.
• Artificial Intelligence is poised to play a significant role over the forecast period among all the enabling technologies. AI is also used to increase safety by providing preventive maintenance, yet there have been growing incidences of accidents. In such a regard, intelligent cameras based on AI are being used to access the risk area and lessen the extent of potential damage.
• In addition, the Oil and Gas Authority (OGA) is making use of AI in similar ways, owing to the United Kingdom's first oil and gas National Data Repository (NDR). It uses AI to interpret data, which, according to the OGA anticipations, is likely to assist in discovering new oil and gas forecasts and permit more production from existing infrastructures.
• The COVID-19 pandemic has changed the way we live and work dramatically. Businesses were obliged to quickly adapt and handle new issues as countries worldwide imposed city lockdowns and tightened border restrictions to stay relevant. Customers' touchpoints had to move from offline to online, and companies had to create a remote work environment and modify their supply networks.
• According to a study by IBM in 2021, leaders reported COVID-19 might accelerate their digital transformation by 67%; also, they stated that the pandemic prompted them to 'Improve operational efficiency' as their greatest priority by 92%.

Key Market TrendsIndustrial Robotics Adoption is Expected to Grow Significantly

• Industry 4.0 has fueled new technologies, including collaborative robots, SCARA robots, single-axis, AI-enabled robots, and recently created exoskeletons, allowing enterprises to use robots to streamline various processes, boost productivity, and reduce errors.
• Increased workplace safety and improved production capabilities have further driven investing initiatives in robotic systems.
• The global sales volume of industrial robots has tripled in the last decade, peaking at approximately 422,000 units in 2018 before declining to around 384,000 units in 2020. The automotive and electronics sectors, which accounted for 23 and 31 percent of new installations in 2020, respectively, are driving the phenomenal growth in global sales of industrial robots. As a result, countries with vital automotive and electronics sectors, such as Japan, China, South Korea, Germany, and the United States, have a high prevalence of industrial robots. South Korea has approximately 930 robots per 10,000 manufacturing personnel, seven times the global average.
• The key market players have rolled out collaborative robots that enhance worker safety, like ABB's YuMi and KUKA's LBR iiwa. The plug-and-play collaborative robots have attracted massive traction, owing to their ease of use. Industrial robots are predominantly used for mass manufacturing and production-based assembly applications, followed by spot welding, among other manufacturing stages in the automotive, electronics, and other industries.
• The pharmaceutical industry has experienced some significant impacts over the past year. Since the COVID-19 global pandemic, the industry has had to rapidly alter its processes to respond to emerging and changing health situations. Thus, automation has been one of the significant ways that companies in this industry have been able to keep up with the required production and maintain social distancing guidelines. As a result of these changes, the health sciences and pharmaceutical industries are expected to have the fastest robotics growth in 2020. New robot orders have increased by 69% year on year.
• In 2020, the growth of AI-integrated robotics and other data-driven processes pushed robotics adoption, providing a broader use case for purchase. But initially, the COVID-19 pandemic hindered the progress and production of robots, which negatively affected the market in early 2020. The pandemic also halted automotive production and disrupted the supply chain. However, the market regained some traction when plants used robotics to fill the gap between socially distanced workers.

Asia Pacific is Expected to Hold a Significant Market Share

• The use of advanced technologies, such as cloud computing, AI, big data and analytics, mobility/social media, cybersecurity, IoT, among others, led to innovation and transformation, thereby stimulating growth in the business ecosystem of Asia Pacific. Digital technologies have transformed the legacy approach to business into a modern approach. Besides, the region is becoming a new hotspot in the digital transformation market due to rising investments in the process of digitalization across potential economies.
• Asia continues to be the most significant market for industrial robots globally. In 2020,71% of all newly deployed robots were installed in Asia (2019: 67%). With 168,400 units sold, China, the region's largest adopter, witnessed a 20 percent rise in installations. China's rapid robotization is reflected in this high growth rate.
• The digital transformation market is witnessing strong growth in the country owing to government initiatives, vendor investments, among others. In September 2021, the Japanese government launched the Digital Agency to drive Japan's digital transformation as part of the administrative reform agenda. The government's move pushed the digitalization of the public sector.
• The rising efforts by the governments for tying up with the major technology companies across the world for a digitalization push in the region. For instance, in February 2021, Cisco collaborated with the government of Japan on a digitization project which included various industry verticals, including government, education, healthcare, and business.
• In a global comparison of digital health revenue, China will generate the most significant income, USD44,678.66 million, in 2022.
• The Ministry of Science and ICT of South Korea, in July 2021, announced the launch of the Korean New Deal Comprehensive Plan to transition into a prominent economy by putting digital capabilities at the forefront of all industrial fields, helping advance digital innovation centered around artificial intelligence (AI) and data. The Digital New Deal is a strategic and preparatory investment toward the global digital economy by developing Korea's digital capabilities. Such deals, collaborations, and partnerships are expected to drive the growth of the market studied further.

Competitive Landscape

The Digital Transformation Market is moderately fragmented. The players have adopted various growth strategies such as partnerships, agreements, collaborations, new product launches, and product enhancements to expand their presence in the market further and broaden their customer base.

• April 2021 - Google Cloud and Siemens formed a new partnership to streamline production operations and boost shop floor efficiency. To help manufacturers innovate for the future, Siemens plans to combine Google Cloud's top data cloud and artificial intelligence/machine learning (AI/ML) capabilities with its industrial automation systems.
• April 2021 - Adobe announced the reinforcement of its partnership with Capgemini, which significantly grows Adobe's practice across the globe. This partnership enabled Adobe to leverage Capgemini's customer experience, data, analytics, and business strategy and design expertise to create more data-centric solutions and experiences for its clients.
• March 2021 - Cognex Corporation launched Cognex Edge Intelligence. This platform provides barcode reading performance monitoring and device management to help customers prevent downtime and boost the productivity of manufacturing and logistics operations. It also produces insight-rich data across manufacturing and logistics facilities that can identify performance issues and take corrective action faster.

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• The market estimate (ME) sheet in Excel format
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