Latin America Digital Transformation - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

Key Highlights

• With the introduction of Industry 4.0 in the manufacturing sector, numerous factories are embracing digital technology to improve, automate, and upgrade the whole process. Industry 4.0 technology, such as robotization, is already commonplace in many enterprises. For example, in April 2023, Telit Cinterion, a global facilitator of the intelligent edge, announced the completion of a successful proof-of-concept trial of private 5G for factory automation. In partnership with Nestlé Brazil, the trial showcased why and how manufacturers increasingly make 5G a foundational component of their Industry 4.0 transformation strategies. Many manufacturers are considering or already implementing 5G, including private 5G networks, a global trend that will be worth USD 109 billion by 2030.
• As per IFR, the Brazilian automotive industry is the foremost adopter of industrial robots, with 47% of operational robots and 22% of new installations recently. This capability enables the automotive industry to maintain its position as one of the most significant users of robots and possess one of the most automated supply chains globally. Intelligent robots work alongside humans and can be trained by most production workers to execute the most common, time-consuming jobs and deliver them properly.
• Furthermore, the increasing use of IoT devices in companies is predicted to accelerate digital transformation in various industries. According to GSMA, the number of Internet of Things (IoT) connections in Latin America was expected to increase up to 1.2 billion by 2025. By that time, IoT was projected to generate over USD 47 billion in revenue in the region.
• As AI and deep learning applications expand in the region, from tech giants to small and medium-sized businesses, there has been a shortage of expert AI technicians. Without talent, these increased investments in artificial intelligence and machine learning could be wasted, leading to financial losses and unrealized opportunities.
• However, the adoption of cloud technologies in digital transformation presents challenges related to data storage and security. Organizations need to carefully assess cloud service providers, implement encryption techniques, and establish data access controls to protect sensitive information stored in the cloud. For instnace, in the 2024 General Counsel Report, which surveyed chief legal officers in Latin America and globally, 43% of respondents indicated that their data privacy risks had been impacted by remote and hybrid work setups.

Latin America Digital Transformation Market Trends

The IoT Segment is Expected to Occupy the Largest Market Share

• The growing adoption of IoT technology across end-user industries, such as manufacturing, automotive, and healthcare, is positively driving the market's growth. With the traditional manufacturing sector amid a digital transformation, IoT is fueling the next industrial revolution of intelligent connectivity. This is changing how industries approach increasingly complex processes of systems and machines to improve efficiency and reduce downtime.
• Industry 4.0 and IoT are central to new technological approaches for developing, producing, and managing the entire logistics chain, otherwise known as smart factory automation. Massive shifts in manufacturing due to Industry 4.0 and the acceptance of IoT require enterprises to adopt agile, smarter, and innovative ways to advance production with technologies that complement and augment human labor with robotics and reduce industrial accidents caused by process failure.
• With the high rate of adoption of connected devices and sensors and the enabling of M2M communication, there has been a surge in data points generated in the manufacturing industry. These data points can be of various kinds, ranging from a metric describing the time taken for the material to pass through one process cycle to a more advanced one, such as calculating the material stress capability in the automotive industry.
• The advancements in field devices, sensors, and robots are expected to expand the market scope further. IoT technologies are overcoming the labor shortage in the manufacturing sector. For more and more organizations, using Industry 4.0 technologies, like robotization, is part of day-to-day operations.
• The IoT demand trend in the Latin America is expected to shift toward the industrial space from consumer demand over the coming years, with sheer volume demand driven by various Industry 4.0 applications. A significant share of the demand is expected to drive the manufacturing industries, energy, business mobility, healthcare, and supply chain.
• Moreover, smart city initiatives are expected to spearhead IoT growth over the coming years. IoT devices and systems are expected to increase as part of transportation, utilities, and infrastructure. Government initiatives and drives in line with this are expected to boost the adoption rates. Additionally, focus on industrial automation and technological advancements fuel the demand for Industrial automation systems, driving the overall growth of the market in Latin America.
• For instance, according to the Master Certifications organization, the progress of industry digitalization has a direct impact on the economy. By deploying Internet of Things technologies, Brazil is expected to create more than USD 210 billion in revenues by 2030. By improving work environments and infrastructure and investing in technological dissemination programs, Brazil will be able to move to a higher economic level and lower equipment maintenance and energy consumption expenses while enhancing work productivity.
• Moreover, according to the Mexican government, Mexico is expected to be among the top 10 countries in the Economic Complexity Index, cementing its place as an innovator in Industry 4.0 by 2027. The major manufacturing factories in Mexico are expected to see continual growth. The involved governments have streamlined specific regulations, which have allowed businesses to establish operations in Mexico with little difficulty.

Brazil is Expected to be the Fastest Growing Market

• The region is experiencing growth in factory automation owing to Brazil's manufacturing economy, which gives rise to automation and is primed for inward industrial investment.
• The robust oil and gas ecosystem in Brazil is anticipated to be lucrative for the market’s growth. For instance, according to the Energy Information Administration (EIA), in 2022, Brazil was the largest crude oil-producing country in Latin America and the Caribbean, with an average output of over three million barrels per day.
• In Brazil, over 8,500 hybrid and electric vehicles are in circulation. According to the National Agency of Electric Energy (Aneel), the number of electric vehicles is expected to rise to 2 million by the year 2030.​ Brazil had an installed base of 4,000 industrial robots, and in that the automotive industry accounted for approximately half of the industrial robots sold in Brazil.
• The country is also expected to leverage the benefits of robotics both as a manufacturer and a user. According to IFR, robotics shipments in Brazil are expected to witness a CAGR of 33% between 2018 and 2020. ​
• For instance, in February 2023, ABB launched its latest ABB Ability Symphony Plus distributed control system (DCS) release to support digital transformation for power generation and water enterprises. With more than 40 years of experience in total plant automation, the latest version of Symphony Plus will further support customers' digital journey through a simplified and secure OPC UA1 connection to the Edge and Cloud without interfering with core control and automation functionalities.
• Manufacturers are increasingly seeking scalable solutions that simplify their machine control architectures, minimize the number of components, reduce manufacturing time, and optimize productivity. As the demand for factory automation and ICS increases significantly in the market, it has led key players to focus primarily on innovating and developing new products with innovations and technologies.
• For instance, in July 2023, Rockwell Automation, Inc., a prominent company dedicated to industrial automation and digital transformation, launched ArmorKinetix Distributed Servo Drives, an extension of the Kinetix 5700 platform and provides users with a scalable drive solution that helps them deliver leaner, greener, and more powerful machine designs. The smart servo drives also include vibration and thermal sensors that can detect potential machine issues, offering the ability to identify and address problems and increase system uptime proactively.

Latin America Digital Transformation Industry Overview

• May 2024: Aprecomm, an Indian Telco SaaS company, set its sights on expansion into the Latin American market. To bolster this move, Aprecomm partnered with OpenGlobe, a regional telecommunications solutions provider. The collaboration was strategically aimed at the Latin American market, which boasted over 111 million fixed broadband households. It leveraged OpenGlobe's strong ties with communication service providers and governmental entities, complemented by Aprecomm's specialization in elevating consumer experiences through self-healing and self-optimizing network solutions.
• April 2024 : Neura Robotics and OMRON Robotics and Safety Technologies Inc. announced a strategic partnership. Their goal was to transform the manufacturing landscape by integrating cognitive robots into factory automation. These robots harness AI to boost efficiency, flexibility, and safety.

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