Industrial Automation - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

Key Highlights

• Industrial automation may potentially and considerably increase export competitiveness in developing nations. By automating their manufacturing processes, these nations can create items more quickly, effectively, and affordably, which boosts their ability to compete in the global market. This may result in higher levels of exports, better foreign currency revenues, and an improvement in the emerging economy, hence driving the market for industrial automation in developing countries.
• Industrial automation significantly impacts small and medium-sized firms (SMEs) in developing nations. Automation may boost these companies' competitiveness and achieve sustained growth. It enables SMEs to improve productivity, streamline operations, and satisfy the needs of larger customers and supply chains. For instance, Industrial automation optimizes resources and reduces production times, freeing personnel for strategic tasks. According to the International Federation of Robotics (IFR), productivity increases by up to 30% in manufacturing with automation in multiple processes.
• According to the International Monetary Fund (IMF), growth rates for emerging markets and developing economies are projected to be 4.2% in 2024 and 2025 compared to 4.3% in 2023. In many developing countries such as India, several initiatives by the Government of India, like the scrappage policy, Automotive Mission Plan 2026, and production-linked incentive scheme in the Indian market, are expected to make India a significant player in the two-wheeler and four-wheeler market. Such policies include adopting automation technologies and fostering a favorable environment for the market studied.
• Automation equipment mandates high capital investment to fund smart manufacturing (an automated system may cost millions of dollars to install, design, and fabricate). The cost of purchasing the equipment, including robotic systems, conveyor belts, sensors, and control systems, can be substantial. The factory automation equipment also necessitates the customization and integration into existing production systems. This process involves designing, engineering, and programming the equipment to meet specific manufacturing requirements. This poses a significant hindrance to the growth of the market studied.
• Apart from the direct impact evident in the supply chains and production of industrial automation solutions, the aftereffects of the pandemic are also impacting the growth of the studied market. For instance, the ongoing threat of recession looming over various regions, including North America, may negatively influence the studied market's growth as the economic uncertainty will prevent consumers and businesses from spending more on high-value products such as automobiles and expansion projects, which may impact the growth of the market studied.

Industrial Automation Market Trends

Oil and Gas Industry to Witness Significant Growth

• The oil and gas industry has been a dominating segment in adopting industrial automation solutions. However, the growth prospects for industrial automation in this industry are limited compared to other developing industries, and therefore, the growth rate is expected to slow in this industry.
• Oil and gas automation, also known as oilfield automation, is a set of processes, many leveraging digital technologies, aimed at enhancing the competitiveness of energy producers in global markets. While certain sectors within the industry are more primed for automation, key areas include drilling, production operations, logistics, safety, and retail operations. Oil and gas automation predominantly relies on IoT-based sensors, predictive systems, and AI-driven expert systems to boost productivity and bridge skill gaps arising from labor shortages.
• The oil and gas industry's hazardous environments are increasingly being navigated through automation. Robots and automated systems handle tasks like drilling, inspection, and maintenance, significantly reducing human exposure to risks.
• The industry is bolstering safety with automated features like emergency shutdown systems, guaranteeing swift responses to difficult situations. By deploying sensors and automated tools, companies are ensuring compliance with regulations and curbing their environmental footprint.
• The oil and gas industry is a vital component of the global economy. As per IEA, global production of liquid fuels will increase by more than 0.8 million b/d in 2024, slowing from the 1.8 million b/d increase in 2023, as OPEC+ voluntary production cuts are offset by supply growth outside of OPEC+. Although OPEC+ crude oil production in 2024 decreases by 0.9 million b/d compared with last year, forecast production outside of OPEC+ increased by 1.8 million b/d, led by the United States, Guyana, Brazil, and Canada. With significant surge in oil production and surging digitization, oil and gas companies have increasingly relied on digital technology and automation.

Asia-Pacific is Expected to Register the Fastest Growth

• Asia-Pacific is home to some of the world's largest manufacturing economies, including China, Japan, South Korea, and Taiwan. The ongoing expansion of manufacturing industries in automotive, electronics, aerospace, and medical devices creates a significant demand for industrial automation.
• Initiatives by emerging countries like India to expand their manufacturing footprint and become self-reliant further propel the market growth. Manufacturing emerged as one of the high-growth sectors in India. The 'Make in India' program places India on the global map as a manufacturing hub and globally recognizes the Indian economy. According to IBEF, India can export goods worth USD 1 trillion by 2030 and is on the road to becoming a significant global manufacturing hub.
• The government of India aims for a USD 5 trillion economy by 2025, of which manufacturing would be worth USD 1 trillion. The convergence of flagship programs, such as Make in India with Skill India and Digital India, would be vital to achieving this goal, thereby driving the region's market growth.
• The ongoing initiatives to build a battery manufacturing plant for faster adoption of electric vehicles are further driving the market growth. For instance, in August 2023, Recharge Industries announced its plans to build a factory with an annual capacity of 30 gigawatt-hours to supply batteries for roughly 300,000 EVs. Construction is expected to begin around May 2024, with production slated to start in 2025.
• The region is the biggest semiconductor and electronics product manufacturer due to the presence of companies like Taiwan Semiconductor Manufacturing Company. Taiwan produces over 60% of the world's semiconductors and over 90% of the most advanced ones. Most of the semiconductors are manufactured by TSMC.

Industrial Automation Industry Overview

• June 2024 - Rockwell Automation announced a partnership with NVIDIA to expedite the development of safer and smarter industrial AI mobile robots. The collaboration is anticipated to drive the use of AI in autonomous mobile robots (AMRs), improving their performance and efficiency.
• February 2024 - Schneider Electric, in partnership with tech giants Intel and Red Hat, unveiled a new software framework, the Distributed Control Node (DCN). Building upon Schneider Electric's EcoStruxure Automation Expert, this innovative framework empowers industrial firms to transition to a software-defined, plug-and-play model. This shift boosts operational efficiency and quality and streamlines processes, ultimately leading to cost savings.

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