Summary

The global digital transformation market was valued at USD 998.99 billion in 2020 and is expected to reach a value of USD 2744.68 billion by 2026, at a CAGR of 18.5% during the forecast period of 2021-2026.

The COVID-19 outbreak and the lockdown restriction imposed across the globe have affected capital investments and industrial activities across the world. Following the global economic recession led by COVID-19, the global digital transformation market has witnessed mixed impact in the 1st quarter of 2020. Most enterprises operating in the end-user industries (majorly manufacturing, automotive) had shuttered down their production sites due to lockdown restrictions. However, amidst the COVID-19 pandemic, the reliance on digital solutions has greatly increased and is anticipated to witness no retreat even in the post-pandemic era.

- With the advent of industry 4.0 in the manufacturing industry, various plants are adopting digital technologies to enhance, automate, and modernize the whole process. The integration of different digital transformation technologies, such as the internet of things (IoT), are significantly becoming prevalent, as it provides exceptional benefits. Also, Digital transformation helps organizations in improving 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 can tackle sudden shifts in the industry.
- The merging of Big Data with new technology has made processing large data sets easier than ever, and from mining Big Data to predictive analytics, manufacturing organizations are increasingly relying 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 that they currently provide.
- Among all the enabling technologies, Artificial Intelligence is poised to play a significant role over the forecast period. AI is also used to increase safety by providing preventive maintenance, yet there have been growing incidences of accidents. In such 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 parallel ways, owing to the United Kingdom’s first oil and gas National Data Repository (NDR), launched in March 2019. 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.

Key Market Trends

Industrial Robotics Adoption is Expected to Grow Significantly

- Industry 4.0, the newest industrial revolution, has fueled new technologies, like collaborative robots, SCARA robots, single-axis, AI-enabled robots, and the newly developed exoskeletons, which have enabled industries to use robots to streamline many processes, increase efficiency, and eliminate errors. Increased workplace safety and improved production capabilities have further driven industries to invest in robotic systems.
- Expeditiously changing market demands and the dynamic development of information technologies is significantly contributing to digital transformation. Currently, industrial robots play a crucial role in industrial automation, as robots manage many core operations in industries. With increased demand across economies, product manufacturers are adopting robots to automate repetitive processes. The automotive sector's growth largely drives the tremendous growth in the deployment of industrial robotics.
- The key market players in the market 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 huge traction in recent times, owing to the ease-of-use. Industrial robots are predominantly used for mass manufacturing and production-based assembly applications, followed by spot welding, among other stages of manufacturing in the automotive, electronics, and other industries.
- The pharmaceutical industry has experienced some significant impacts over the past year. Since the outbreak of COVID-19 global pandemic, the industry had to rapidly alter its processes to respond to the emerging and changing health situations. Thus, automation has been one of the major 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 life sciences and pharmaceutical industry has seen the highest growth in robotics in the past year. There has been a 69% year-on-year growth in new robot orders.
- In 2020, a rising theme in global manufacturing was the concept of the factory of the future or a fully connected factory. The growth of AI-integrated robotics and other data-driven processes will push 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. COVID-19 also halted automotive production and disrupted the supply chain. However, the market regained some traction when robotics was being used in plants to fill the gap between socially distanced workers.

North America 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 North America. 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.
- The United States, for instance, is expected to dominate the Industry 4.0 market globally, as the companies in the country are rapidly adopting the concept of smart manufacturing. Industry 4.0 technologies provide improved operational efficiency, enhanced productivity, optimization of costs, and reduction in downtime. Most of the factories in the country are already equipped with modern machines and smart factory technology, enabling the other companies to switch over to smart manufacturing compared to traditional manufacturing firms.
- Robotic Process Automation is considered as one of the digital transformation technologies supporting companies in robotizing repeatable and routine tasks in the United States. Industrial robots are increasingly used in the automotive sector, as well as the metal manufacturing and materials handling industries in the region. According to IFR, the industrial robot shipments in the Americas reached around 48,000 units in 2019, as against 46,000 units in 2017, the market is expected to get momentum during the forecast period.
- Due to the COVID-19 pandemic, robots are projected to play a major role in bringing jobs back to the United States, improving factory productivity, and helping manufacturers adapt to the changing preferences of the consumer. As the robots cost the same to the Chinese and American companies, they are expected to shrink the Chinese labor cost advantage in the future. Robot maker ABB has started working with smartphone manufacturers to bring back jobs to the United States. Robot density in the United States manufacturing industry is now more than double that of China and is ranked seventh globally.
- According to GSMA,in 2021, 5G connections are forecast to account for 14% of all mobile connections in North America, and by 2025, it is expected to reach 46% of the total connectivity. Since fast and secure 5G connectivity is expected to enable agile operations and flexible production, the technology is expected to facilitate automated warehouses, automated assembly, connected logistics, packing, and product handling, and the use of autonomous carts.

Competitive Landscape

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

- March 2021 - Cognex Corporation launched Cognex Edge Intelligence, a platform that 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 be used to identify performance issues and take corrective action faster.
- January 2021 - Cognex Corporation launched In-Sight 3D-L4000 embedded vision system. It features 3D laser displacement technology, this smart camera allows engineers to quickly, accurately, and cost-effectively solve a range of inspections on automated production lines. It also provides a massive suite of true 3D vision tools and making them as easy to use as the industry leading In-Sight 2D vision tools.

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Table of Contents

1 INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study

2 RESEARCH METHODOLOGY

3 EXECUTIVE SUMMARY

4 MARKET DYNAMICS
4.1 Market Overview
4.2 Industry Value Chain Analysis
4.3 Industry Attractiveness - Porter's Five Force Analysis
4.3.1 Bargaining Power of Suppliers
4.3.2 Bargaining Power of Buyers
4.3.3 Threat of New Entrants
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry
4.4 Impact of COIVD-19 on the Market
4.5 Market Drivers
4.5.1 Growth of Internet of Things
4.5.2 Increased Demand for Industrial Automation
4.6 Market Restraints
4.6.1 Security and Privacy Concerns

5 MARKET SEGMENTATION
5.1 Technology
5.1.1 Industrial Robotics
5.1.2 Internet of Things
5.1.3 3d Printing/Additive Manufacturing
5.1.4 Advanced Human Machine Interface (HMI)
5.1.5 Big Data and Analytics
5.1.6 Machine Learning and Artificial Intelligence
5.1.7 Other Technologies
5.2 End User Industry
5.2.1 Automotive
5.2.2 Food & Beverages
5.2.3 IT
5.2.4 Telecom
5.2.5 BFSI
5.2.6 Retail
5.2.7 Other End user Industries
5.3 Geography
5.3.1 North America
5.3.1.1 United States
5.3.1.2 Canada
5.3.2 Europe
5.3.2.1 United Kingdom
5.3.2.2 Germany
5.3.2.3 Spain
5.3.2.4 France
5.3.2.5 Rest of Europe
5.3.3 Asia Pacific
5.3.3.1 China
5.3.3.2 Japan
5.3.3.3 South Korea
5.3.3.4 India
5.3.3.5 South East Asia
5.3.3.6 Rest of Asia Pacific
5.3.4 Rest of the World

6 COMPETITIVE INTELLIGENCE
6.1 Company Profiles*
6.1.1 Accenture PLC
6.1.2 Google LLC
6.1.3 Siemens AG
6.1.4 IBM Corporation
6.1.5 Microsoft Corporation
6.1.6 Cognex Corporation
6.1.7 Hewlett Packard Company
6.1.8 SAP SE
6.1.9 EMC Corporation
6.1.10 Oracle Corporation
6.1.11 Adobe Systems Inc.

7 INVESTMENT ANALYSIS

8 FUTURE OUTLOOK OF THE MARKET