North America Digital Transformation In Manufacturing Market (2023 - 2030)

Market Size & Trends

The North America digital transformation in manufacturing market size was valued at USD 15.79 billion in 2022. It is anticipated to witness a CAGR of 16.5% from 2023 to 2030. The market is expected to gain significant momentum over the coming years owing to surging demand for knowledge-based manufacturing equipment that features simulation capabilities, advanced control, and sensing. Additionally, the growing penetration of the Internet of Things (IoT) and the adoption of cloud platforms in production processes are projected to spur the growth of the market over the forecast period.

Furthermore, IoT-enabled manufacturing plants allow manufacturing companies to optimize business operations, product and services innovation, and enhance supply chain and logistics management. Thus, manufacturers from different sectors such as industrial equipment, healthcare, defense, and electronics are seeking solutions that cater to specific needs.

Automation has been constantly evolving over the past few years, enabling manufacturers to simultaneously manage multiple tasks. The emergence of Artificial Intelligence (AI) is the major factor promoting industrial automation, where processes are restructured for smarter, real-time, and efficient decision-making in production. Growing penetration of IoT is enabling manufacturers to modernize their operations at two basic levels, namely in providing connected products and connecting supply chains.

Development of IoT-enabled sensors that provide various benefits such as digital network proficiency and self-diagnostics help the manufacturing industries to meet distinct industry requirements. Furthermore, increasing spending on research and development activities by sensor providers facilitates the development of advanced sensors that meet the requirements of different industrial plants.

Numerous initiatives at the industry level have been promoting and advertising IoT applications and their use cases. For example, the U.S. government launched a program called the National Network for Manufacturing Innovation (NNMI) that aimed to boost the adoption of advanced manufacturing technologies for manufacturing innovative products. Additionally, ecosystems of IoT solution providers, including hardware, software, and services vendors are working toward a unified and common goal of increasing awareness and adoption of IoT.

However, the growing threat of cyberattacks in North America is estimated to hinder the growth of the market over the forecast period. Exchange of large volumes of information between shop floors and cloud and among stakeholders across a supply chain enhances the vulnerability of systems to threats from internet sabotage attacks. Interconnected manufacturing processes increase exposure to security risks, which have financial and critical impacts on connected production processes.

Enterprise Size Insights

The large enterprise segment accounted for the largest revenue share of 58.4% in 2022 Large Enterprises are making significant investments in digital manufacturing processes to enhance or maintain their market position in a highly competitive environment. They are also readily adopting advanced technologies to cope with changing industry dynamics. Moreover, they are undertaking various strategic initiatives such as partnerships and mergers & acquisitions to adopt new technologies for increasing the efficiency of production processes.

The small and medium enterprise segment is expected to grow at the fastest CAGR of 18.0% during the forecast period. A growing number of SMEs in the region are driving the demand for deployment of digital manufacturing solutions owing to their business optimization capabilities. Furthermore, increasing government funding for SMEs to deploy digital manufacturing solutions is estimated to supplement the growth of the SME segment.

Type Insights

The solution segment accounted for the largest revenue share of 68.1% in 2022, owing to various benefits offered by digitalization, including improving productivity, optimizing return on investment (ROI), and reducing cost for businesses across the manufacturing sector. Analytics-based solutions find a wide range of applications across various industries such as aerospace & defense, pharmaceutical, life science, oil and gas, and automotive.

These solutions can be used for predictive maintenance systems in the manufacturing sector to reduce downtime and increase production. Additionally, predictive analytics help manufacturers to understand issues related to machines and this helps them increase productivity and simultaneously boost the profitability of organizations

The use of cloud computing solutions in manufacturing helps industries to control and monitor their plant processes by synchronizing data through a single point. The solution also allows users to access information via the internet. Cloud computing is considered to be a key solution for digital transformation. The need for faster deployment, development, and delivery of solutions, along with higher flexibility, is further bolstering the demand for cloud computing solutions.

The service segment is expected to grow at the fastest CAGR of 17.6% during the forecast period. The manufacturing industry is undergoing a digital transformation, and the service segment is growing rapidly as a result. The growth is attributed to few reasons, including increasing complexity of manufacturing processes, as manufacturing processes become more complex, there is a growing need for specialized services to help manufacturers keep their operations running smoothly. The rising demand for customized products due to which manufacturers are increasingly under pressure to provide customized products to their customers. This requires a high level of flexibility and agility, which can be difficult to achieve without the help of service providers. Data is becoming increasingly important in the manufacturing industry. Service providers can help manufacturers collect, analyze, and use data to improve their operations.

Deployment Insights

The on-premise segment accounted for the largest revenue share of 52.9% in 2022 as it is expected to remain the preferred method of deployment among small & medium enterprises (SMEs). SMEs are reluctant to switch to the cloud owing to a lack of awareness of its advantages. However, this scenario is projected to change gradually over the forecast period.

The hosted segment is anticipated to grow at the fastest CAGR of 19.7% during the forecast period owing to the flexibility provided by this type of deployment. It allows users to access connected manufacturing machines from remote locations through mobile devices as well as desktop computers. Additionally, it offers benefits such as cost efficiency, easy accessibility and deployment, and minimal upgrade and maintenance requirement.

Country Insights

U.S. is anticipated to register highest revenue share of 80.3% in the North America digital transformation in manufacturing market and is expected to grow at the fastest CAGR of 17.0% over the forecast period, owing to increasing investments in Internet-of-Things (IoT), enterprise resource planning (ERP), and big data. Companies operating in North America are increasingly opting for the digitization of legacy systems. Furthermore, manufacturing companies are making considerable investments in digital technologies and related assets to increase production efficiency as well as to reduce operational costs. Governments in the region are investing in research and development activities to set up advanced sensors network, process controls, and data analytics in manufacturing companies to improve productivity and energy-efficiency.

Canada is expected to grow significantly over the forecast period. Manufacturers in Canada are making investments for transforming factory operations into digital factory operations. They are primarily focusing on automation and robotics, supply chain collaboration, and smart floor sensors. As a result, the market in Canada is poised to exhibit a phenomenal CAGR during the forecast period.

Key Companies & Market Share Insights

Companies in North America are focusing on improving production processes to provide customized products based on consumers' demands. Companies are focusing on strategies such as product launch, partnership, collaboration, agreement, and mergers and acquisitions to expand their presence as part of expansion strategies. For instance, in December 2021, Honeywell announced acquisition of US Digital Designs, a company providing alerting and dispatch communications solutions for first responders. This acquisition aims to expand Honeywell's portfolio of public safety communications solutions and help to improve the efficacy and response times of first responders. The acquisition of US Digital Designs is a strategic move for Honeywell as it seeks to expand its presence in the public safety market.

Recent Developments

• In May 2023, Dassault Systèmes and Envision launched a digital collaboration to improve the performance of renewable energy solutions. Envision Digital and Dassault Systèmes collaborated to provide virtual twin experiences for the engineering, manufacture, and operations of massive assets across industries using their respective technologies, EnOS and 3DEXPERIENCE.

• In February 2023, GE Digital, a provider of software and industrial Internet of Things services to industrial companies, announced advancements to its cloud-based Manufacturing Execution Systems (MES) software in the Proficy Smart Factory. These enhancements include composable no-code technology, which allows companies to improve their operations in real-time and deploy the software in a way that best suits their needs.

• In February 2023, Siemens introduced Tecnomatix Process Simulate Collaborate, a web-based program that allows users to collaborate on Process Simulate studies, perform workcell simulations, and examine studies digitally. The application employs 3D simulation and visualization to boost productivity and efficiency on manufacturing production lines through Process simulation studies.

• In January 2023, Siemens Digital Industries Software launched eXplore Live at the Smart Factory in Wichita, Kansas, a new experience center showcasing Industry 4.0 technology and solutions from a global ecosystem of leading enterprises. The Smart Factory, located on Wichita State University's Innovation Campus, features a fully working production line as well as experiential labs where visitors may learn about and experience the latest in smart manufacturing.

• In October 2022, Rockwell Automation and Cognite partnered to provide the manufacturing industry with a single edge-to-cloud industrial data hub service. The FactoryTalk software from Rockwell and the Industrial DataOps platform from Cognite are being integrated to create a data center that can scale to meet the needs of major organizations.

• In July 2022, Yokogawa Electric Corporation announced the establishment of Yokogawa Digital Corporation, a new company that supplies manufacturers with management consulting services. Yokogawa Digital aims to draw on Yokogawa's expertise in operational technology (OT) and information technology (IT) to offer a variety of services ranging from corporate management consultancy to plant operations.

• In August 2020, Emerson and Mitsubishi Hitachi Power Systems Americas (MHPS) announced a collaboration to provide digital solutions that assist utility clients in North America in achieving operational excellence. The firms set to work together to develop solutions to improve reliability and performance, enabling AI-driven and predictive maintenance and automated decision-making. The collaboration plans to utilize both companies' experience to improve the reliability and performance of power facilities that use MHPS gas or steam turbines.

North America Digital Transformation In Manufacturing Market