At the outset, the first quarter of 2020, companies in the industry 4.0 and smart manufacturing sectors around the world were anticipating another strong year with an accelerating global economy after more than a decade of rapid growth. In January 2020, market research firm MarketsandMarkets forecasted year-over-year accelerating growth for market with a total value of $214.7 billion in 2020 and continued strong growth through 2025, reaching a projected market value of $384.8 billion, 12.4% CAGR over the five years.
Source: MarketandMarket Analysis, Information Service Group, Inc.
THE COVID-19 EFFECT
When the COVID-19 pandemic hit in the first quarter of 2020, the impact on the global economy was significant, and the industry 4.0 segment felt it with the loss of 1.3 million manufacturing jobs in the US in April 2020. As Asia-Pacific, Europe, and North America shut down their economies with governmental stay-at-home orders. In response, many industry research firms predicted a negative growth rate with a drop of 16%.
Source: MarketandMarket Analysis, Information Service Group, Inc.
THE LARGEST MARKET SHARE
APAC has the largest Industry 4.0 and smart manufacturing market share, and there are reasons for such. Manufacturing is one of the pillars of China’s economy and is undergoing a rapid transformation. In addition, India is poised to be come the fifth-largest manufacturing country in the world by the end of 2020. In this regard, manufacturing giants, such as GE, Siemens, HTC, Toshiba, and Boeing have either set up or are in process of setting up manufacturing plants in India.
Source: Mordor Intelligence
Moreover, Japan’s supplementary budget for the 2020 fiscal earmarked JPY 23.5 billion for companies that move production to the Southeast Asian countries. By expanding the subsidy program’s scope, Japan aims to reduce its dependence on a particular region. It wants to build a system that can provide a stable supply of medical materials and electronic components, even during the emergencies. This is expected to drive investment in the Industry 4.0 and smart factory market in the region.
THE LPWAN MARKET
Despite the impact of the COVID-19 pandemic and the chipset supply shortage, the LPWAN market enjoyed strong and steady growth in 2020 and 2021. At this point, the market is even becoming a major driver for the growth of the nearly 13 billion IoT connections globally. According to IoT Analytics’ latest LPWAN market report, the global installed based of LPWAN-enabled active devices grew 62% to 450 million devices during the 2020 and is expected to grow further 47% to 660 million devices by the end of 2021.
Source: IoT Analytics Research 2021.
Smart metering is one of the earliest and, by far, the most-adopted use case in the LPWAN market. Several large-scale smart metering projects relying on LPWAN connectivity have been launched or completed in the past two year. During 2020, various IoT vendors reported that they experienced an unexpected spike in demand for applications that help combat the COVID-19 pandemic. Furthermore, the demand for the pandemic applications seems likely to remain beyond the pandemics and retains such for future risk management.
Source: IoT Analytics Research 2021
The general IoT ecosystem needs to stay aware of shifts in this market to form the right partnerships and support the right LPWAN technologies for the right use cases. In addition, organizations deploying connected IoT devices should recognize that LPWAN has become a serious consideration, at least for backup connectivity.
Article by: Asst. Prof. Suwan Juntiwasarakij, Ph.D., Senior Editor