Navigating Change: The Unprecedented Impact of COVID-19 on the Smart Manufacturing Market

Technologies

Feb 13

The COVID-19 pandemic has had a significant impact on the global economy, including the smart manufacturing market. Prior to the pandemic, the smart manufacturing sector was experiencing rapid growth and anticipated another strong year in 2020. However, the pandemic brought about a series of unprecedented challenges and disruptions.

Pre-COVID-19 Projections

In January 2020, market research firm MarketsandMarkets forecasted a positive outlook for the smart manufacturing market, with a projected total market value of $214.7 billion in 2020 and continued strong growth through 2025. The industry was expected to experience a 12.4 percent compound annual growth rate (CAGR) during this period.

Impact of COVID-19

The impact of COVID-19 on the smart manufacturing industry has been significant, and the recovery process is ongoing. The pandemic has accelerated the adoption of Industry 4.0 technologies, which include connectivity, advanced analytics, automation, and advanced manufacturing. It had a significant negative impact on the global economy, leading to the loss of 1.3 million manufacturing jobs in the U.S. alone during the month of April. As economies around the world shut down, the smart manufacturing market also experienced a downturn. Revised projections estimated a negative growth rate of 16 percent for 2020, with a market value of $181.3 billion. However, despite this setback, during the impact, the study estimated that a healthy recovery was expected to begin in 2021. One of the most profound impacts of COVID-19 on smart manufacturing has been the reevaluation and fortification of supply chains. Uncover how the sector is redefining supply chain resilience, embracing technologies that enhance visibility, mitigate risks, and ensure continuity in the face of unforeseen disruptions.

Post-COVID-19 Trends

Post-COVID-19, the smart manufacturing market was expected to rebound aggressively. Companies that have utilized digital solutions have been better positioned to weather the storm, moving faster and further than their peers during the crisis. A recent survey found that 93% of manufacturing and supply-chain professionals plan to focus on the resilience of their supply chain, and 90% plan to invest in talent for digitization.

However, the recovery has not been uniform across the industry. The Asia-Pacific (APAC) market, for example, is expected to recover only after 2021³. The rate of recovery is also influenced by various factors, such as supply chain disruptions, demand fluctuations, and the availability of workers.

In the U.S., the manufacturing outlook into 2022 is positive, with leading indicators being strongly positive. However, the rate of rise coming out from the depths of the pandemic recession can't be sustained through 2022.

The industry will continue to embrace Industry 4.0 technologies, such as the Internet of Things (IoT) and digital workflows, leading to a more mature state of IoT-based technology, processes, and workflow. There will also be an increasing demand for smart manufacturing products and solutions, as well as a growing importance of digital twins in maintaining operations and product development.