Smart factories and manufacturing techniques are forecast to witness stellar growth over the next five years, according to a brace of new reports.

First, a study by California-based market research company Global Industry Analysts Inc (GIA), predicts that the global smart factory market will be worth $214 billion by 2026, spurred on by the Covid-19 pandemic, as manufacturers look to build more resilient, data-fuelled systems.

The crisis has also revealed the pressing need for factories to ensure worker safety.

Growth will be further driven by increased investments in automation, robots, the Industrial Internet of Things (IIoT), and connected devices for increased visibility, real-time data analysis, and predictive maintenance.

GIA estimates that the global smart factory market was worth over $140 billion last year and will record a compound annual growth rate (CAGR) of 7.4 percent in the years to 2026.

The US sector alone is worth $28.2 billion, according to the company’s figures. However, the Chinese market is predicted to be worth far more by 2026: $43.2 billion, growing at a faster rate of 8.6 percent over the forecast period.

Strong growth is also predicted in the Japanese, Canadian, and German markets, with the latter driven by automotive giants, such as Audi and BMW, embracing factory automation.

However, the difficulties of forging a consensus view – or anything approaching one – in the analysis industry are notorious. 

A rival study by consultants Data Bridge Market Research predicts a far higher global valuation for smart manufacturing by 2026: $417 billion – nearly twice as high as the GIA report – with a CAGR of 11.75 percent.

Data Bridge identifies similar drivers and technologies behind the predicted boom, so the key for decision-makers is to explore these trends and ignore the estimated financials – unless you are investing in shares rather than equipment, of course.

It is also important to understand the complex issues in play. A 2019 report by Capgemini, Smart Factories at Scale, warned that simply investing in connected technologies and data analysis systems is not enough. 

Only 14 percent of the 1,000 manufacturers surveyed by the services company described their smart factories as successful.

According to Capgemini, the core challenge with smart factory programmes is scaling them beyond the pilot phase, as companies encounter far greater complexity than they had planned for, together with legacy technology and a lack of skills.

At the heart of the challenge are IT and operational technology convergence, and the need for employees to develop hybrid skills. Organisations are not investing fast enough in retraining their workforces, warned that report.