Digital Transformation Market – Growth, Trends, Covid-19 Impact, And Forecasts (2021 – 2026)

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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% over 2021-2026. Digital Transformation refers to the use of digital technology to solve traditional problems. Shifting from conventional to new digitalized business models facilitates the introduction of more technologically advanced products and services.

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.
– Digital Transformation refers to the use of digital technology to solve traditional problems. Shifting from conventional to new digitalized business models facilitates the introduction of more technologically advanced products and services. 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.
– Companies are building a robust infrastructure due to increased demand, and there is increased adoption of new technologies and solutions, further supporting the market growth. Due to growing competition within the industries, investments in technology are further increased to gain a competitive edge in the market. Owing to the integration of AI, machine learning, and rapid deployment of IoT and connected infrastructure, the market is expected to witness rapid growth over the forecast period.
– The increased demand for industrial automation is the primary driver for the digital transformation market. Automation involves the integration of mechanical systems with IT. The adoption of wireless communication is booming, and the penetration of this technology will expand in the future, driving the rate of digital transformation.
– Automation is being adopted across several industries where it can make an immediate and lasting difference, particularly in industries, such as manufacturing and oil and gas. These industries have begun the move toward digitization with more sensors accumulating data around the world. However, there are still some untapped areas where companies can improve within an increasingly diverse market.
– Adopting digital technologies enable internal communication and streamline plans by allowing engineering teams to work more efficiently with the enterprises in the end-user industries to better manage data and project requirements. Automation can greatly improve efficiency and bring down costs of the following processes.
– 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 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.

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Key Market Trends

Industrial Robotics to Have Significant Growth

– 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.
– Industrial robots have witnessed a massive demand over the past decade, owing to the increasing adoption of smart factory systems where these robots play a vital part. The stock of industrial robots operating in smart factories increased by about 85% within five years (2014-2019), driven by the massive growth of smart production and automation.
– Rising penetration of the Industrial IoT across regions has been a major contributor to the growth of the market. For instance, the Made in China 2025 announcement is aimed to broadly upgrade the Chinese industry by moving toward quality-focused and innovation-driven manufacturing.
– 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.
– 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.

Asia Pacific Expected to Have Significant Growth

– In the Asia Pacific region, countries such as China, India, and Japan, among others continuously develop relevant strategies and policies to promote domestic industrial restructuring and upgrading for digital transformation. For instance, the pace of automation in China is faster than any other country globally, as China seeks to modernize its processes and retain its cost advantage in the global market, as its middle-class population soars, and wages continue to rise.
– Traditionally seen as the world’s manufacturing factory, China has spent significant effort to transform from (cheap) labor-intensivemanufacturing to high-end manufacturing through digitalization and industrialization. According to GSMA, China will account for one-third of the global IIoTmarket by 2025.
– The new infrastructure in China, such as roads, railways, and bridges, are built on advanced technology, and digitization lays the foundation for industry 4.0. The new infrastructure can drive efficiency by better matching supply with demand, and it can enable smart cities into providing sustainable living, boosts productivity by upgrading manufacturing, and can speed up digitization of the economy.
– Furthermore, the number of companies in the country deploying factory and process automation technologies and robotics is less, when compared to the vast size of China’s manufacturing base and the number of workers it employs. This trend holds a great opportunity for companies in digital transformation in China.
– Digital transformation in the country is also expected to be boosted by the uptake of smart manufacturing. As per the Ministry of Industry and Information Technology, China was likely to initiate 100 smart manufacturing pilot projects in 2018. According to the 13th Five-Year Plan of Smart Manufacturing, China aims to establish its intelligent manufacturing system and complete the key industries’ transformation by 2025.

Competitive Landscape

The digital transformation market is consolidated. 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.

– Oct 2020 – Accenture PLC agreed to acquire Avenai, an Ottawa-based provider of consulting and technology services. Financial terms were not disclosed. With Avenai's significant focus on the public sector market, the acquisition will enhance Accenture's capacity to drive the technology transformation taking place across the public sector in Canada.
– Jun 2020 – Renault Cars and Google Cloud announced a new industrial and technology partnership to accelerate the digitization of Renault's industrial system and of Industry 4.0 transformation. Google Cloud's solutions and experience in smart analytics, machine learning (ML) and artificial intelligence (AI) will enable Renault to improve its supply chain and manufacturing efficiency, its production quality, and the reduction in environmental impact through energy savings.

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