Smart Factories Expected to Add $500 Billion to Global Economy

In a new survey, more than half of the respondents claimed that they have invested $100 million or more in smart factory initiatives in the past five years.

Capgemini smart factories

As technologies advance, so too do manufacturing facilities, giving rise to a new wave of smart factories that are expected to add U$500 billion to the global economy annually over the next five years, says technology consulting firm Capgemini in a new report.

In the survey, more than half of the respondents claimed that they have invested $100 million or more in smart factory initiatives in the past five years.

“The next few years will be critical as manufacturers step up their digital capabilities and accelerate their digital outcomes to maximize company benefits,” said Jean-Pierre Petit, Global Head of Digital Manufacturing at Capgemini.

Considering the report, almost every large manufacturer is outfitting their factories with digital tools some way or the other. Smart factories are those that arm themselves with digital technologies, such as internet-of-things (IoT), big data analytics, artificial intelligence (AI), and robots.

Nevertheless, Capgemini expects only 21% of manufacturing plants to become “smart” by 2022. Sectors such as aerospace and defense, industrial manufacturing, and automotive, where people are working alongside intelligent machines, will be the leaders of this transition, the report added.

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Factories in the US and Western Europe, where labor shortage is the common barrier for manufacturers to scale up operations, are at the forefront of this revolution, while their counterparts in India and China lag far behind.

The report has cautioned that the shift to smart factories will transform the global labor market, but Grégoire Ferré, Chief Digital Officer at Faurecia, tells workers not to worry, adding that “automation gives workers time to focus on other, more-important tasks”.

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