The share of industrial manufacturers who expect to adopt highly automated key processes by 2030 will more than double, from 18 to 50 per cent, according to PwC’s latest Global Industrial Manufacturing Sector Outlook.
The study, which surveyed 443 senior executives across 24 territories, finds that the global US$16 trillion industrial manufacturing industry sits at a historic inflection point, with AI and other advanced technologies, automation, and industry convergence accelerating and fuelling opportunities for growth and productivity.
Ryan Hawk, Global Industrials and Services Leader, PwC US, said: “As tech adoption and automation accelerate, advantage will shift from who has tools to who can adopt them and orchestrate them the fastest.
“Agile, tech-enabled, and future-fit manufacturers already have an edge – with the divide between those who are tech-enabled and those still operating with patched-up systems to widen even further.
“The questions for manufacturers [are] do they know what to adopt and their level of readiness to adopt it.”
Future-fit industrial manufacturers have an edge
“Future-fit” industrial manufacturing companies – the fastest, most agile, and most innovative 20 per cent of companies identified in the survey – have a clear edge.
Currently, a median of 29 per cent of these companies have highly automated processes, compared with 15 per cent of other companies.
By 2030, that share is expected to rise to 65 per cent for future-fit, versus 45 per cent for others.
They are also more likely to use advanced tech in key parts of the value chain. For example, 46 per cent of “future-fit” companies use advanced tech in product design and development, versus 34 per cent for other companies; 37 per cent of “future-fit” companies use it in production and operations, relative to 28 per cent for others.
In terms of the overall deployment of advanced technology within value chain steps, two areas will lead the way: first, production and operations, and second, product design and development – with heavy use reaching 76 per cent (from 29 per cent) and 72 per cent (from 37 per cent), respectively.
While the goals behind this investment boom vary by technology, they centre on growth and productivity. AI is equally expected to deliver both (47 per cent and 46 per cent respectively), while robotics is seen as less about growth (13 per cent) and more about productivity (78 per cent).
Industrial manufacturers increasingly expect growth to come beyond their core
Even as industrial manufacturers look to technology and AI to drive growth, the report finds that manufacturers are also increasingly expecting growth to come from new activities beyond their traditional core.
More than two-fifths (44 per cent) of total revenue is projected to come from outside the manufacturing of industrial and consumer products by 2030.
The survey finds manufacturers shifting toward offerings that bundle a range of equipment, know-how, and services, such as intelligent and connected solutions, flexible equipment, extended services, and electrical and data centre equipment.
For their part, future-fit manufacturers are more likely than others to prioritise intelligent and connected solutions, as well as recurring or outcome-based models as part of their growth strategy.
70 per cent of executives rate “developing new capabilities internally” as their top means of accessing growth opportunities.
However, while there is significant agreement about the importance of this kind of innovation, there is a clear gap between future-fit companies and the rest when it comes to the capabilities to deliver it.
Future-fit companies are more likely to say their workforce is empowered to act on new ideas (74 to 59 per cent), tolerate strategic risk taking (69 to 36 per cent) and that they have data-driven decision-making processes (75 to 47 per cent)
Ryan Hawk, Global Industrials and Services Leader, PwC US, concluded: “Tech enablement and automation will surge across the sector, yet the most meaningful performance differentiation will come from how coherently those technologies, including AI and automation, work together.
“If manufacturers are to unlock the growth and productivity opportunities afforded by new and emerging technologies, they must treat AI and other advanced technologies as a system, not a set of projects and advanced tools in isolation.”