Smart factories to add US$500 billion to global economy by 2020

Rebecca Gibson
Rebecca Gibson
By Rebecca Gibson on 19 May 2017
Smart factories to add US$500 billion to global economy by 2020

Manufacturers expect their investments in smart factories to drive a 27% increase in manufacturing efficiency and thereby add US$500 billion to the global economy by 2022, according to Capgemini research.

The Smart Factories report from Capgemini’s Digital Transformation Institute manufacturers expect that 21% of their plants to be smart factories by the end of 2022. These smart factories will use technologies such as the internet of things, big data analytics, artificial intelligence, and advanced robotics to increase productivity, quality and flexibility.

Most industrial companies have already started to digitise plants, with only 16% of survey respondents saying they have not yet put a smart factory initiative in place, or even planned to implement one.

Manufacturers in the US and Western Europe are leading the transformation. Half of respondents in the US, France, Germany and the UK have already implemented smart factories, as opposed to 28% in India and 25% in China.

In terms of the different industry sectors, 67% of industrial manufacturing and 62% of aerospace and defence organisations have smart factory initiatives. Meanwhile, just over a third (37%) of life science and pharmaceutical companies are using digital technology.

More than half (56%) of those surveyed have invested US$100 million or more in smart factory initiatives over the past five years, while 20% have invested US$500 million or more. Yet, only 6% are at an advanced stage of digitising production and just 14% of respondents said they are ‘satisfied’ with their level of success to date.

As manufacturers’ smart factory efforts ramp up, Capgemini expects half of factories could be smart by the end of 2022 with the increased productivity gains adding up to between US$500 billion and US$1,500 billion to the global economy.

“This study makes it clear that we are now in the digital industrial revolution,” said Jean-Pierre Petit, global head of digital manufacturing at Capgemini. “The impact on overall efficiency will be profound. The next few years will be critical as manufacturers step up their digital capabilities and accelerate their digital outcomes to maximize company benefits.”

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