Manufacturing digitization and labor shortages increase investment in industrial automation across production industries

The global Industrial Automation market, valued at USD 198.46 Billion in 2025, is expected to reach USD 471.82 Billion by 2035, registering a 9.1% revenue CAGR during the forecast period.

Growth is supported by increasing investment in smart manufacturing, digital production systems, and industrial connectivity across sectors including automotive, electronics, food and beverage, pharmaceuticals, and energy. Manufacturers are adopting automation to improve productivity, address labor shortages, reduce operational costs, and enhance production quality. According to the International Federation of Robotics (IFR), global industrial robot installations reached record levels in recent years, reflecting continued investment in factory automation. Government initiatives including Germany's Industry 4.0 strategy, China's Made in China 2025 program, and advanced manufacturing initiatives supported by the U.S. Department of Commerce are also contributing to broader automation deployment.

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KEY GROWTH DRIVERS

Demand for industrial automation continues to increase as manufacturers seek greater operational efficiency and production flexibility. The integration of industrial Internet of Things (IIoT), artificial intelligence, machine vision, robotics, and cloud-based manufacturing execution systems is improving real-time monitoring and predictive maintenance capabilities. Automation also supports compliance with stricter product quality standards while reducing downtime and production waste. For instance, in May 2024, Siemens AG, Germany, expanded its industrial AI portfolio and introduced new automation software capabilities to improve digital manufacturing and factory operations. Similar investments by global automation providers continue to strengthen industrial digitalization across multiple sectors. These are some of the key factors driving revenue growth of the Industrial Automation market.

MARKET RESTRAINTS

However, high initial capital expenditure remains a major challenge, particularly for small and medium-sized manufacturers. Integration of modern automation platforms with aging industrial infrastructure often requires extensive customization and skilled engineering resources. The shortage of qualified automation engineers, cybersecurity concerns associated with connected production environments, and extended implementation timelines also create operational challenges. These factors are expected to limit Industrial Automation market growth to some extent over the forecast period.

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SEGMENT HIGHLIGHTS

The industrial robots and control systems segment accounted for the largest share of the global market due to widespread deployment in automotive manufacturing, electronics assembly, packaging, and material handling applications. Programmable logic controllers (PLCs), distributed control systems (DCS), and supervisory control and data acquisition (SCADA) platforms continue to form the backbone of automated production environments by enabling reliable process control and operational visibility.

The industrial software and IIoT solutions segment is expected to register the fastest growth during the forecast period. Manufacturers are increasingly adopting digital twins, cloud analytics, artificial intelligence, and predictive maintenance platforms to improve asset utilization and production planning. Software-based automation enables better data integration across production lines while supporting flexible manufacturing operations and remote monitoring capabilities.

REGIONAL OUTLOOK

North America

North America continues to represent a major market for industrial automation due to high technology adoption and continuous investment in advanced manufacturing. The United States remains a leading contributor as manufacturers modernize facilities to improve productivity and strengthen domestic production capacity. Companies including Rockwell Automation and Honeywell International continue to expand industrial automation solutions across discrete and process manufacturing industries. Government initiatives promoting semiconductor manufacturing and domestic industrial investment are also supporting market expansion.

Europe

Europe maintains a strong position due to its established industrial base and long-standing focus on factory automation. Germany remains one of the largest automation markets, supported by its automotive and industrial machinery sectors. Companies such as Siemens AG, Bosch Rexroth, and ABB continue to invest in digital factory technologies and intelligent automation platforms. The European Union's continued focus on digital manufacturing, sustainability, and industrial competitiveness further supports automation investment across member states.

Asia Pacific

Asia Pacific is expected to register the fastest growth during the forecast period. China, Japan, South Korea, and India continue to increase manufacturing capacity while investing in factory modernization. According to the International Federation of Robotics, China remains the world's largest market for industrial robot installations. Regional manufacturers are expanding automation across electronics, automotive, semiconductor, and consumer goods production. Companies such as Mitsubishi Electric, Omron Corporation, and Fanuc Corporation continue to strengthen automation capabilities through new product development and regional manufacturing investments.

Global Industrial Automation Market Segmentation Analysis

For the purpose of this report, Emergen Research has segmented the global industrial automation market on the basis of component, technology, end-use, and region:

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By Component Outlook (Revenue, USD Billion; 2024-2035)
Hardware
Software
Services

By Technology Outlook (Revenue, USD Billion; 2024-2035)
SCADA
DCS
PLC
MES
Industrial Robotics
HMI
Others

By End-Use Outlook (Revenue, USD Billion; 2024-2035)
Automotive
Food & Beverage
Oil & Gas
Pharmaceuticals
Semiconductors & Electronics
Chemical
Others

Regional Outlook (Revenue, USD Billion; 2024-2035)
North America
U.S.
Canada
Mexico

Europe
Germany
France
U.K.
Italy
Spain
Benelux

Rest of Europe
Asia Pacific
China
India
Japan
South Korea
Rest of APAC

Latin America
Brazil
Rest of LATAM

Middle East & Africa
Saudi Arabia
UAE
South Africa
Turkey
Rest of MEA

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