Which sectors spend the most on digital transformation?

Of these, automotive is the sector identified to spend the most on digital transformation. However, new challenges including cybersecurity and environmental issues mean that digital transformation spending is also expected to increase significantly in sectors such as electronics, oil and gas and consumer goods.

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ABI Research predicts that spending on digital transformation in the global automotive industry will reach $100 billion in 2022 and increase to more than $238 billion by 2030.

Driving this growth is the need for automotive manufacturers (OEMs) and their suppliers to adjust to the shift from internal combustion engines to electric powertrains. OEMs also need software to design new vehicles and work with suppliers to ensure that the components used meet not only performance requirements but also sustainability considerations. Another challenge is for OEMs to transition from old production lines to new ones without affecting output.

“The automotive industry is not alone in accelerating digital transformation,” said Ryan Martin, director of manufacturing and industrial markets research at ABI Research. “Industry 4.0 has revolutionized the way companies manufacture and distribute products with new technologies. This transformation is not limited to manufacturing, but has begun to take shape in other industries and markets around the globe.”

In the Electronics and High Tech sector, ABI Research says semiconductor manufacturers have largely eliminated human intervention from their manufacturing processes, instead adopting advanced, fully automated production lines. Spending on digital transformation in this sector is forecast to exceed $130 billion by 2030, up from $95 billion in 2022.

Meanwhile, the oil and gas sector remains volatile, with prices fluctuating due to economic conditions around the world. Producers are using digital technologies to monitor exploration and production activities to ensure maximum productivity is achieved from each extraction site. According to ABI Research, the industry must invest in new technologies, promoting digital transformation to monitor emissions and environmental conditions where they operate. These challenges will force oil and gas operators to increase spending on digital transformation.

Spending on digital transformation in the oil and gas industry will increase 7.5% from $17.17 billion in 2020 to $24.63 billion in 2025, as companies use artificial intelligence (AI), the Internet of Things (IoT) and robotics to optimize their production processes, according to a new report released by market research firm Frost & Sullivan.

In the consumer goods manufacturing sector, ABI Research said that consumer goods manufacturers are under pressure from many different aspects such as the cost of raw materials continues to increase, while retailers often do not accept price increases. In addition, manufacturers are also under increasing pressure on environmental, social and governance (ESG) issues. Therefore, investing in digital transformation is necessary, helping consumer goods manufacturers around the world reduce production costs and increase profits.

Consumer goods manufacturers are also prioritizing spending on cybersecurity to ensure their manufacturing processes do not fall into the wrong hands. According to ABI Research, total spending on digital transformation in the consumer goods manufacturing sector will reach $23.8 billion by 2030.