Connected Worker Solutions Market To Reach $3.24 Billion By 2028, Overcoming Initial Slow Growth
Connected Worker Solutions Market To Reach $3.24 Billion By 2028, Overcoming Initial Slow Growth
The global market for connected worker solutions will grow from $1.38 billion in 2022 to reach $3.24 billion in 2028, according to the Verdantix market size and forecast report on connected worker solutions. The market will grow at a CAGR of 15.3%, driven by increasing awareness of the benefits of connected worker solutions. However, year-on-year growth decreased between 2022 to 2023, at 10% compared to 15% between 2021 to 2022. This is the result of macroeconomic instability and pressures, along with the high costs of hardware products.
In recent years, Europe and America have faced significant inflation, with Europe's rates climbing from 2.9% in 2021 to 9.2% in 2022, and those in the US from 4.7% to 8.0% over the same period. This led to tightening of budgets and cautious spending among end-users, challenging both connected worker software and hardware vendors to rethink pricing and development. Particularly impacted are hardware firms known for pricier items, like VR headsets, as they decide whether to absorb costs or pass them on to their consumers. This financial climate has slowed the industry's growth, with hardware's year-on-year growth dipping from 13.2% between 2021 and 2022 to 3% between 2022 and 2023. Funding and valuations of software firms have also seen a downturn, with a noticeable cooling off in venture capital (VC) investments across various segments of the tech industry, especially in 2022 and the early part of 2023, with little news regarding funding or acquisitions.
Despite these challenges, the demand for connected worker technologies, aimed at improving worker retention, safety and production efficiency, remains strong, with spending projected to reach $3.24 billion by 2028. Spending – as well as activity – started picking up again in the second half of 2023. Key developments include PTC's $1.46 billion acquisition of Servicemax, integrating its field service management with PTC's digital solutions to enhance field service information. Additionally, IFS's acquisition of Poka aims to digitally streamline worker activities across various industries, improving efficiency in training and problem-solving. Similarly, ETQ, part of Hexagon, partnered with Augmentir to launch the ETQ Reliance Connected Worker solution, combining quality management with advanced technology to automate data and improve quality control in manufacturing. These strategic moves demonstrate a focus on enhancing efficiency and information accessibility.
Industrial firms are increasingly investing in software solutions such as those from Operations1 and Zaptic for operational insights and work instructions. The widespread use of these solutions on smartphones and tablets facilitates scalable adoption across large-scale operations. Additionally, the integration of generative AI, particularly for information retrieval and template generation, is set to significantly enhance these applications. For example, Augmentir has incorporated ChatGPT technologies into its AI-connected worker platform. Among seven software use cases, operational insights and work instruction delivery is projected to grow the fastest, at a CAGR of 19.5%.
Connected worker solution providers are well-positioned to thrive in an expanding market but face challenges from macroeconomic instability and rising costs, especially for hardware. To succeed, these firms must thoroughly understand their costs for strategic pricing to protect margins. Moreover, pursuing acquisitions and partnerships is a vital tactic against economic volatility. These collaborations help diversify risks, penetrate new markets and improve cost efficiencies, thereby stabilizing providers financially and enhancing their capabilities and market reach. This strategy equips them to better withstand economic shifts and sustain a competitive advantage.