This IDC FutureScape presentation provides the regional context for the Asia/Pacific excluding Japan (APEJ) region for IDC Manufacturing Insights' worldwide predictions for 2016. The presentation provides 10 predictions for manufacturing in 2016 and the medium term with the time horizon, the organizational level of impact, and the relative complexity of implementation.
Manufacturing as a sector in APEJ is receiving wide attention across the ecosystem — from governments to enterprises and technology players. It is a vital area of focus not just for GDP growth or employment generation but also for strategic long-term benefits. That is where "technology" is becoming ubiquitous across organizations from products, processes, services, and people for significant business impact by undergoing "digital transformation."
IT spending in manufacturing in the APEJ region will be close to US$35 billion in 2016, growing at a compound annual growth rate (CAGR) of 6% in the period of 2015–2019. "Innovation" on products and services is the top-ranking business priority. However, companies are struggling to fund investments in innovation processes due to unclear ROI, preferring investment in automation with tangible measurable benefits.
"Factory automation" was the top area of investment from our market study in 2015 and we expect the trend to continue into 2016. Internet of Things, or IoT, is becoming the glue that connects diverse entities in an organization for connectivity, from the shop floor to customers and suppliers. IoT is backed by analytics to identify valuable insights and meaningful action steps out of the data it generates. With what IDC calls Innovation Accelerators — robotics, 3D printing, IoT, cognitive computing, advanced security technologies, natural interfaces — becoming affordable and feasible, their adoption will evolve beyond pilots to large-scale implementations offering significant business impact.
Basic infrastructure such as reliable power and transportation networks continue to be an issue in the adoption of technologies across the region. However, this in turn is driving innovation as companies develop processes to overcome these challenges. Compared with the worldwide trends, we do see most technology adoption lagging behind that of the developed world, with the exception being the investments in value realization from past technology investments and in modern plants. These are top of mind for manufacturing companies across the region and will see greater attention paid to them through 2016.