McKinsey recently released a report entitled “Is industrial automation headed for a tipping point?” The report analyzes two scenarios that attempt to reveal the most probable path that industrial automation may take in the future: one is improvement, the other is change, and analyzes how companies can respond.

Is industrial automation still a slow track? Has she crossed the chasm into the future of rapid growth?

McKinsey recently released an interesting report entitled “Is industrial automation headed for a tipping point?” .

As we perceive, factories are moving toward more automation and autonomy, software defined and AI drives are sweeping the shop floor, and many devices are becoming more like smartphones with robotic arms. Not only factory-made products like mobile phones, watches and cars… It is becoming more intelligent in the sense that the factory itself can also be seen as a “product”, and each factory can use advanced processes and experiences that are “encapsulated” by other factories.

This report analyzes two scenarios that attempt to reveal the most likely path of future industrial automation: one is improvement, the other is change, and analyzes how companies can respond.

Scenario 1: Improvement (15 + years)
Gradual evolution

Technology adoption trends are slow, consistent with past rates of change; The process of standardization is slow; Innovations (e.g., low code/no code and digital twins) are only used for specific use cases and industries.

Scenario 2: Change (5 to 10 years)
Rapid transformation

The adoption of disruptive technologies has spawned workshops driven by data analytics and software, enterprises actively adopt new business models, and the cloud is widely used to form ecosystems around core platforms.

The report also divides the industrial automation market players into four broad categories: Internet giants, traditional automation companies, software providers, and professional players. And concluded that if the manufacturing enterprises in the short term to adopt digital technology, “scenario 2: change” road, then the Internet giants will be the most active action, will become the biggest benefit.

In other words, if the industrial automation market develops in accordance with the path of change for the period of 5 to 10 years, it may lead to the expansion of the profitability of Amazon, Microsoft, Ali, Tencent and other companies, and take share from the traditional industrial automation enterprises Siemens, ABB, Honeywell, Emerson and other companies.

But if technologies such as soft PLC, industrial artificial intelligence, and industrial wireless do not break through the tipping point of growth, industrial automation may grow more slowly and be widely adopted around 2040.

In either scenario, small and medium-sized automation companies and end users in manufacturing will benefit. Because McKinsey encourages Internet giants and traditional automation companies to strengthen ecological cooperation, through partnerships to acquire necessary industry knowledge, or through mergers and acquisitions to expand capabilities.

The end user can consider both Internet giants and traditional automation companies in the alternative suppliers, and the introduction of equal players is conducive to the benefit of the end user.

In this article, we break down the highlights of the report, as well as the latest industrial automation technologies worth paying attention to, and the content is divided into the following three parts:

Two future Scenarios for Industrial Automation: Improvement or Transformation? And how to deal with it?
Current Industrial Automation Market Overview: Beyond Efficiency and Cost, the new dimension of Industrial automation
The impact of new automation technologies: Simplicity and standardization are the magic weapons for new technologies to break out of the PoC curse