According to Fortune Business Insights, the global industrial automation market size was valued at USD 272.51 billion in 2025. The market is projected to grow from USD 299.21 billion in 2026 to USD 632.12 billion by 2034, registering a CAGR of 9.80% during the forecast period from 2026 to 2034. Increasing adoption of Industry 4.0, industrial Internet of Things (IIoT), 5G wireless technology, digital twins, augmented reality (AR), and advanced automation systems is supporting market expansion across industries. Europe held the largest share of the market in 2025, accounting for 32.99% of global revenue.
The industrial automation market encompasses solutions used across discrete and process manufacturing. The market is segmented by component into hardware and software and by industry into discrete automation and process automation.
Automation software includes human-machine interface (HMI), manufacturing operations management (MOM), and supervisory control and data acquisition (SCADA) solutions. These technologies help manufacturers streamline operations and use industrial data to improve processes.
Hardware includes sensors, PLCs, HMIs, servo systems, laser markers, safety light curtains, robots, drives, and motors. Technological developments in robotics and connected industrial equipment are contributing to the increasing deployment of automation systems.
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Digital twins are emerging as an important technology in industrial automation. They allow organizations to simulate processes, evaluate feasibility, reduce implementation risks, estimate potential improvements, and support equipment maintenance. The integration of cloud systems and smart sensors has made digital twin implementation more manageable.
AR is also being incorporated into manufacturing applications. It can support employee training, assembly, maintenance, and inspection activities. According to the source, Siemens offers Assist AR for manufacturing-related applications, demonstrating the integration of AR with digital manufacturing technologies.
Industrial IoT is another major market trend. IIoT connects industrial assets and provides greater visibility across manufacturing operations. Combined with edge computing, cloud computing, AI, and advanced analytics, IIoT can help organizations analyze machine data and improve asset productivity and availability.
The growing use of connected industrial systems is therefore increasing demand for automation solutions capable of managing data throughout the manufacturing lifecycle.
The Fourth Industrial Revolution is encouraging manufacturers to adopt connected and digitally integrated production systems. Changing customer requirements, including personalized and faster services, are encouraging businesses to invest in Industry 4.0 technologies.
Technology partnerships are also supporting market development. The source highlights collaborations involving companies such as Honeywell, Tech Mahindra, Siemens, and SAP to develop digital manufacturing and Industry 4.0 solutions. These collaborations focus on digital transformation, 5G, software capabilities, and connected manufacturing processes.
Smart manufacturing is increasing the use of automation technologies across industrial operations. Robots, sensors, software, and connected equipment can help manufacturers streamline production and manage increasingly complex processes.
However, high initial investment remains a restraint. Automation implementation requires substantial capital expenditure and employee training, while the return on investment can be difficult to predict, particularly for small and medium-sized enterprises.