Cyber-Physical Systems (CPS) Market Size, Share, and Growth Forecast for 2024 - 2031

Cyber-Physical Systems (CPS) Market Size and Share Analysis

The global cyber-physical systems (CPS) market is estimated to reach a size of US$ 111.21 Bn in 2024. It is predicted to rise at a remarkable CAGR of 13.9% through the projection period to reach a value of US$ 277.01 Bn by 2031.

Innovations in IoT, AI, robots, and data analytics are driving significant growth in the CPS market by improving decision-making, cost-cutting, and operational efficiency.

• CPS hardware is predicted to account for 48% of the global market in 2024, mostly due to improvements in networking devices, sensors, and controllers.

The increasing need for linked systems in sectors including manufacturing, oil and gas, and automotive is being fueled by the trend toward industrial automation. Consequently, it is estimated to increase CPS sales globally.

The energy sector is experiencing a surge in the deployment of smart grids due to the growing demand for sustainability. Smart grid adoption is predicted to rise by 25% in 2024, with major utilities implementing integrated systems, highlighting the significant impact of CPS on productivity, security, and sustainability.

Key Highlights of the Market

• Digital transformation across industries is driving a surge in the need for integrated systems that combine computational and physical components.
• The expanding IoT ecosystem presents opportunities for advanced cyber-physical system implementations and interactions.
• The demand for automation is on the rise in various sectors including manufacturing, healthcare, transportation, and critical infrastructure.
• The global investment in smart city technologies and intelligent infrastructure development is on the rise.
• Closed loop accounts for 62% of global usage in 2024 due to rising usage in advancement in industry.
• Based on vertical, the manufacturing segment is projected to account for a market share of 28.9% in 2024 due to digital transformation of industry.
• North America is predicted to reach a 30% market share in 2024 due to the multidisciplinary CPS projects in the region. 
• Asia Pacific is anticipated to hold a market share of 35% in 2024 with developments of AI and digital twins’ technology.

Market Attributes	Key Insights
Cyber-Physical Systems (CPS) Market Size (2024E)	US$ 111.21 Bn
Projected Market Value (2031F)	US$ 277.01 Bn
Global Market Growth Rate (CAGR 2024 to 2031)	13.9%
Historical Market Growth Rate (CAGR 2019 to 2023)	10.6%

Rise in Multidisciplinary CPS Projects in North America Caters Modernization

North America is predicted to lead the technology sector, accounting for 30% of the market share in 2024. This region is projected to register a CAGR of 11.1% in forecast period due to superior technology, robust research and development, and significant firms such as Microsoft, IBM, and General Electric.

North America leads in multidisciplinary CPS projects, enhancing system robustness and scalability in sectors like healthcare, automotive, and energy management, with IBM launching AI-integrated predictive maintenance solutions in February 2024. Government and commercial sector investments in smart infrastructure and IoT technologies are being leveraged by North America, a global leader in CPS innovation and adoption.

Asia Pacific Cyber-Physical Systems (CPS) Market Emerges Lucrative with Advancement in Smart Infrastructure

Asia Pacific is poised to hold 35% of the global CPS market, driven by industrialization, smart infrastructure investments, and advanced technologies like IoT and AI. In terms of incorporating CPS into important industries like manufacturing, automotive, and energy, China, India, and Japan are making notable strides. For instance,

• In March 2024, India's National Smart Grid Mission announced expanded investments in CPS-enabled smart grid technologies to enhance energy distribution and monitoring.

In order to promote future growth, the automotive sector in Japan is using CPS for the development of autonomous vehicles placing a high priority on sustainability and efficiency in sector 4.0 and digital transformation.

Adoption of Closed Loops Opens up Prospects for Industrial Development

Closed loop systems dominated the CPS market, accounting for 62% of the global share in 2024 despite the market being segmented into open loop and closed loop systems. Closed loop CPS, which incorporates real-time feedback, is extensively utilized in industries like manufacturing, healthcare, and automotive to improve accuracy, flexibility, and intelligent decision-making, hence increasing operational efficiency.

• Siemens introduced an advanced closed loop CPS in March 2024, enhancing production efficiency by 20% through AI-powered feedback loops.
• Medtronic introduced a closed loop CPS in healthcare devices in July 2024, improving real-time patient monitoring and precise medication delivery, thereby reducing medical errors by 15%.

The demand for automation and real-time system optimization is driving the adoption of closed loop CPS, making it a component of modern industrial advancements.

Implementation of CPS in Manufacturing Remains a Step toward Digitalization

The manufacturing sector is projected to acquire market share of 28.9% in 2024, leveraging advanced technologies like IoT, AI, and machine learning for real-time monitoring and process optimization. Industry 4.0's smart manufacturing practices utilize CPS for predictive maintenance, automated quality control, and energy-efficient operations. For instance,

• Bosch introduced a predictive analytics platform in June 2024, which significantly enhanced machine uptime by 30%, thereby reducing unexpected downtime in production facilities.
• GE Digital has expanded its supply chain optimization solutions in September 2024, enabling manufacturers to better respond to market demands.

Using CPS in manufacturing promotes flexible, effective, and sustainable production methods that meet international standards, which is a step toward digital transformation.

Market Introduction and Trend Analysis

The demand for cyber-physical systems is expanding quickly due to the IoT ecosystem and the rising need for digital transformation. The cyber-physical systems (CPS) market is predicted to increase automation requirements in sectors such as manufacturing, healthcare, transportation, and critical infrastructure in 2024.

Advancements in sensors, network communications, and embedded computing are revolutionizing real-time monitoring and intelligent decision-making.

The need for CPS in the automotive, robotics, and aerospace industries is being driven by Industry 4.0 and autonomous systems, while AI and machine learning are becoming more popular due to higher expenditures on research and development.

The energy management and precision agricultural industries are adopting CPS at a notable rate thanks to smart city technologies like smart grids and intelligent transportation systems, which will facilitate future technical developments.

Historical Growth and Course Ahead

The global cyber-physical systems (CPS) market recorded a CAGR of 10.6% in the historical period from 2019 to 2023. Complex cyber-physical systems, such as sensors, gadgets, and data analytics platforms, can be difficult to integrate. This includes improved security, data management, and interoperability. Coordinating, testing, and preserving data integrity are all necessary for integration.

Businesses must make investments in human resources and infrastructure to handle this complexity. The risk of cyber-attacks rises with the number of devices and systems linked, making proper cybersecurity measures necessary. Demand for CPS is estimated to record a considerable CAGR of 13.9% during the forecast period between 2024 and 2031.

Market Growth Drivers

Trend of Industrial Automation Boost the Smart Production

The manufacturing, automotive, and process sectors benefit from increased efficiency, productivity, and accuracy due to industrial automation, which is fueling the demand for cyber-physical systems' anticipated 9.3% yearly growth in 2024.

Predictive maintenance and real-time asset monitoring are two examples of advanced automation systems that are transforming businesses by improving operational performance, minimizing downtime, and allocating resources optimally.

Smart factories, utilizing IoT sensors, AI, and CPS technologies, are revolutionizing manufacturing by enhancing decision-making and streamlining production processes. Operating expenses are expected to drop by up to 30% because of Siemens' January 2024 push to include AI-driven predictive maintenance to its automation portfolio.

The automotive sector is using CPS for smart manufacturing and autonomous driving, which is driving cyber-physical systems (CPS) market expansion and encouraging flexibility, adaptation, and cost reductions in industrial operations.

Integration of AI and ML Drive Technology Innovations

AI is influencing computerized physical systems by improving data processing, decision-making, and autonomous task execution.

• According to a 2024 research report, GE uses AI-enabled data analytics to monitor industrial gear, anticipate breakdowns, and guarantee smooth operations, decreasing unplanned downtime by up to 20%.

Smart manufacturing AI-powered CPS systems include machine learning algorithms for real-time modifications and improved performance, extending equipment lifespan and cutting expenses.

• ABB's AI-driven CPS platform, launched in February 2024, automates complex industrial workflows, improving productivity by 15%, underscoring AI's crucial role in enhancing CPS capabilities and driving industry innovation.

Market Restraining Factors

Hefty Installation Price to Limit the Adoption in SMEs

The adoption of cyber-physical systems is hampered by issues such as expensive installation, difficult deployment procedures, and financial burdens on SMEs. For businesses with limited funding, advanced CPS solutions can be very difficult to implement as they sometimes need large upfront investments in infrastructure, software, and hardware.

• The typical cost of deploying a CPS solution in manufacturing is between US$ 500,000 and US$ 1 Mn, according to 2024 research, which deters SMEs from using CPS.

The complexity of CPS installations may make it difficult for SMEs to find qualified staff and knowledge in areas like embedded systems, IoT, and AI.

• According to Deloitte, a lack of trained workers will result in a 2.1 million worker shortfall in industrial automation tasks by 2025, forcing businesses and governments to implement training programs and subsidy schemes.
• Germany's Industry 4.0 Grant Program, launched in January 2024, provides financial aid and resources to SMEs to integrate CPS, aiming to bridge the adoption gap.

Key Market Opportunities

Improvements in Sustainable Energy Provides Key Opportunities

The emphasis on sustainable and renewable energy sources is presenting opportunities for cyber-physical solutions in smart grids and energy storage solutions.  Smart grids powered by CPS enable real-time energy monitoring, improve grid reliability, and facilitate the integration of renewable energy sources like solar and wind.

Smart grids utilize CPS solutions to predict demand patterns, optimize energy distribution, and reduce energy waste, thereby achieving sustainability goals. For instance,

• General Electric's Digital Energy CPS platform, launched in March 2024, provides utilities with improved grid visibility and operational efficiency.
• Tesla introduced an AI-driven CPS in June 2024 for energy storage, aiming for efficient battery management in renewable energy setups, ensuring energy reliability and cost-effectiveness.

Emergent IoT Ecosystem Gives Rise to Openings for Advanced CPS Implementations

The IoT ecosystem is enabling smooth communication between digital and physical devices, transforming cyber-physical systems. As 29 billion IoT devices are anticipated to be linked by 2025, CPS deployments are growing increasingly complex across sectors including manufacturing, healthcare, and transportation.

Real-time data collecting, predictive analytics, and autonomous decision-making are made possible by IoT devices, which boost productivity and creativity. For instance,

• Siemens introduced its IoT-enabled CPS platform in October 2024, providing predictive maintenance and energy efficiency solutions for smart factories.
• ABB's IoT-CPS suite, launched in July 2024, improves asset management in power grids, industrial automation, and smart cities, enhancing productivity, reducing downtime, and adapting to data-driven future.

Competitive Landscape for the Cyber-Physical Systems (CPS) Market

The cyber-physical system industry is dominated by leading technological companies, with top manufacturers investing extensively in research and development to broaden its application base. Core technologies like AI, IoT, and machine learning are also being advanced by these businesses.

New players are growing their clientele and speeding up business change. In an effort to grow their market share, CPS vendors are working with academic institutions and solution providers. This collaboration is resulting in quicker development cycles, information exchange, and platform integration for all-inclusive CPS solutions.

Recent Industry Developments

• In November 2024, IIT Ropar and CCCT Sikkim launched AWaDH Cyber-Physical Systems Lab in Northeast India, integrating IoT kits, environmental sensors, and advanced tools for education, research, and entrepreneurship.
• In May 2024, TXOne Networks secured US$ 51 Mn in its Series B extension round of financing, securing industrial control systems and operational technology environments. The company works with leading manufacturers and critical infrastructure operators to develop practical cyber defense approaches.
• In April 2024, Purdue University researchers launched a US$ 6.5 Mn project, FIREFLY, to enhance cyber-physical systems (CPS) for mission-critical applications. The multidisciplinary project aims to make systems more robust, scalable, and effective, exposing system-of-systems weaknesses that could lead to disruption, damage, or loss of life.
• In March 2024, Claroty introduced the Advanced Anomaly Threat Detection Module to enhance cybersecurity in healthcare organizations, addressing gaps in device security and providing clinical context for threat assessment.
• In March 2024, IIT Kharagpur launched an MTech course in Artificial Intelligence (AI) under the National Mission on Interdisciplinary Cyber-Physical Systems (NM-ICPS). The course is divided into four semesters, with the first two semesters focusing on theory courses and electives.
• In November 2023, NetRise introduced Trace, an AI-powered semantic search for software supply chain security, revolutionizing vulnerability detection and validation by highlighting affected assets and files in natural language.

Cyber-Physical Systems (CPS) Market Report Scope

Attributes	Details
Forecast Period	2024 to 2031
Historical Data Available for	2019 to 2023
Market Analysis	US$ Billion for Value
Key Regions Covered	North America Europe East Asia South Asia and Oceania The Middle East and Africa Latin America
Key Market Segments Covered	Component Type Vertical Region
Key Companies Profiled in the Report	ABB Group Siemens AG General Electric  Rockwell Automation Honeywell International Bosch Rexroth Schneider Electric Mitsubishi Electric Intel Corporation Cisco Systems Samsung Electronics Hitachi, Ltd.
Report Coverage	Market Forecast and Trends Company Share Analysis Competitive Intelligence DROT Analysis Market Dynamics and Challenges Strategic Growth Initiatives
Customization and Pricing	Available upon request

Cyber-Physical Systems Market (CPS) Segmentation

By Component   

• Hardware
  • Sensors
  • Actuators
  • Computational Nodes
  • Others
• Software
• Services

By Type

• Open loop
• Closed loop

By Vertical   

• Healthcare
• Manufacturing
• Automotive
• Agriculture
• Energy and Utilities
• Aerospace and Defense
• Others

By Region

• North America
• Europe
• Asia Pacific
• Latin America
• The Middle East and Africa

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