As the curtain closes on a pivotal year for the manufacturing sector, we spotlight the major global trends that shaped the industry in 2024. This year has presented significant challenges for manufacturing CEOs, including ongoing economic uncertainty, rising costs, skilled labour shortages, supply chain disruptions, and technological disruption. The industry also faced a sharp increase in cyberattacks with double the number of ransomware attacks involving extortion, costing manufacturers nearly $2.4 million in the last year, according to Industry Update.
Despite these difficulties, this year, CEOs demonstrated a commitment to transformation, innovation, and the acceleration of smart manufacturing practices, as well as a growing focus on sustainability. The industry has heightened its focus on digital transformation, AI, and operational efficiency, indicating that the industry is getting ready for further growth and innovation in the year ahead.
In 2024, CEOs have been empowered to innovate through technology. A report by Gartner indicates that over 50 per cent of manufacturers increased their technology spending in 2024 to address their most pressing challenges, including talent shortages, which remains a top concern for 35 percent of respondents. Moreover, the transition to more sustainable practices is gaining momentum within the industry, with Deloitte reporting that over half of businesses, particularly in the industrial sector, are moving towards greener processes in the coming years.
As this transformative year comes to a close, manufacturing CEOs can expect to face many of these same challenges as they transition into 2025. As leaders prepare for the upcoming year, it’s essential to pause and reflect on the key trends of 2024 and assess the industry’s progress across various areas to strategically plan for what lies ahead.
A year in review – AI, the digitalised supply chain and more
When reviewing the year that has been, it’s interesting to see how accurately our top five predicted manufacturing trends have unfolded. These trends include closing the sustainability gap, the surge in generative AI (GenAI) innovation, the urgent need to address regulatory compliance, enhancing cybersecurity with advanced solutions, and embracing a digitalised supply chain. Throughout the year, discussions and priorities within the industry have consistently focused on many of these important topics.
Businesses accelerated their efforts to close the sustainability gap but just not rapidly enough, as evidenced at COP29, where ministers and leaders were told to ‘move faster’ and ‘get down to business.’ This year, the annual bureaucratic spectacle may not have been as effective or had the attendance as it did previously, but in this area, this sentiment is spot on.
As for our other trends, compliance and cybersecurity remain top areas of focus – no surprise there. But what we did find interesting was that the buzz phrase “digitalised supply chain” almost all but disappeared from our news cycle. Just two years ago, it dominated discussions, but now it seems to have faded into obscurity. Why? The perceived maturity of digitalised supply chains, perhaps, and that the media and many C-Suites have moved on to AI. Although our GenAI trend proved accurate, we caution all CEOs to balance their enthusiasm in this area with knowledge and internal or external expertise – this is mission-critical, or the implementation of AI may fail.
Our 2024 trends to watch – were they right or wrong?
As CEOs continue to explore the best ways to implement AI and look ahead to what is to come, it’s time to revisit this year’s main trends to evaluate our accuracy. Below, we examine the trends that transformed the manufacturing sector, providing business leaders with insights on what to expect in the future landscape.
Trend 1 – Accelerating efforts to close the sustainability gap: NOT ACCURATE
While there has been a lot of talk on sustainability, and it has dominated the headlines, according to the 2024 Sustainable Development Goals Report, global progress towards sustainability goals is slow and worryingly inadequate, as highlighted by an US$4 trillion annual investment inequality in developing countries. Various challenges have stopped CEOs from putting their pedal to the sustainability metal, including investment hesitation. While our prediction around sustainability was accurate, unfortunately, not enough has been done to close the sustainability gap, and so in 2025, CEOs must urgently address the lack of leadership commitment and ambition-action gap to make significant green progress.
Trend 2 – Increasing use of GenAI to optimise automation: ACCURATE
The World Economic Forum reported that the global manufacturing AI market is valued at over US $3 billion in 2023, forecasting it to soar to over $20 billion by 2028. Savvy CEOs can leverage the synergy between AI and GenAI to enhance productivity and innovation. Specifically, GenAI can be utilised to optimise processes with advanced predictive algorithms to streamline automation. CEOs have also turned to GenAI for augmented strategic decision-making through advanced data analysis and scenario planning. We urge CEOs, however, not to become too reliant on GenAI and AI-powered tools and suggest they balance the power between GenAI and humans for maximised value.
Trend 3 – Keeping a closer eye on regulations and compliance: ACCURATE
In the U.S. alone, the National Association of Manufacturers has reported that the industrial sector faces an alarming number of regulations and restrictions, 297,696 to be exact. The list of new regulations grows every year, with many of the recent ones coming into effect in 2025, such as the EU’s Corporate Sustainability Due Diligence Directive (CSD) targeted at supply chains, the Buy America Act affecting global trade, and the EU Deforestation Regulation (EUDR). CEOs will need to continuously monitor this area of the business to ensure compliance and business viability for years to come.
Trend 4 – Bolstering cybersecurity efforts: ACCURATE
CEOs must ensure their businesses have a solid cybersecurity posture to guarantee their operations are safe from malicious actors. The manufacturing sector remains a popular target of cyberattacks, with IBM reporting that industrial businesses can lose, on average, US$5.56 million, but this number can soar well over US$200 million, as reported by Statista, highlighting the importance of cybersecurity this year and next. With the costs of attacks surging by 125 per cent each year, the World Economic Forum has warned that this must be a key area of focus for manufacturers.
Trend 5 – Enhancing the digitalised supply chain for better performance: NOT ACCURATE
As alluded to above, CEOs had started strong in digitalising their supply chains but have seemed to have lost interest for a variety of reasons, such as technological maturity, strategic shifts, and a focus on new challenges. Previously, supply chain digitalisation investments rapidly increased from 2020 to 2023 but have now levelled off. While some progress has been made, senior-level engagement in supply chain digitalisation is critical to safeguarding against future disruptions. Something that we recommend for top of the agenda in the new year.
The last word on 2024
CEOs have had to navigate more challenges than ever before in this last year. From the uncertainty of the political geosphere, economic uncertainty, rising costs, 和 talent shortages, trying to keep up with the acceleration of technology and keep their heads above water amid compliance changes. In 2025, we anticipate that many of the same challenges will continue, and new obstacles are likely to arise. However, we hope the new year will bring more innovative and pioneering efforts, elevating the sector to new smart manufacturing heights. We’ve seen many trends come and go, but we look forward to 2025, offering a fresh perspective and spurring a more eco future within our operations and the sector itself.
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