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8 Manufacturing Trends Emerging in 2025

8 Manufacturing Trends Emerging in 2025

January 29, 2025

The manufacturing industry is in the midst of a transformative period. Technological advancements are enabling unprecedented operational efficiencies and revealing previously hidden revenue opportunities. At the same time, manufacturers must contend with the baby boomer exodus, curb rising cyberthreats, and meet climate regulations.

ABI Research recently surveyed 461 manufacturers in the United States, Germany, and Singapore to better understand their challenges and how they plan to leverage technologies like Artificial Intelligence (AI) and 5G.

Eight influential trends we discovered include:

1. Digital transformation faces people-related barriers.
2. Generative AI improves industrial workers.
3. Private cellular networks become a mainstay.
4. Industrial Wi-Fi outpaces private cellular.
5. Manufacturers are increasing cybersecurity budgets.
6. Extended Reality (XR) is gaining traction.
7. Sustainability and ESG shape investments.
8. Data utilization faces a cultural and skills gap.

 

1. Digital Transformation Faces People-Related Barriers

Digital transformation requires new technological expertise and a shift in attitude toward technology adoption. However, many manufacturers lack the skills to effectively use novel solutions, and employees may not fully grasp their potential. This is particularly true for advanced technologies like Extended Reality (XR), Artificial Intelligence (AI), and digital twins.

Manufacturers will choose vendors that offer robust onboarding, training, and post-sales resources. These efforts are critical for aligning digital transformation initiatives with commercial objectives and ensuring a smooth transition to new technologies.

 

chart-people-relate-challenges
(Source: ABI Research, PT-3335)

 

2. Gen AI Improves Industrial Workforces

Generative Artificial Intelligence (Gen AI) is playing a crucial role in addressing workforce challenges in manufacturing. From personalized training programs to knowledge management systems, Gen AI is helping businesses upskill employees and close knowledge gaps. For example, dynamic onboarding tools and microlearning platforms are being enhanced with Gen AI, making training more engaging and effective.

Additionally, Gen AI’s ability to quickly analyze data allows manufacturers to perform root cause analysis and identify operational bottlenecks with greater speed and precision. This time-saving feature helps minimize production downtime.

 

chart-top-gen-ai-use-cases-manufacturing
(Source: ABI Research, PT-3336​)

 

3. Private Cellular Networks Become a Mainstay

Private 4G and 5G networks are no longer an abstract concept—they are now the connectivity backbone of manufacturers’ digital transformation journeys. While 4G enjoys widespread deployment due to its mature ecosystem, 5G is gaining traction for high-performance use cases like robotics, real-time automation, and predictive maintenance. Moreover, manufacturing firms appreciate much-needed benefits like high reliability and enhanced security.

Large organizations with extensive resources are more likely to be scaling private cellular networks, while mid-sized firms are moving past the Proof of Concept (PoC) stage. Smaller businesses remain cautious due to concerns about cost and device availability. However, regulatory efforts like the Federal Communication Commission’s (FCC) Citizen Radio Broadband Service (CBRS) in the United States and spectrum allocations in Germany are encouraging broader adoption.

 

chart-private-cellular-maturity

(Source: ABI Research, PT-3316​)

 

4. Industrial Wi-Fi Outpaces Private 5G

Although private cellular investments are trending upward, Wi-Fi continues to lead as the go-to connectivity solution for industrial environments in 2025. Familiarity with Wireless Local Area Network (WLAN) technology among Information Technology (IT) professionals and favorable FCC policies—like the allocation of the 6 GHz spectrum—have contributed to its widespread adoption in manufacturing environments.

Although WLAN currently faces challenges, such as insufficient unlicensed spectrum and limited capabilities for ultra-low-latency applications, innovations like Wi-Fi 6 and Wi-Fi 7 are tightening performance gaps. For smaller manufacturers, Network-as-a-Service (NaaS) business models are enabling WLAN adoption by converting upfront capital expenses into manageable operating costs.

(Source: ABI Research, PT-3318​)

 

5. Manufacturers Increasing Cybersecurity Budgets

Increased connectivity in manufacturing environments elevates the risk of cyberattacks occurring. For example, a recent survey conducted by ABI Research and Palo Alto Networks found that 76% of industrial firms have experienced a cyberattack within their Operational Technology (OT) environments. Data loss, staff safety, regulatory fines, intellectual property theft, and system vulnerabilities top the list of cybersecurity concerns. Manufacturers in 2025 are particularly worried about the reputational damage and financial losses that follow an attack. In many cases, manufacturers do not even disclose a breach unless required to by law due to fears of losing customers’ trust.

In addressing the cyberthreat, network segmentation tools and Operational Technology (OT) firewalls are among the most significant areas of investment. Manufacturers are adopting these tools to ensure robust threat detection, secure sensitive data, and protect critical systems.

Network visibility software remains a particularly hyper-focus area, helping organizations monitor, detect, and respond to threats effectively. With OT cybersecurity markets projected to grow at a 12% Compound Annual Growth Rate (CAGR) through 2028, this trend will shape security strategies for years to come.

 

chart-ot-cybersecurity-revenue
(Source: ABI Research, PT-3317​)

 

6. Extended Reality (XR) Is Gaining Traction

Immersive technologies, such as Augmented Reality (AR) and Virtual Reality (VR), are transitioning from the curiosity stage to real-world implementation. Manufacturers are using XR to create an industrial metaverse aimed at minimizing downtime, accelerating product development, cutting travel costs, and enhancing worker training. For example, automakers use XR to connect geographically dispersed teams and simulate the functionality of virtual vehicle prototypes.

Despite its known value, XR deployment at scale remains elusive. According to ABI Research survey results, most manufacturers are at the evaluation or Proof of Concept (PoC) level.

It is our understanding that smaller manufacturers are more likely to adopt XR technologies as they face fewer barriers and see a higher impact per employee. Conversely, larger organizations are taking a more cautious approach toward XR adoption, focusing on more apparent Return on Investment (ROI) and overcoming workforce resistance to change.

 

chart-smart-glasses-shipments
(Source: ABI Research, PT-3335​)

 

7. Sustainability and ESG Shape Investments

Environmental, Social, and Governance (ESG) goals are becoming a top priority for manufacturers. Gen AI, Machine Learning (ML), and Natural Language Processing (NLP) tools are helping companies collect and analyze ESG data, automate compliance, generate reports, and create comprehensive decarbonization strategies.

AI technologies also allow manufacturers to design products with sustainability in mind. For example, Microsoft has integrated Makersite’s technology into its Life Cycle Assessment (LCA). AI analyzes various supply chain-specific data (e.g., Bill of Materials (BOM), material composition, etc.) to accurately measure a device’s environmental impact. This, in turn, enables Microsoft to identify areas where eco-friendliness can be incorporated. In 2 years, Microsoft reduced its carbon footprint for the Surface Pro 10 by 28% using Makersite’s LCA tools.

ABI Research expects similar deployments to increase in frequency as ESG regulations push manufacturers in major economies to decarbonize.

(Source: ABI Research, PT-3336)

 

8. Data Utilization Faces a Cultural and Skills Gap

Manufacturers are increasingly investing in advanced data collection and analytics tools, with over 70% of both process and discrete manufacturers having Application Programming Interfaces (APIs). However, many still struggle to fully leverage their data. Only 57% of discrete manufacturers and 53% of process manufacturers can use analytics effectively to solve business challenges like root cause analysis.

The primary obstacle is cultural readiness—less than half of manufacturers report having staff who truly appreciate the value of data. Bridging this gap will require better data literacy programs, enhanced training initiatives, and targeted vendor support.

(Source: ABI Research, PT-3382)

 

Reflections and Future Outlook of the Manufacturing Industry

The year 2025 will be big for technological adoption in manufacturing. AI tools are maturing to target specific use cases, unlocking boundless opportunities to drive efficiencies and meet other business goals. Currently, manufacturers require advanced connectivity infrastructure to power AI, robotics, XR, and other Industry 4.0 solutions.

Fully embracing these trends ensures that manufacturers can manage ongoing challenges and maximize growth potential. For organizations looking to thrive in this dynamic environment, the key will be balancing innovation with practical implementation. Partnering with knowledgeable vendors, investing in workforce education, and adopting scalable technologies will be crucial for digital transformation.

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Tags: Industrial & Manufacturing Technologies, Hybrid Cloud & 5G Markets, OT Cybersecurity, Industrial & Manufacturing Markets, Industrial, Extended Reality (XR) Markets, Wi-Fi & WLAN Technologies & Markets, AI & Machine Learning, Extended Reality (XR) Technologies