Global Data Annotation Tools Market Overview
The key driver impacting the data annotation tools market is the rising investments in the development of self-driving vehicles globally. For instance, In 2018, Audi declared to invest $16B in self-driving and sustainable technology by 2023. In August 2018, Toyota funded USD 500 million in Advanced Technologies Group (ATG). It is a segment of Uber that majorly focuses self-driving car program which develops autonomous taxis. In 2019, Uber Advanced Technologies Group raised about $1 billion for the Uber driverless cars business from three investors of Japan: Toyota, Softbank’s Vision Fund, and auto-parts maker Denso. In Dec 2020, China’s most-funded startups known as We Ride, developed autonomous driving capabilities, had raised $200 million from Chinese bus maker Yutong. Moreover, the growing applications of data annotation across various industries such as automotive, healthcare, medical imaging, the robotics industry is adding growth to the market in the coming years.
According to Value Market Research, the global data annotation tools market size was valued at around USD 390 million in 2020 and is estimated to grow at a CAGR of about 25% during the forecast period 2021 to 2027.
The massive adoption of advanced technologies such as machine learning, the internet of things (IoT), artificial intelligence is estimated to augment data annotation tools needs in the forecast period. For example, expanding preference for Artificial Intelligence (AI)-based solutions such as Chatbot, Intelligent Virtual Assistant (IVA), and IVR to offer enhanced customer support services is likely to create massive demand for data annotation tools. For instance, As per the Website Builder, About 69% of the public prefer to utilize a chatbot than a company’s official app, and 63% trust chatbots with their most sensitive information. Globally 80% of companies plan to deploy several types of chatbots by 2020, and Chatbots are expected to help decrease business costs by up to $8 billion by the year 2022. Also, 43% of those who use digital banking services prefer using chatbots or live chat to deal with their problems. Data annotation will give chatbots the capabilities to accurately react to a question, whether it is vocalized or typed, improve search relevance, and assist in train chatbots. However, lack of skilled labor and high costs associated with manual annotation of complex images may hamper the market in the long run. Also, inaccuracies in data annotation tools are negatively impacting the market. The current industry trends, such as the growing adoption of data annotation for medical imaging data and the rising trend of image/video annotation for entity recognition, are likely to provide market players with new market opportunities.
The Data annotation tools market is vast, with many local and global players. The Data annotation tools market is extensive, with many international and regional players. The key market leaders follow various strategies to advance their market statuses, such as amalgamation, extending product portfolio by raising funds, contracts, product upgrades, and acquisitions to enlarge their market share across the globe. For instance, in August 2018, Scale Inc., a U.S.-based company providing data annotation tools and solutions, declared that it had raised funds worth USD 18 million to label data congregated by companies developing self-driving cars, such as Lyft, Inc. and General Motors. The key players studied in the report are Appen Limited, Cogito Tech LLC, Deep Systems, Labelbox, Inc., LightTag, Playment Inc., CloudFactory Limited, Clickworker Gmbh, Alegion, Figure Eight Inc., Amazon Mechanical Turk, Inc.
In this research report, the Data annotation tools market is segmented by Type, annotation type, vertical, and region.
Analysis by Type:
By type, the report is categorized into text, image/video, and audio. Text dominates the type segment with over 37.5% share in 2020. It is due to the rising applications in e-commerce and clinical research. Moreover, the growing popularity of chatbots and rising market players operating in the data annotation tools market that provides text annotation tools contribute to the high demand for text annotation tools in the forecast period.
Analysis by Annotation Type:
By annotation type, the report is segmented into manual, semi-supervised, and automatic. Manuals dominate the annotation type segment with a 35% share in 2020. It is due to the growing popularity of manual annotation tools as compared to automatic annotation tools. Manual annotation tools offer advantages such as a high level of integrity, accuracy, and a higher chance of discovering intriguing insights about the data than automatic annotation tools, which can later integrate into an algorithm. Moreover, the rising need for minimal administration of data annotation efforts contributes to increased market demand in the forecast period.
Analysis by Vertical:
By verticals, the report is categorized into IT, automotive, government, healthcare, financial services, retail, and others. The Automotive segment dominates the verticals segment with a 30% share in 2020. It is due to the rapidly growing self-driving vehicles sector across the globe. Moreover, the increasing R&D spending on the improvement of image annotation for the developments in self-driving vehicles contributes to the enormous market demand from Automotive industries in the forecast period.
Analysis by Region:
In the regional outlook of the global data annotation tools market, the North America region dominates globally with a 30% market share in the forecast period. It is due to the early adoption of advanced technologies like artificial intelligence, machine learning, robotics technology, and the presence of key players in the United States, Mexico, and Canada. Also, the high adoption of data annotation tools across the healthcare and automotive sectors positively impacts the regional market growth. Moreover, the high-disposable income consumers create demand for smart products and services that employ data annotation tools, thus contributing to market growth across North America.
Market Segmentation covered in the Report:
By Annotation Type
- Financial Services
- North America
- Asia Pacific
- Latin America
- Middle East and Africa
This market research report has been produced by gathering information on the basis of primary and secondary research. Secondary research has been done by using various sources which include (but not limited to) Company Websites, Paid Data Sources, Technical Journals, Financial Reports, SEC Filings, and other different industry publications.
If specific information is required which is not currently within the scope of the report, it can be provided as a part of customization.