Rise of Finance 4.0 predicted to boost equipment manufacturer sales as $1 trillion market emerges

The emerging marketplace for Industry 4.0 technology is predicted to grow from $66 billion in 2016 to $214 billion by 2023, before reaching $1 trillion by the early 2030s, not including the value of retrofit technology.

As a result, demand is growing for financing solutions that enable the acquisition of new generation technology.

A global survey of manufacturing technology companies by Siemens Financial Services looked at how offering integrated financing options would boost client demand for new technologies.

It found that manufacturers are either experiencing, or expect to experience, a 25-35% uplift in sales over a five-year period through integrated finance, dubbed Finance 4.0 to reflect its role in supporting the changing industrial landscape.

Finance requirements range from a single connected piece of equipment, to funding a whole new factory, to even acquiring a competitor.

Brian Foster, head of industry finance at Siemens Financial Services, said: “Finance 4.0 arrangements tend to be offered by specialist providers that have a deep understanding of how the digitalised technology works and how that technology can be practically implemented to deliver the efficiency, productivity and competitive benefits of digitalisation.

“At best, the financing arrangement will be an embedded part of the value proposition, offered right at the beginning of the customer discussion on requirements. Complete solutions should be taken into consideration in order to identify the best financial package to effectively digitalise a manufacturing facility’s entire operation – from equipment to software to production line to the full enterprise.”

For the research, executives at 31 international OEMs of digitally enabled manufacturing technology from the USA, Europe, UK and China were interviewed.

Siemens Financial Services is part of global technology company Siemens, which provides solutions ranging from technology to infrastructure and automation. It employs around 379,000 people and last year had revenues of €83 billion ($94 billion) and net income of €6.1 billion ($6.9 billion). 

Siemens was listed in 13th place in the 2019 AF50 UK listing of the country’s largest asst finance companies, based on net investment in business equipment leasing, and in 21st place in the 2018 AF50 Europe.