Data Annotation Tools Market to Grow Spontaneously at a Healthy CAGR During Forecast Period

Introduction

A data annotation tool is a software solution that may be used to annotate production-grade training data for machine learning. It can be cloud-based, on-premise, or containerized. At the same time, some businesses prefer to construct their tools, numerous data annotation solutions accessible as open-source or freemium.

Commercially, they are available for lease and purchase. Image, video, text, audio, spreadsheet, and sensor data annotation tools are all built to work with certain forms of data. They also provide many deployment options, such as on-premise, container, SaaS (cloud), and Kubernetes.

Rapid Penetration of AI and Generation of Big Data to Drive the Data Annotation Tools Market

Annotation of data is expected to play a crucial role in enhancing AI applications in healthcare. In medical imaging data technologies, AI-powered computers employ machine vision or computer vision to recognize patterns and identify probable ailments, supporting medical practitioners in automatically writing reports once the subject has been assessed.

The AI can quickly scan a library of CT scans, MRI scans, and X-Ray images to detect various injuries. Data annotation tools assist AI systems in distinguishing data obtained from average and wounded medical photographs to build the final reports of the examined individuals. As a result, data annotation is expected to play a crucial role in advancing AI applications in the healthcare business.

The key advantage of using annotation tools is that they allow users to manage data definition by combining data properties, reducing the need to rewrite comparable rules on several sites. The rise of big data and the spread of massive datasets will almost probably necessitate artificial intelligence technology in data annotation.

Technologies like machine learning, internet of things (IoT) robotics, advanced predictive analytics, and Artificial Intelligence generate massive amounts of data (AI). Data efficiency becomes more crucial as technology advances, enabling new business innovations, infrastructure, and economics. These factors have supported the industry's growth significantly. Because of the increased scope of growth in data labeling, companies developing AI-enabled healthcare apps collaborate with data annotation companies to supply the necessary data sets to help them improve their machine learning and deep learning skills.

Thus, the rapid adoption of artificial intelligence (AI) across various verticals, particularly in the healthcare sector, and the generation of big data via advanced technologies are likely to drive the data annotation tools market throughout the forecast period.

Growing Adoption of Data Annotation Tools by Corporations to Create Growth Opportunities

Market growth is fueled by the efficiency of automated data annotation tools and the growing usage of cloud-based computing resources to annotate enormous datasets. Two additional crucial elements that can move the industry forward in the near future are businesses' usage of data annotation tools for their correctness and labeling enormous volumes of AI training data.

Managing employees and data has always been a challenge for businesses. The adoption of data annotation tools supports businesses in resolving these issues. Every data annotation tool, including those that lead with AI-based automation, is built to be utilized by a human workforce. As a result, top systems will include task assignment and productivity analytics, which track how much time is spent on each job or subtask.

Thus, during the forecast period, the growing adoption of data annotation tools by corporations for data management and workforce management will likely provide good growth possibilities for prominent players in the market.

Impact of COVID-19

The COVID-19 pandemic considerably boosted the global data annotation tools industry. Machine learning and artificial intelligence technologies were predicted to increase the demand for data annotation tools over the COVID-19 era. During the pandemic's early stages, growth in-text annotation for document classification has also been cited as a crucial factor propelling the market.

Artificial intelligence and machine learning were going to be actively used in the healthcare industry to develop new technology to tackle viruses such as the corona. Furthermore, activities such as lung dataset preparation to examine the impact of the disease on the lungs are expected to supplement the data annotation business, which began during the COVID era. On the contrary, a lack of expertise and skilled personnel inhibited the proper execution of operations, affecting the market.

As the outbreak passes, the global market's recovery may be delayed by skilled professionals and workers. However, factors such as the rising adoption of artificial intelligence across many sectors and the collection of large amounts of data due to improved technology implementation will continue to drive the market further. As a result, the global data annotation tools market will quickly recover.

Regional Insights

North America, Europe, Asia-Pacific, South America, and the Middle East and Africa make up the market's five regions. The Asia Pacific and North America are the two most important markets for data annotation tools. China and India dominate the Asian market. Emerging economies in the Asia Pacific area have a lot of potential for data annotation tool adoption, especially in healthcare and financial services.

The use of technology and creative healthcare access programs are driving the expansion of the healthcare industry in the Asia Pacific area. These factors are expected to increase demand for image data annotation technologies in the near future in this region.

North America is likely to be the second-largest data annotation tools market, with an expected market value of USD 1,392 million by 2030. The United States and Canada are increasing their investments in new industrial technologies. Technological improvements have advanced the concept of data annotation tools. The health, industrial, and automotive industries in North America are witnessing tremendous investment, with further growth expected. This is due to market players' aggressive product and regional growth methods to gain a competitive advantage.

Over the forecast period, the European market is expected to increase at a stable pace. In addition, the growing emphasis on picture annotation is expected to improve the operations of the retail and automotive verticals in Europe.

Business digitalization across Latin America and the Middle East and Africa have far-reaching ramifications for regional economies, education, and employment, among other things. The Gulf Cooperation Council (GCC) countries are paving regional technological adoption and digital transformation. For example, Saudi Arabia's 2030 Strategy and National Transformation Program (NTP) 2020 places a high priority on digital transformation to generate private-sector jobs and embrace partnerships. Such a fast-rising economy will likely provide unparalleled market potential during the forecast period.

Key Highlights

• The global data annotation tools market size was valued at USD 2.27 billion in 2023. It is projected to reach from USD 2.87 billion in 2024 to USD 18.85 billion by 2032, growing at a CAGR of 26.50% during the forecast period (2024–2032).
• By type, the image/video type segment is expected to reach USD 1,840 million by 2030.
• By annotation type, the automatic annotation type segment is expected to dominate the global market by 2030.
• By vertical, the healthcare vertical segment is expected to dominate the global market by 2030.
• The global data annotation tools market is geographically divided into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa. Asia-Pacific and North America were the two significant regional markets in 2021.

Competitive Players

1. Appen Limited
2. Annotate
3. CloudApp
4. Cogito Tech LLC
5. Deep Systems
6. LightTag
7. Labelbox Inc
8. Lotus Quality Assurance
9. Playment Inc
10. Tagtog Sp.
11. CloudFactory Limited
12. ClickWorker GmbH
13. Alegion
14. Figure Eight Inc.
15. Amazon Mechanical Turk, Inc
16. Explosion AI Gmbh
17. Mighty AI, Inc
18. Trilldata Technologies Pvt Ltd
19. Scale AI, Inc.
20. Google LLC
21. Lionbridge Technologies, Inc
22. SuperAnnotate LLC.

Recent Developments

• In November 2022, To create a speech-based healthcare FAQ bot for Sheng, a Nairobi slang language, Appen Limited (ASX: APX), the world leader in data for the AI Lifecycle, announced its collaboration with CLEAR Global, a nonprofit that helps people get essential information and be heard, regardless of the language they speak.
• In November 2022, the Launch of a Japan-based Team by Appen, a Leader in AI Development with World-Class Training Data, is Intended to Speed Up Growth in the Japanese Market.
• In December 2022, An open-source Kafka Connector for Pub/Sub and Pub/Sub Lite that is first-party supported by Google Cloud is now generally accessible. 
• In November 2022, To provide a platform for next-generation consumer data with an emphasis on privacy, security, and compliance, Zeotap teamed with Google Cloud.

Segmentation

1. By Type
   1. Text
   2. Image/Video
   3. Audio
2. By Annotation Type
   1. Manual
   2. Semi-Supervised
   3. Automatic
3. By Vertical
   1. IT
   2. Automotive
   3. Government
   4. Healthcare
   5. Financial Services
   6. Retail
   7. Others