The Total Addressable Market (TAM) for Laboratory Informatics was valued at USD 3.27 billion in 2022. It is projected to reach USD 4.90 billion by 2031, growing at a CAGR of 4.6% during the forecast period (2023–2031).
By leveraging a system of instruments, software, and data management tools, laboratory informatics aims to improve and expand laboratory operations. It improves the effectiveness of laboratory operations by facilitating the collection, migration, processing, and interpretation of scientific data for immediate use, as well as storage, management, and sharing of such data to support future research, development, and laboratory testing. One of the most rapidly developing areas of laboratory technology is laboratory informatics. Laboratory informatics focuses on the tools involved in the information management process, which remains crucial. Maintaining a competitive edge is made possible by laboratory informatics, which offers secure, dependable, and extensible data management systems.
Increasing Need for Laboratory Automation
An increasing number of laboratories are turning to automation to address the skills gap and decrease the need for human involvement in routine laboratory procedures. Automating mundane laboratory tasks, and using dedicated workstations and software to program instruments, boosts lab productivity and frees up time for individual researchers to focus on more meaningful projects. Automation provides high-quality data and facilitates better documentation. Standardized systems with reproducible results are easier to create when supervisory standards and strict regulatory requirements for error-free results are in place. The need for adequate data storage, analysis, and sharing methods has arisen due to the exponential growth of data produced by laboratory systems. Laboratory informatics solutions effectively respond to this demand by significantly facilitating, advancing, and improving laboratory process productivity and efficiency.
High Maintenance and Service Cost
One of the major factors restraining growth in this market is the high maintenance and service costs associated with laboratory informatics solutions. Maintenance fees for IT solutions, say experts, can add up to more than the software's initial cost. Almost 20-30% of the total cost of ownership is attributable to the recurring costs of service and maintenance (which includes modifying the software to meet evolving user requirements). Additionally, training and implementation expenses inflate the total cost by about 15%. The inability of many smaller and medium-sized labs to afford such systems is a major barrier to their large-scale implementation.
Significant Growth Potential in Emerging Countries
Major emerging markets for LIMS include China, Japan, India, Singapore, Brazil, and the Middle East. The United States and other developed countries have strict norms and regulations that businesses must adhere to succeed. Many major pharmaceutical companies have relocated their factories to China and other Asian countries for lower labor costs. As a result, there is a growing need for sophisticated IT services across Asia. The COVID-19 pandemic has, however, compelled stakeholders in developed markets like the United States and Europe to revert to more self-sufficient production methods.
The global laboratory informatics market is segmented by product, delivery mode, component, and end-use.
Based on product, the global laboratory informatics market is bifurcated into laboratory information management systems (LIMS), electronic lab notebooks (ELN), scientific data management systems (SDMS), laboratory execution systems (LES), electronic data capture (EDC) and clinical data management systems (CDMS), chromatography data systems (CDS), enterprise content management (ECM).
The laboratory information management systems (LIMS) segment is the highest contributor to the market and is expected to grow during the forecast period. The system allows users to manage master data, conduct sample lifecycle analysis, conduct reliability research, administer the system and its security, and manage schedules, inventory, equipment, logistics, storage, and an analytical workflow. The segment expands due to rising demand for fully integrated services in the life sciences and research industries to reduce data processing errors. The growth of this market segment is anticipated to be driven by rising demand for comprehensive services in the life sciences and research sectors. The latter seeks to reduce data management inaccuracies and enhance the quality of qualitative research data analysis.
Based on delivery mode, the global laboratory informatics market is bifurcated into on-premise, web-hosted, and cloud-based.
The cloud-based segment is the highest contributor to the market and is expected to grow during the forecast period. As virtualization technology improves and faster internet becomes more widely accessible, the cloud-based sector is expected to expand faster than any other. Using cloud computing, users can offload data storage needs and free up valuable device storage while still having easy access to their data whenever needed. Additionally fueling the segment's expansion is cloud-based laboratory informatics eradicating the need for hefty capital investments in infrastructure while facilitating swift and secure data transfer within organizations.
Based on component, the global laboratory informatics market is bifurcated into software and services.
The services segment is the highest contributor to the market and is expected to grow during the forecast period. Many pharmaceutical R&D facilities lack in-house analytics expertise and the means to implement the technology, leading to increased outsourcing. Using the internet and web-based services allows researchers to access even the most inaccessible regions with just a single computer or monitoring device in the lab.
Based on end-use, the global laboratory informatics market is bifurcated into life sciences industry, food and beverage, agriculture industry, petrochemical refineries, oil and gas industry, chemical industry, and environmental testing laboratories.
The life sciences industry segment is the highest contributor to the market and is expected to grow during the forecast period. Bio banks, Molecular Diagnostic and Clinical Research Laboratories, CROs, Biotech and Pharmaceutical Companies, and Universities all fall under this category. The life sciences industry is experiencing a rise in the need for laboratory informatics due to the pursuit of novel product development and the enhancement of product quality and operational efficacy. More and more electronic and virtual labs are needed to meet these demands. The use of laboratory informatics systems facilitates the efficient management of massive datasets and the elimination of barriers to interdisciplinary study and discoveries.
The global laboratory informatics market is bifurcated into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.
North America Dominates the Global Market
North America is the most significant shareholder in the global laboratory informatics market and is expected to grow during the forecast period. The regional market is being pushed forward by rising healthcare costs and the rising popularity of LIMS. Market expansion in the region can also be attributed to the prevalence of large pharmaceutical corporations and the increasing pressure to rein in the expenses inherent to data management and analysis. The region's demand for laboratory informatics is driven by the pharmaceutical industry's efforts to lower operational costs in management and analysis.
Asia-Pacific is expected to grow during the forecast period. The top companies are sending their LIMS work to the CROs to save money and boost productivity. Due to their governments' encouragement of the outsourcing industry, India and China are frequently cited as top destinations. Growing economies like India and China have become major centers for outsourcing. Cardiovascular and infectious disease burdens have contributed significantly to expanding clinical services in India. The necessary infrastructure for conducting clinical trials relating to low-cost patient care and evidence-based management may soon be available in India. These programs are expected to increase lab informatics’ market share in China.
Germany dominates the European laboratory informatics market due to the country's superior laboratory infrastructure, rising demand for laboratory system integration, rapid digitalization, and increasing government support for research activities. Research and development labs, the food and beverage industries, contract research organizations, and contract manufacturing organizations are all benefiting from the increased efficiency and effectiveness made possible by the country's growing laboratory infrastructure and automation.
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