Rockwell Automation’s 11th annual “State of Smart Manufacturing” report offers a clear signal that manufacturers are moving beyond experimentation and into full-scale implementation. Based on insights from more than 1,500 manufacturers across 17 countries, the 2026 edition places a strong spotlight on Asia Pacific (APAC), where urgency around digital transformation is especially pronounced.
In fact, 95% of APAC manufacturers now view digital transformation as critical to staying competitive well above the global average of 90%. At the same time, 71% are planning to expand their use of AI and machine learning over the next year, reinforcing how central these technologies have become to modern industrial strategy.
Across the region, six priorities are shaping decision-making: technology investment, operational challenges, data utilization, cybersecurity, workforce readiness, and long-term competitiveness.
Generative AI, in particular, is emerging as a major force. Around 40% of manufacturers say it is helping address workforce challenges, while 39% link it directly to long-term competitiveness. Cybersecurity platforms (37%) and AI technologies (32%) are also delivering some of the strongest returns on investment, underscoring their growing value on the factory floor.
Still, progress is not without friction. Internally, budget constraints and inefficient data usage both cited by 41% of respondents remain key obstacles. Externally, workforce-related pressures (40%), rising energy costs, cybersecurity risks, and raw material volatility (each at 37%) continue to complicate operations.
To stay ahead, manufacturers are doubling down on technologies that drive measurable outcomes. AI and machine learning lead the way (53%), followed by process automation (43%) and scalable systems (41%). These investments are closely tied to tangible goals: improving quality (46%), reducing costs (40%), and managing risk (38%). Looking further ahead, AI/ML (51%) and automation (46%) are expected to define competitiveness over the next five years.
AI adoption is accelerating, but gaps remain. While 71% plan to increase AI usage, only 42% of collected data is being effectively utilized today. Data security, cited by 26% of respondents, continues to be a major barrier to unlocking AI’s full potential. Meanwhile, AI augmentation is projected to grow significantly from 34% of operations today to 54% by 2030.
Workforce transformation is another critical piece of the puzzle. Change management and labor-related challenges including rising costs and skills shortages—are both flagged by 40% of manufacturers. Interestingly, soft skills are now taking center stage: communication and teamwork (84%) rank ahead of technical skills like AI application (77%) and coding (73%). Encouragingly, 41% of organizations report having invested in reskilling initiatives over the past year.
Cybersecurity remains a persistent concern. Half of all manufacturers experienced at least one cyberattack in the past year, yet 83% remain confident in their ability to prevent or contain future incidents. IT systems and enterprise networks are seen as the most vulnerable points (42%), highlighting the need for stronger, more integrated security strategies.
That need for integration extends beyond security. Only 22% of organizations have fully implemented manufacturing execution systems (MES), while integration with ERP, PLM, and other platforms remains the biggest modernization hurdle, cited by 40% of respondents.
Taken together, the findings point to an industry in transition, one that is becoming more intelligent, connected, and resilient, but still navigating the complexities of scale, integration, and workforce evolution.
Leadership Comment
“This year’s findings show a region accelerating execution through scaling AI, hardening cyber defences and building the workforce capabilities needed to sustain growth,” said Scott Wooldridge, Regional President, Asia Pacific, Rockwell Automation. “What stands out is both the ambition and the realism. Across the region, manufacturers understand that digital transformation is the critical operating standard.”
The complete 2026 “State of Smart Manufacturing” report is available here.
Methodology
This report analyzes feedback from 1,560 respondents across 17 of the top manufacturing countries representing roles from management through C-suite and was conducted by Sapio Research in association with Rockwell Automation. The survey sampled from a range of industries including Consumer Packaged Goods, Food & Beverage, Automotive, Semiconductor, Energy, Life Sciences, and more. With a balanced distribution of company sizes with revenues spanning $100 million to over $30 billion, it offers a wide breadth of manufacturing business perspectives.
