According to the Market Statsville Group (MSG), the global natural language processing market size is expected to grow from USD 13.8 billion in 2022 to USD 128.7 billion by 2033, at a CAGR of 22.5% from 2023 to 2033.
Natural language processing is a part of artificial intelligence (AI) that enables machines to interpret human language. It is widely used for standard features like spell check, autocomplete, translators, voice assistants, and others. Some well-known examples of NLP-based technology include Siri, Google search, Alexa, and others. Additionally, the global natural language processing market is expected to be driven by the rising amounts of digital data, increased customer experience management, and surging demand for smart devices. Subsequently, this technology is being adopted in various industry verticals like BFSI, healthcare, IT, and others due to its far-reaching benefits. NLP effectively and efficiently organizes data and understands complex computer languages like Java, C++, and others. The accelerating scope of artificial intelligence and its rising application in machine learning and robotics is projected to create lucrative opportunities for the natural language processing market.
The COVID-19 pandemic has significantly impacted the global economy, although the natural language processing market was lucky enough to survive the hit. With the help of NLP, many healthcare organizations can analyze massive amounts of patient data. This aided the diagnosis process and enhanced the research concerning the pattern of covid symptoms. Due to the worldwide lockdown, many companies shifted their work towards online mode, increasing digital data. In order to manage this data, NLP was being adopted by companies. Customer interaction started to take place digitally. Hence to improvise their experience, companies began to launch features like chat-box, voice assistants, and others where NLP is used. Moreover, post-covid, organizations have begun to emphasize advanced technologies like artificial intelligence (AI) and machine learning across various verticals for contactless operation, resulting in a steady growth of NLP.
Enterprises across various verticals are adopting AI-based NLP platforms due to their feature of providing enhanced scalability. However, the on-premise hardware is quite expensive, and companies spend a hefty sum of money which many small & medium enterprises cannot afford. Hence, cloud-based NLP is ideal as it helps reduce upfront and maintenance costs. Other expenses, such as installation and server repairs, are minimized using this technology. Small and medium enterprises have begun to adopt cloud-based NLP, thereby driving the global NLP market. Additionally, the global economy flourished with smart devices with new features and upgraded models being launched daily. Usage of natural language processing in such smart devices is never-ending. Amazon Alexa, Apple Siri, and Google Assistant are the best examples of the prevalence of NLP technology in such devices. Moreover, the growing adoption of advanced search engines and virtual assistants is projected to drive the NLP market.
An NLP solution takes years to develop and highly skilled personnel to effectively run the entire system. Most businesses lack the funding necessary to develop the entire NLP framework and software tools. As a result, a commercial barrier could be perceived as a disparity between human workers and a lack of software that can analyze algorithms. Additionally, many organizations are adopting deep learning and neural networks, which are the most advanced technologies that could enhance the efficiency of NLP. Such neural networks facilitate accurate voice recognition and improved data management. They increase the capacity of NLP technology to interpret human language. However, a huge investment is required to develop such neural networks, which most SMEs cannot afford. Hence, it restrains the growth of small players in this market.
The worldwide pandemic witnessed a surge in patient data from Electronic Health Records (EHR). It was very difficult for healthcare professionals to analyze the enormous amount of data. Hence, analysis-driven tools like the NLP platforms aided the entire process to provide accurate health profiles and better diagnoses. NLP ‘s text analytics technology is also gaining traction in analyzing published content, hate speeches, political reviews, and other content. Subsequently, digital marketing is at an all-time rise, and with the aim to improvise customer interaction on a digital platform, NLP is being used. Increasing adoption of natural language processing in various verticals creates many opportunities for new entrants to develop a unique feature or process using NLP.
The study categorizes the natural language processing market based on component, type, deployment mode, application, technology, and vertical at the regional and global levels.
By Component Outlook (Sales, USD Billion, 2019-2033)
Based on provider service, the market is bifurcated into banking, financial services and insurance, IT, retail and e-commerce, transportation, healthcare, government & public sector, and others. The BFSI segment accounts for the largest market share in 2021. Businesses in the BFSI sector must keep consumers, cut expenses, boost earnings, and adhere to ever-changing norms and regulations. Retrieval of information, intent parsing, customer service, and compliance process automation are just a few risk management techniques that NLP-based technologies can help BFSI organizations employ. Hence, the usage of natural language processing technology in net banking, access to insurance documents, and others is accelerating the growth of the BFSI segment and enhancing its market share as well.
Based on the regions, the global natural language processing market has been segmented across North America, Asia-Pacific, Europe, South America, and the Middle East & Africa. North America will dominate the global natural language processing market in 2021. The growing adoption of AI-based solutions and rapid innovations in this region is accelerating the demand for NLP solutions. Also, the number of NLP service providers is high in this region as compared to other regions.
Asia Pacific region witnessed the highest CAGR during the forecast period, due to the increasing government initiatives for artificial intelligence. For instance, China's most populous country has included AI in its five-year plans to develop smart AI-based solutions in various verticals.
The global natural language processing market is highly competitive, with key industry players adopting strategies such as product development, partnerships, acquisitions, agreements, and expansion to strengthen their market positions. Most market companies focus on expanding operations across regions, augmenting their capabilities, and building strong partner relations.
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