Data Labeling Solution and Services Industry Overview
The global data labeling solution and services market size is expected to reach USD 38.11 billion by 2028, according to a new report by Grand View Research, Inc. The market is anticipated to register a CAGR of 23.5% from 2021 to 2028. The rising popularity of data labeling solutions and services in the automotive industry, combined with autonomous vehicles that contain numerous sensors and networking systems that assist the computer driving the car, is propelling the growth of the market.
The market is driven by increased public awareness about digitalization, healthcare treatments, and technological advancements. The demand for data labeling is growing due to technology improvements in large enterprises from the industries such as automotive and healthcare. For example, Waymo LLC, Lyft, Inc., Zoox, and Toyota Research Institute have all used data labeling services provided by Scale AI, Inc., a digital start-up based in the United States.
Producers are increasingly using data labeling on products and services to provide customers with ingredient lists. This is projected to fuel the growth of the global market for data labeling solutions and services. For instance, the image processing technology has benefited Twitter and Facebook-two popular social networking platforms-in terms of audience engagement, since it has encouraged users to upload images and tag their connections, resulting in a more connected experience.
Machine Learning (ML) applications are widely used for categorizing data items such as news articles or tweets. This, in turn, calls for an accurate annotated training dataset, which helps in forming algorithms that automatically classify future data items. However, the process of manually constructing such a dataset is a complex task and requires coders to expend a substantial amount of time.
With the increasing execution of Electronic Health Record (EHR) systems-the collection of clinical data, particularly unstructured text documents-has become a valuable resource for clinical research. Statistical Natural Language Processing (NLP) standards have been designed to unlock data embedded in clinical text. With developments in sentiment analysis, text labeling is also widely utilized in social media monitoring to build recommendation systems.
In December 2019, Enlitic, Inc. announced a partnership with MLPCare, a Turkey-based private healthcare provider, to integrate clinical artificial intelligence into the healthcare systems of Turkey and adjacent countries in Central Asia and Eastern Europe. Under the agreement, Enlitic, Inc. is developing, training, and validating its deep learning models for patients in Turkey. Hence, the increased application of data labeling solutions and services is expected to propel the growth of the market.
Data Labeling Solution And Services Market Segmentation
Grand View Research has segmented the global data labeling solution and services market based on sourcing type, type, labeling type, vertical, and region:
Based on the Sourcing Type, the market is segmented into In-house, and Outsourced.
- The outsourced segment led the sourcing type segment of the data labeling solution and services market. In 2020, the segment held the largest revenue share of 83.7%. The outsourced segment is expected to account for the largest revenue share and provide solid growth opportunities. The segment is expected to witness the fastest CAGR over the forecast period. Short-term commitments and cost-effectiveness are priorities for outsourcing organizations.
- The in-house segment is estimated to witness moderate growth throughout the forecast period. Implementation of in-house data labeling solutions empowers businesses to develop reliable labeling processes and replicable systems for managing data. The companies can also set up custom practices according to the desires and requirements of the company.
Based on the Type, the market is segmented into Text, Image/Video, and Audio.
- The text segment led the market and accounted for the largest revenue share of over 37.0% in 2020. However, the image/ video segment will dominate the market over the forecast period. The high revenue share of the segment can be ascribed to the growing use of computer vision in various industries, including healthcare, automotive, media, and entertainment. For instance, medical imaging is one of the significant image labeling applications.
- Increased use of advanced technology is anticipated to further fuel the growth of the image/video segment. The growing use of computer applications in the healthcare industry for x-ray, CT scans, MRI, and patient treatments will also propel the growth. The text segment accounted for a significant revenue share in 2020, owing to its rising applications in clinical research and e-commerce. Over the projected period, the audio segment is expected to witness the highest CAGR.
Based on the Labeling Type, the market is segmented into Manual, Semi-supervised, and Automatic.
- In 2020, the manual segment dominated the market, with over 82.0% revenue share. The market is divided into manual, semi-supervised, and automatic annotation types. The process of humans categorizing or annotating any data is known as manual data annotation. Compared to automatic annotation, the method is appealing because of benefits such as consistency, high integrity, and low data annotation efforts.
- AI is becoming increasingly important in the data labeling sector as it enables the extraction of high-level and sophisticated abstractions from datasets through a hierarchical learning process. The demand is likely to increase as the necessity for mining and extracting meaningful patterns from large amounts of data grows.
Based on the Vertical, the market is segmented into IT, Automotive, Government, Healthcare, Financial Services, Retails, and Others.
- In 2020, the IT segment dominated the market with a 33.7 % revenue share, due to the widespread use of AI applications in the sector. The healthcare business is expected to increase significantly during the projection period. Artificial intelligence is widely employed in the healthcare industry for various applications, including diagnostic automation, gene sequencing, treatment prediction, medication discovery, deep learning, and machine learning methods to train datasets.
- the automotive segment is expected to register the fastest CAGR of 25.2%. Data labeling technology is increasingly being used in autonomous vehicles, which is expected to contribute to the substantial growth in the automotive segment. With the help of data labeling technology, self-driving vehicles can detect barriers and notify the driver about the vicinity of pathways and guardrails.
Key Companies Market Share Insights
The competitive landscape of the market is fragmented and features the presence of several market players. The market has witnessed several mergers, acquisitions, and strategic partnerships in recent years. For instance, in March 2019, Appen Limited acquired Figure Eight Inc., a U.S.-based AI-focused company. This acquisition was anticipated to bring data annotation expertise to the company. In May 2020, Labelbox, Inc. partnered with Carahsoft Technology Corp., a U.S.-based company providing IT solutions to the government. The partnership speeds up the AI training data platform development for the intelligence community and federal agencies. Some of the prominent players operating in the global data labeling solution and services market are:
- Alegion
- Amazon Mechanical Turk, Inc.
- Appen Limited
- Clickworker GmbH
- CloudApp
- CloudFactory Limited
- Cogito Tech LLC
- Crowdworks, Inc.
- Deep Systems, LLC
- ai
- Explosion AI GmbH
- Heex Technologies
- Labelbox, Inc
- Lotus Quality Assurance
- Mighty AI, Inc.
- Playment Inc.
- Scale AI
- Shaip
- Steldia Services Ltd.
- Tagtog Sp. z o.o.
- Trilldata Technologies Pvt Ltd
- Yandez LLC
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About Grand View Research
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