95% of Asia Pacific Manufacturers Say Digital Transformation is Now Essential, as AI Adoption and Cyber Risks Accelerate 

 

2026 State of Smart Manufacturing Report shows Asia Pacific manufacturers scaling AI, strengthening cyber defences and targeting measurable operational outcomes 

 

Rockwell Automation, Inc the world’s largest company dedicated to industrial automation and digital transformation, has released its 11^th annual “State of Smart Manufacturing” report. The global study highlights insights from more than 1,500 manufacturers across 17 countries, including dedicated insights for Asia Pacific (APAC). 

 The 2026 report highlights the transition from early-stage adoption to broader implementation: 95% of APAC manufacturers say digital transformation is essential to their competitiveness, ahead of the 90% global average, reflecting the region’s heightened urgency. Additionally, 71% of APAC organizations plan to increase artificial intelligence (AI) use and machine learning in the next 12 months.  

 “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 report highlights six key perspectives that Asian manufacturers are focused on: technology investment, internal and external challenges, data utilisation, security, the workforce, and competitiveness. 

 Key Asia Pacific (APAC) findings include: 

 Smart Manufacturing Technology 

Within the context of smart manufacturing, generative AI is emerging as a central driver of transformation. 40% of manufacturers cite its impact on workforce challenges and 39% on long-term competitiveness, positioning AI as a core foundation of modern industrial operations. Respondents also note cybersecurity platforms (37%) and generative or causal AI (32%) have delivered the highest return on investment over the past 12 months.  

 Data and AI 

AI adoption continues to accelerate across the region, with 71% of manufacturers planning to increase AI and machine learning usage in the next 12 months. AI augmentation is expected to grow from 34% of operations today to 54% by 2030, reflecting its expanding role in industrial processes. However, challenges remain, as only 42% of collected data is currently used effectively, and data security (26%) continues to be the leading barrier to unlocking AI’s full potential. 

 The Workforce 

Workforce transformation remains a key focus, with change management (40%) and rising labor costs and skills shortages (40%) identified as the top challenges. While technical capabilities remain important, manufacturers are placing greater emphasis on soft skills, with communication and teamwork (84%) ranked higher than applying AI (77%) and coding (73%). At the same time, 41% of organizations report that their workforce has participated in reskilling programmes over the past year, highlighting ongoing efforts to adapt to technological change. 

 Maintaining Competitiveness 

To remain competitive, manufacturers are prioritizing the adoption of smart technologies that deliver measurable outcomes. AI and machine learning (53%), process automation (43%) and scalability (41%) are seen as the most impactful features driving business performance. As a result, organizations are focusing on quality improvement (46%), cost reduction (40%) and risk mitigation (38%), while looking ahead, AI/ML (51%) and automation (46%) are viewed as critical to sustaining competitiveness over the next five years. 

 Business Continuity 

Cyber risk continues to be a critical concern, with 50% of manufacturers experiencing at least one cyberattack in the past year. Despite this, confidence remains high, with 83% believing they could prevent or contain a future incident. IT systems and enterprise networks are seen as the most vulnerable areas (42%), underscoring the need for stronger security frameworks. At the same time, only 22% of organizations have fully integrated manufacturing execution systems (MES) to support advanced analytics and automation, while integration with ERP, PLM and other systems remains the biggest modernization challenge (40%). 

 Obstacles and Outlook 

Manufacturers across Asia Pacific face a mix of internal and external challenges. Internally, budget constraints and inefficient data usage (both 41%) are the most significant barriers to progress. Externally, workforce-related issues (40%), along with rising energy costs, cybersecurity risks and raw material pricing or availability (all 37%), are shaping the operating environment. 

 The 2026 State of Smart Manufacturing Report draws on more than a decade of global research to highlight the capabilities shaping modern industrial operations, including intelligence, resilience, adaptability and workforce transformation.   

 The complete 2026 “State of Smart Manufacturing” report is available here. 

 

This report analyses 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. 

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