The global AI in healthcare market size is expected to grow from USD 4.9 billion in 2020 and to reach USD 45.2 billion by 2026; it is projected to grow at a CAGR of 44.9% during the forecast period. The major factors driving the market growth are increase in the volume of healthcare data and growing complexities of datasets, the surging need to reduce increasing healthcare costs, improving computing power and declining hardware costs, growing number of cross-industry partnerships and collaborations, and rising imbalance between health workforce and patients driving the need for improvised healthcare services.
Another prime factor driving the market growth currently is the adoption of this technology by multiple pharmaceutical and biotechnology companies across the world to expedite vaccine or drug development processes for COVID-19. The major restraint for the market is the reluctance among medical practitioners to adopt AI-based technologies and lack of skilled workforce. Critical challenges for the AI in healthcare market include the lack of curated healthcare data, concerns related to data privacy, and lack of interoperability among AI solutions. Underlying opportunities in the AI in healthcare market include the growing potential of AI-based tools for elderly care and increasing focus on developing human-aware AI systems.
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The emergence of the COVID-19 pandemic, which has significantly stressed the healthcare infrastructure across the world, is expected to prompt healthcare providers, payers, and pharmaceutical companies adopt AI technology in areas of drug discovery, medical imaging, pathology, mental health, assistance robots, and precision medicine.
The market for software offerings is projected to grow at the highest CAGR from 2020 to 2026. Many companies are developing software solutions for various healthcare applications; this is the key factor complementing the growth of the software segment. Growing adoption of AI-driven healthcare informatics solutions and healthcare operational support by hospitals and other healthcare service providers is expected to boost the demand for services segment in the later part of the forecast period.
By technology, the AI in healthcare market for machine learning is projected to grow at the highest CAGR from 2020 and 2026. Growing adoption of deep learning in various healthcare applications, especially in medical imaging, disease diagnostics, and drug discovery, and the use of different sensors and devices to track a patient’s health status in real time, are supplementing the growth of the market.
By application, the medical imaging & diagnostics segment is projected to grow at the highest CAGR from 2020 to 2026. Factors such as the presence of a large volume of imaging data, advantages offered by AI systems to radiologists in diagnosis and treatment management, and the influx of a large number of startups in this segment are driving the growth of this segment.
By end-user, the patients segment is projected to record the highest CAGR from 2020 to 2026. Increasing demand for personalized care, the need to reduce hospital readmissions, and the convenience offered by AI products and solutions are the key factors driving the growth of the patients segment in the AI in healthcare market.
By region, the AI in healthcare market in APAC is projected to grow at the highest CAGR from 2020 to 2026. China is the highest spender on healthcare among APAC countries and has charted out official plans to digitize medical records. Moreover, government bodies in China are undertaking initiatives to encourage the adoption of AI technologies in healthcare. These will drive the market for AI in healthcare in China. Japan is likely to capture the second-largest market share during the forecast period.
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