Technology And Government Incentives Will Drive The Demand For Industrial Gases
The industrial gases industry is expected to be driven by advances in technologies such as big data analytics, Internet of Things (IoT), and cloud computing. These technologies enable industrial gas companies to optimize operations and reduce operational costs. Social media platforms and digital marketing technologies are also assisting industrial gases manufacturers to promote their services to diverse customers globally. Many companies are investing in artificial intelligence and digitization technologies for remote maintenance and monitoring of plants. For instance, companies such as Praxair and Linde have adopted these technologies to enhance production efficiencies and reduce production costs. Similarly, pressure swing adsorption technologies and advances in cryogenic technologies are enabling industrial gases companies to produce larger quantities of gases at lower costs. Other areas of rapid technological changes in the industrial gas market include using hydrogen in automobiles, manufacturing hydrogen from sewage, and developing new drugs using industrial gases.
Technological advances were also a significant driver of the industrial gas market in the historic period. Between 2013 – 2018, the value of the NASDAQ index of technology stocks in the USA increased by more than 100%. Industries that involve technology, such as the industrial gas industry, benefited from this trend during this period.
The global industrial gas market is expected to grow from nearly $104 billion in 2019 to around $125 billion in 2022 at a compound annual growth rate (CAGR) of 6.4%.
Many manufacturing companies such as semiconductor, medical equipment and oil and gas companies often receive support in the form of incentives and subsidies from national and state governments. Favorable government policies regarding outsourcing, FDI (foreign direct investment) and investments in manufacturing and infrastructure companies have led to an increase in demand for industrial gases, thus driving the industrial gases market. Political agendas tend to impact the budget for manufacturing companies, low emission transportation services, and research and development. For instance, the Indian government provides 50% of the cost for development of infrastructure in electronic manufacturing clusters. These companies use gases such as helium to manufacture hard drives and semiconductors. Infrastructure companies use carbon dioxide for welding iron and steel components in construction sites, thus increasing the demand for carbon dioxide. Many national and state governments are offering subsidies for hydrogen powered cars which have increased the demand for hydrogen in Japan, the US, and countries in the European Union. For instance, the government of Tokyo in Japan subsidized 80% of the costs of building hydrogen stations in 2015, which drove the demand for hydrogen powered cars. Investments and subsidies in the healthcare industry and increase in research and development funding also increased the demand for industrial gases globally.