Data Annotation Tools Market Size, Share & Trend Report 2031

Report Description

Data Annotation Tools Market Outlook 2031

The global data annotation tools market size was valued at USD 1.30 Billion in 2022, and is anticipated to reach USD 11.6 Billion by 2031, expanding at a CAGR of 27.5% during the forecast period, 2023-2031. The growth of the market is attributed to growing need informative data annotation tools.

Data Annotation tools are essential for AI applications this is labeling and categorization of data. For training, data must be properly organized and additionally annotated for a specific use case. With such high-quality, human-powered, and AI driven data annotation, companies can build and improve machine learning implementations.

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The pandemic have forced the governments around the world to impose lockdown and close down offices, schools, and colleges. This has resulted, in companies implementing work from home (WFH) policy. Also schools and colleges have been forced to continue education and regular classes by using online platforms.

The global online retail market has therefore seen a boom due to the pandemic, not only because of WFH policies which are adopted by companies, but also increasing use of internet and mobile telecommunication platforms for daily business operations and many more stay-at-home activities.

This has ultimately led to increased online transactions, and people are preferring it more because of safety reasons. Most of the online e-commerce websites and healthcare systems have also seen a huge growth during this pandemic. This has led to more and more adoption of automated annotation tools.

Data Annotation Tools Market Drivers, Restraints, and Opportunities

• Cost-effectiveness of annotation tools and its major key benefits of the healthcare segment is a major factor driving the market.
• Increasing efficiency of AI and related technologies is one of the major driving factor for annotation market over the forecast period.
• The inaccuracy of data annotation tools act as a major restraint factor for data annotation market growth.
• Increasing threat of cyber-attacks because of increased data manipulations and huge datasets hampers the market growth.
• Increasing demand for fast, and efficient annotation services is expected to create lucrative opportunities during the forecast period.

Scope of Data Annotation Tools Market Report

The report on the global data annotation tools market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Data Annotation Tools Market Segment Insights

Types Segment Analysis

On the basis of types, the market is segregated into text, image/video, and audio. The text segment dominated the market and accounted for the major market share of over 37.0% in 2020. The image/video segment is anticipated to dominate the market over the forecast period. A number of the key application, such as image data annotation are being used in medical business within the field of medical imaging.

The text section is anticipated to expand at a rapid pace during the forecast period, owing to the rising applications in e-commerce and clinical analysis applications. The audio segment is anticipated to expand at a high CAGR during the forecast period.

For instance, in April 2021, Zoom, a video telephony software system, declared the launch of various updates to its platforms like increased screen annotation, advanced hardware solutions for zoom rooms, enlarged management skills for zoom chat, and advancement in user expertise based on client feedback.

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Annotation Type Segment Analysis

Based upon annotation type, the market is categorised into manual, semi-supervised, and automatic. The manual segment dominated the market and accounted for the major revenue share of over 82.0% in 2020. Manual data annotation is a method of labeling or annotating any knowledge by humans.

When compared to automatic annotation, which can later be included into an algorithm, the approach is popular due to benefits such as correctness, high level of integrity, low data annotation efforts, and a higher probability of discovering fascinating insights pertaining to the data.

The automated annotation segment is anticipated to expand at a rapid pace duirng the forecast period. AI is becoming increasingly important in the data annotation sector because it enables the extraction of high-level and sophisticated abstractions from datasets through a hierarchical learning process. The demand for automatic data annotation tools is likely to increase as the necessity for mining and extracting significant patterns from massive data grows.

Vertical Segment Analysis

Based on vertical, the market is divided into IT, automotive, government, healthcare, financial services, retail, and others. The IT segment dominated the data annotation tools market and accounted for the major market share of around 31.0% in 2020.

The healthcare segment is anticipated to grow at a considerable pace over the forecast period. Treatment prediction, diagnostic automation, medication development, and gene sequencing are just a few of the applications where AI is employed in healthcare.

The data sets in healthcare are needed to be trained with machine learning algorithms. The effectiveness and accuracy of the algorithm for generating AI-based applications is heavily influenced by the quality of the training.

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Regional Analysis

On the basis of regions, the market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America dominated the market and accounted for major market share of around 36.0% in 2020, owing to fast product and geographical growth strategy undertaken by market vendors so as to realize an edge within the market.

Asia Pacific is anticipated to dominate the market during the forecast period. Further, rising economies within the Asia Pacific, are holding important potential for the widespread adoption of data annotation tools, notably within the health care and financial services sectors. The expansion of the health care business within the region is marked by increasing adoption of technology and innovative health care access programs.

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