According to the business intelligence report titled ‘Global Data Annotation Tools Market Size study, by Type (Text, Image/Video and Audio), by Annotation Type (Manual, Automatic and Semi-supervised), by Vertical (IT, Automotive, Government, Retail, Healthcare and Others) and Regional Forecasts 2021-2027’, available with Market Study Report, global data annotation tools market was assessed at USD 492 million in 2020 and is anticipated to be worth USD 2508.31 million by 2027, growing at 26.2% CAGR between 2021-2027.
 

Surging demand from healthcare, retail, and automotive industries, and widespread incorporation of Big Data are the key factors driving global data annotation tools market expansion. Also, ability of data annotation to increase recognizability of objects to computer vision and enhance machine learning & artificial intelligence will aid revenue inflow as well.
 

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For the unversed, data annotation is the labeling of data to make it cleaner, more useful, and lean for further processing. A data annotation tool is a containerized or cloud-based software solution which can be used to annotate production grade training data for machine learning purposes.
 

Furthermore, growing use of data annotation tools for data & image categorization in self-driving cars as well as medical imagining & drug development in the healthcare sector will aid industry proliferation.
 

Citing an example, Uber Technologies Inc. acquired a Seattle-based startup Mighty AI in 2019, wherein the latter focusses on developing training data for computer vision models. The team at Mighty AI developed a technology to label images & data at scale using the most advanced user experience techniques and latest AI.
 

While growing innovation, and investment in research & development activities will contribute to the industry outlook, inaccurate annotation of data owing to poor quality of datasets and limited power of tools will act as challenges for businesses in this domain. 
 

Based on type, worldwide data annotation tools industry is divided into image/video, text, and audio. Speaking of annotation type, the business sphere is split into automatic, manual, and semi-supervised. Moving on to vertical the business sphere is fragmented into government, automotive, IT, healthcare, retail, and others.
 

Regionally speaking, North America led the industry forecast in the recent past, owing to higher per capita income, and increasing adoption of AI for research & development by companies in the healthcare as well as automotive sectors.
 

Meanwhile, Asia Pacific market is projected to grow considerably between 2021-2027, due to growing awareness regarding advanced technologies and their increasing adoption in end-use industries such as healthcare, retail, and automotive.
 

Leading players influencing the global data annotation tools industry trends are Annotate.net Inc., Cogito Tech LLC, Appen Limited, Playment Inc., CloudApp, Labelbox Inc., Deep Systems LLC, Tagtog Sp. z.o.o., LightTag, and Lotus Quality Assurance.