Data Annotation Tools Market Size, Share & Trends Report

Data Annotation Tools Market Size, Share & Trends Analysis Report By Type (Text, Image), By Annotation Type, By Vertical (IT, Automotive, Healthcare), And Segment Forecasts, 2019 - 2025

  • Published Date: Jun, 2019
  • Base Year for Estimate: 2018
  • Report ID: GVR-2-68038-938-8
  • Format: Electronic (PDF)
  • Historical Data: 2014 - 2017
  • Number of Pages: 100

Industry Insights

The data annotation tools market size was valued at USD 316.2 million in 2018 and is projected to register a CAGR of 26.6% from 2019 to 2025. The growth is majorly attributed to increasing adoption of image data annotation tools in the automotive, retail, and healthcare sectors.

Data annotation tools enable users to enhance the value of data by adding attribute tags to it or labeling it. The key benefit of using such tools is that the combination of data attributes enables users to manage the data definition at a single location and eliminates the need to rewrite similar rules in multiple places. The rise of big data and surge in number of large datasets are likely to necessitate the use of artificial intelligence technologies in the field of data annotation.

North America data annotation tools market

Data annotation is expected to play a major role in enhancing AI applications in the healthcare sector. AI-backed machines use machine vision or computer vision in medical imaging data technologies to sense patterns and identify possible injuries, which assists medical practitioners in automatically generating reports after the individual is examined. The database of CT scan, MRI, and X-Ray images can be easily screened by AI to determine various injuries. Data annotation tools help train AI systems in differentiating information obtained from normal and injured medical images to generate the final reports of examined individuals.

Owing to the rising scope of growth in data labelling, companies developing AI-enabled healthcare applications are collaborating with data annotation companies providing the required data sets that can assist them in enhancing their machine learning and deep learning capabilities.

However, inaccuracy of data annotation tools acts as a restraint to the growth of the market. For instance, a given image may have low resolution and can include multiple objects that makes it difficult to label. In some cases, the information labeled manually may contain errors and the time to detect such erroneous labels may vary, which further adds to the cost of the entire process. However, with the development of sophisticated algorithms, the accuracy of automated tools is improving, thereby reducing the dependency on manual processes and minimizing the cost of these tools in the near future.

Type Insights

Based on type, the market is segmented into text, image, and others. In 2018, the text segment accounted for the largest market share. This segment is expected to expand at a promising pace over the forecast period owing to rising applications in e-commerce and clinical research.

The image segment is expected to dominate the market over the forecast period. Some of the major applications of image data annotation are in the field of medical imaging. For example, the total investment in startups developing machine learning solutions using medical images was more than USD 200 million in 2017. Infervision, Zebra Medical Vision, and Arterys are some of the prominent startups in the healthcare data annotation segment.

Annotation Type Insights

Based on annotation type, the data annotation tools market is categorized into manual, semi-supervised, and automatic. In 2018, the manual segment accounted for the largest market share. Manual data annotation is a process of manually labeling or annotating information of various formats. The approach is popular owing to its benefits such as accuracy, high level of integrity, need for minimal administration of data annotation efforts, and a higher chance of discovering intriguing insights pertaining to the data as compared to automatic annotation, which can be later integrated into an algorithm. However, as the manual process can be expensive and time-consuming, labeled data gathered through crowdsourcing activities is used for a variety of applications.

The automatic segment is expected to grow at a promising pace over the forecast period. AI is becoming vital to the data annotation industry as the technology allows extraction of high-level and complex abstractions from datasets using a hierarchical learning process. Need for mining and extracting meaningful patterns from voluminous data is driving the growth of AI, which is expected to further drive demand for automatic data annotation tools.

Vertical Insights

On the basis of vertical, the market has been segmented into IT, automotive, government, healthcare, financial services, retail, and others. The healthcare segment is expected to grow at a good pace over the forecast period. AI is widely adopted in the healthcare sector for various applications such as treatment prediction, diagnostic automation, drug development, and gene sequencing. Data sets in healthcare are required to be trained with machine learning algorithms. The quality of training significantly impacts the efficacy and accuracy of the algorithm used for developing AI-based applications. Access to accurate and high-quality data sets is the key step in developing a successful AI-enabled product in the healthcare sector.

Global data annotation tools market

The automotive segment is anticipated to grow steadily over the forecast period as data annotation tools find wide acceptance in self-driving vehicles. Growing R&D spending for the improvement of image annotation to push developments in the field of self-driving vehicles is boosting product demand. For instance, in 2018, the BMW Group invested the largest share of its revenue in research and development activities. The company is mainly focusing on development of autonomous and electric vehicles.

Regional Insights

North America accounted for the dominant revenue share in the global market in 2018. The Europe market is expected to witness a steady growth pattern over the forecast period. Rising focus on image annotation is anticipated to enhance the operations of retail and automotive verticals in this region, driving product demand.

The Asia Pacific market is anticipated to register the highest CAGR over the forecast period. Emerging economies in the region hold significant potential for widespread adoption of data annotation tools, particularly in healthcare and financial services. The positive growth of the healthcare industry in the region is marked by increasing adoption of technology and innovative healthcare access programs, which is expected to boost demand for image data annotation tools.

Data Annotation Tools Market Share Insights

Key players offering exclusive products and services in the market include; Appen Limited; CloudApp; Cogito Tech LLC; Deep Systems; Labelbox, Inc.; LightTag; Lotus Quality Assurance; Playment Inc.; Tagtog Sp. z o.o.; CloudFactory Limited; Clickworker GmbH; Alegion; Figure Eight Inc.; Amazon Mechanical Turk, Inc.; Explosion AI, Mighty AI, Inc.; Trilldata Technologies Pvt. Ltd. (Data Turks); Scale, Inc.; and Google, LLC.

In August 2018, Scale Inc., a U.S.-based company providing data annotation solutions, announced that it had raised funds worth USD 18 million to label information gathered by companies developing self-driving cars, such as General Motors and Lyft, Inc.

Report Scope



Base year for estimation


Actual estimates/Historical data

2014 - 2017

Forecast period

2019 - 2025

Market representation

Revenue in USD Million & CAGR from 2019 to 2025

Regional scope

North America, Europe, Asia-Pacific, South America and MEA

Country scope

U.S., Canada, Mexico, U.K., Germany, France, China, Japan, India, and Brazil

Report coverage

Revenue forecast, company share, competitive landscape, growth factors, and trends

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Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of latest industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global data annotation tools market report based on type, annotation type, vertical, and region:

  • Type Outlook (Revenue, USD Million, 2014 - 2025)

    • Text

    • Image

    • Others

  • Annotation Type Outlook (Revenue, USD Million, 2014 - 2025)

    • Manual

    • Semi-supervised

    • Automatic

  • Vertical Outlook (Revenue, USD Million, 2014 - 2025)

    • IT

    • Automotive

    • Government

    • Healthcare

    • Financial Services

    • Retail

    • Others

  • Regional Outlook (Revenue, USD Million, 2014 - 2025)

    • North America

      • U.S.

      • Canada

      • Mexico

    • Europe

      • Germany

      • U.K.

      • France

    • Asia Pacific

      • China

      • Japan

      • India

    • South America

      • Brazil

    • Middle East and Africa

Key questions answered by the report
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