Connected wearable (smart) patches such as patches, tattoos, or small devices that are affixed to the skin for several weeks will grow from just 67,000 units shipped last year to 12.3 million annually by 2020. According to Tractica, during that period, the market for such products will increase to $3.3 billion annually.

The research firm says that factors driving this trend include rising healthcare costs, a growth in the number of people with chronic diseases, and aging populations; with governments, insurance companies and care providers searching for more cost-effective ways to monitor, diagnose, and treat patients. The smart patches have both clinical and non-clinical applications to include patient monitoring, treatment, and health & wellness applications.

“The nascent market for connected wearable patches holds great promise, with the potential to improve the health of patients and contribute to lower healthcare costs,” says Tractica’s principal analyst Charul Vyas. “It is, however, still very much in the early stages of development and commercial availability. Connected wearable patches face a variety of challenges that must be overcome in the next several years in order for the market to thrive.”

Aside from patches, Tractica is also bullish on the prospects of smart clothing, forecasting that this market will grow from 140,000 units shipped in 2013 to 10.2 million units by 2020.