AI as a success factor - mechanical engineers and startups are finding each other
42 percent of AI startups for mechanical engineering come from Europe. Process optimisation, quality control and predictive maintenance as central fields of innovation. Financing is lacking in Europe.
More and more companies in the mechanical and plant engineering sector are turning to artificial intelligence (AI) to enrich their products with data-based added value. Here, startup companies are playing an increasingly important role as cooperation partners. In an analysis of the past ten years, the VDMA, together with the data specialist delphai, identified a total of 825 startups in 46 countries that offer AI solutions for mechanical and plant engineering. 42 percent of these come from Europe - the continent thus trumps both North America (33 percent) and Asia (24 percent) in the number of startups.
The analysis also shows that more and more money is flowing into AI startups for mechanical engineering. Since 2015, the number of funding rounds here has exceeded the number of startups. Almost 80 percent of the total €13.2 billion invested in AI startups worldwide from 2010 to 2020 was in the period from September 2017 to September 2020. "Artificial intelligence for mechanical engineering is becoming the next stage of digital transformation. And in this, our startup scene in Europe is something to be proud of. Thanks to the high degree of interconnectedness between regional startup and research networks with the vital mechanical engineering industry, Europe is a startup hotbed for AI innovations in an industrial context. Germany is the centre of gravity in Europe with more than one third of startups," explains Hartmut Rauen, Deputy Managing Director of the VDMA. "Our strong Mechanical Engineering 4.0 domain is attracting, creating dominance. As a user and provider of these startup solutions, we in the European mechanical engineering industry are making a significant contribution to bringing AI to industry on a broad scale. This puts us in an excellent position in the global race."
"Europe is a startup hotbed for AI innovations in an industrial context. This puts us in an excellent position in the global race."
AI Startups: trends for mechanical engineering in focus
The new VDMA study "Startup Radar: Artificial Intelligence - Navigator through the global AI startup scene for mechanical and plant engineering" provides a deep insight into the AI startup scene for mechanical engineering. In addition, it also uses practical examples to show the importance and application potential for the industry. It becomes clear that the market of AI startups for mechanical engineering is not only characterized by high investment and funding dynamics, but that the solutions are also increasingly used in the industry. "Startup activities are a strong indicator for the development of future markets. Investment dynamics reflect the high financial expectations investors have for industry automation. With AI being a key technology, startups are creating the next stage in connected manufacturing. And the mechanical engineering industry recognizes this and is positioning itself to take the threshold to this evolutionary stage." explains Dr. Robin Tech, co-founder and managing director of market intelligence firm delphai, which played a key role in the study's creation.
"With AI being a key technology, startups are creating the next stage in connected manufacturing. And the mechanical engineering industry recognizes this and is positioning itself to take the threshold to this evolutionary stage."
Key technology with broad application potential
- Process Monitoring & Operational Excellence: Data-supported monitoring and optimization of production and business processes using digital twins
- Product Inspection & Quality Control: AI solutions for the automation of quality control and inspection
- Predictive Maintenance: AI-based predictive maintenance to reduce unwanted downtime and extend the lifecycles of operational assets
- Autonomous Factory & Process Automation: AI-based automation solutions and robots in and outside of the factory
- Generative Design & Product Simulation: AI-assistedcreation of technical designs or simulations of production and operational environments
- Supply Chain Intelligence and Demand Forecasting: optimizing supply chains and forecasting product demand using AI
Europe needs solutions for more venture capital
Although Europe has a good competitive position in the number of innovative AI startups for the industrial sector, it has weaknesses in the investment ecosystem. The study shows that the US and China lead the way in terms of number of financings and investment volumes. Of the total of 22 financing rounds in the triple-digit million range in the survey period 2010 to 2020, nine were accounted for by Chinese companies, eight by American companies, two by Japanese companies, and one each by a German company (Celonis) and an Israeli company (Innoviz). Europe therefore needs more approaches to channel corporate venture capital into promising startups of its own, thereby strengthening the European economy. According to the study, this needs both a different attitude in companies and government measures to promote the innovation and investment ecosystem.
The study is exclusive to members. A print copy and can be requested at email@example.com. A management summary can be accessed here.
The study is part of the Startup Radar project. Do you have any questions about the project?
Dr. Laura Dorfer, Project Manager VDMA Startup-Machine, phone 069 6603 1782, firstname.lastname@example.org, will be happy to answer them.
Do you have any questions about the AI activities at VDMA?
Guido Reimann, coordinator of the VDMA Artificial Intelligence Competence Network at the Software and Digitalization Association, phone 069 6603-1258, email@example.com, will be happy to assist you.
The VDMA represents around 3300 German and European mechanical and plant engineering companies. The industry stands for innovation, export orientation, medium-sized businesses and employs around four million people in Europe, more than one million of them in Germany alone.
As a grouping of the Competence Center Future Business, the VDMA Startup Machine brings mechanical engineering companies into contact with industrial startups. For this, it supports mechanical engineering companies in keeping an eye on trends in the startup scene and in finding suitable partners in the startup world. It organizes networking and innovation formats and supports the exchange of experience and the collection of best practices.
The VDMA Software and Digitalization represents software manufacturers that are successful in the market as well as development departments of well-known machine builders. More than 400 members are represented in the association. It also coordinates the VDMA competence network "Artificial Intelligence". This was set up with the aim of driving forward the exchange of experience in mechanical engineering and promoting the transfer of knowledge between mechanical engineers, IT companies, startups, research institutions and political decision-makers.
delphai develops the world's first search engine exclusively for B2B. We enable companies to stay up to date on industry trends, movements of their competitors and requirements of their customers. This enables them to make better strategy and sales decisions, reduce risks and leverage growth potential.