European manufacturing industry expects massive boost from AI

Industrial companies in Europe regard artificial intelligence as one of the main drivers of growth, in particular due to the opportunities it offers for greater efficiency, flexibility and differentiation. That is a key takeaway from a survey of 858 professionals and executives from various industrial verticals, conducted by Hewlett Packard Enterprise (HPE) and Industry of Things World, Europe’s leading industrial IoT conference. The main challenges preventing further AI adoption are the lack of quantitative and qualitative data as well as the shortage of expertise.

By 2030, the respondents expect to grow their revenues by 11.6% thanks to AI adoption, while simultaneously improving margins by 10.4%. The professionals expect to see AI-related benefits in virtually all parts of the industrial value chain, but they also see opportunities for improving differentiation through new products and services. This expectation is fuelled by the high success rates of completed AI projects; 95% of the respondents who have implemented AI projects say they achieved or even over-achieved their goals.

“Core to the fourth industrial revolution, AI will be a key enabler in transitioning from automation to autonomy, creating growth and competitive advantage”, says Volkhard Bregulla (photo), Vice President Global Manufacturing, Automotive and IoT at HPE. “Our research shows that the European industrial sector has clearly understood and embraced the strategic power of AI, but it also reveals the importance of bridging the gap between data and skills to fully unleash its potential.”

AI not a ‘job killer’

61% of the respondents are already engaged in AI, with 11% having actually fully implemented the technology in core functions or activities. 14% are planning to roll it out in the next 12 months and 36% are currently evaluating implementations. The survey participants expect to invest an average of 0.48% of their revenue in AI over the coming year. Accordingly, two thirds of the respondents no longer regard AI as a ‘job killer’; they expect that the new jobs created by AI will outweigh the number of jobs its makes redundant.

The respondents’ use cases for AI span the entire value chain, including research & development (38%), demand forecasting (21%), production planning (18%), operations (32%), maintenance (34%), sales (20%) and services (29%). The key aims of AI implementations include increasing efficiency in operations, maintenance and supply chain (57%), improving the customer experience (45%), enhancing products and services by adding new features (41%), quickly and automatically adapting to changing conditions (37%), creating new business models (34%) and better aligning the supply and demand through improved forecasts and planning (32%).