“From AI-driven process automation, to electrified heating in buildings, to the mobility transition, our companies are active in these growth fields with their solutions—making the electrical and digital industry the key sector of the future,” said ZVEI President Gunther Kegel at the presentation of the study’s findings in Frankfurt. He stressed: “To fully exploit this potential, we need, in addition to entrepreneurial decisions, above all one thing: industry-ready political framework conditions that promote rather than hinder.”

Even today, the sector is one of Germany’s largest industries: with revenues of €220 billion in 2024 and around 900,000 employees, it generates about one-seventh of total industrial value creation. Its high share of innovation further strengthens its role: about one-fifth of revenue comes from new products, and nearly one-quarter of all R&D spending in the manufacturing sector originates from the EDI.

As a provider of cross-cutting technologies, the electrical and digital industry is involved in nearly all of the growth markets identified in the study. In industrial automation and robotics alone, as well as alternative drives, Germany’s value creation could exceed half a trillion euros by 2035 if competitive conditions develop positively. The EDI plays a major role here: by developing key components for automation solutions—from components for industrial robots to intelligent control and communication units to embedded software—it not only enables more efficient production processes, but also drives forward digital transformation in user industries.

Industrial AI

Particularly high potential lies in the field of industrial artificial intelligence (AI). According to the position paper, the global AI market is expected to reach around €2 trillion by 2035. “In the optimistic scenario, Germany could increase its market share to just over 7%, giving the AI growth market a value creation potential of up to €144 billion for Germany (source: IW Consult),” the paper states. Industrial AI is intended to make production processes more efficient and flexible, for example in manufacturing, logistics, or maintenance. At the same time, the study’s authors expect productivity gains for Germany of 0.9% annually for 2025–2030 and 1.2% annually for 2030–2040 (source: IW Consult).

Automation and Robotics

Automation and robotics are also among the biggest growth drivers. For Germany, a value creation potential between €155 billion and €276 billion is expected by 2035. According to the ZVEI position paper, this is a global market with an expected volume of around €2 trillion, of which Germany could capture up to €285 billion in the optimistic scenario.

“The growth field of digitalization, consisting of the markets for artificial intelligence as well as automation and robotics, will generate a total value creation potential of up to €420 billion in the optimistic 2035 scenario. The EDI is considered one of the most important lead industries here and is significantly advancing digital transformation,” the paper states.

Energy Technology and Electrification

In energy technology, the EDI is becoming a central player, especially through grid technology, heat pumps, and direct current solutions. The position paper estimates a possible value creation potential for Germany of €153 billion by 2035. The global markets for heat pumps and smart building technology alone are expected to reach a combined €1.4 trillion by 2035. Direct current solutions are also seen as a significant growth field, for example in coupling renewable energies with electromobility and storage.

Microelectronics

According to the ZVEI, chips and sensors are indispensable for almost all future technologies - from medical technology to mobility and defense systems. The position paper points out that without additional support measures, the European production share could fall from 8.1% today to 5.9% in 2045. While the USA, China and Japan are investing billions in semiconductor production, the EU is lagging far behind. However, earlier funding programs in Europe have already proven to be a growth driver: According to the study, they led to new jobs, higher added value and additional tax revenue.

Defense and security

The importance of EDI for the defense industry continues to grow. The proportion of electronics in defense systems has risen from 10% to 17% since 2000 and is expected to reach 25% by 2035 to 2040. According to the position paper, modern defense systems are increasingly based on electronics, software and digital infrastructure. Important trends include unmanned systems such as drones and satellite communication for secure navigation and surveillance. At the same time, there are high barriers to entry for companies, for example due to certification requirements or export controls.

Need for political action

ZVEI is calling for strengthening competitiveness through energy policy reforms, reducing bureaucracy, and investing in technology-driven markets. The German government’s current package of measures is not sufficient to fully harness the sector’s opportunities.

With its position paper “Agenda for the Industry of Tomorrow,” ZVEI points to the strategic role of the electrical and digital industry for the German and European economy. It is not only a key sector but also a prerequisite for growth in other industries. According to the position paper, the industry has a cross-cutting function that is crucial for the competitiveness of Germany and Europe.

Download the ZVEI position paper (German) here!