Artificial intelligence | startups and mechanical engineers cooperate

Artificial intelligence
Artificial intelligence

AI is playing an increasingly important role in mechanical engineering – innovation is mostly driven by startups. A VDMA study shows examples of successful cooperation.
42 per cent of the mechanical engineering-relevant AI startups come from Europe. – Picture: Blue Planet Studio –
More and more companies in mechanical and plant engineering are relying on artificial intelligence (AI) to enrich their products with data-based added value. Start-up companies are playing an increasingly important role as cooperation partners. In an analysis of the past ten years, the VDMA, together with data specialist Delphi, identified a total of 825 startups in 46 countries that offer AI solutions for mechanical and plant engineering. 42 per cent of them come from Europe – so the continent trumps both North America (33 per cent) and Asia (24 per cent) in terms of the number of start-ups.
The analysis also shows that more and more money is flowing into AI startups for mechanical engineering. Since 2015, the number of financing rounds has exceeded the number of start-ups. Almost 80 per cent of the total of 13.2 billion euros invested in AI startups worldwide from 2010 to 2020 was accounted for in the period from September 2017 to September 2020.

Europe as a startup forge for AI innovations

“Artificial intelligence for mechanical engineering will be the next stage in digital transformation. And our start-up scene in Europe is impressive. Due to the high degree of networking between regional start-ups and research networks with the vital mechanical engineering industry, Europe is a start-up forge for AI innovations in an industrial context. Germany is the centre of gravity in Europe with more than a third of the start-ups, ”explains Hartmut Rauen, deputy VDMA managing director. “Our strong mechanical engineering
4.0 domain attracts, creates dominance. As a user and provider of these startup solutions, we as a European mechanical engineering company make a significant contribution to bringing AI into the industry on a broad scale. We are therefore ideally positioned in the global race. “

AI is being used more and more in the industry

The new VDMA study “Startup Radar: Artificial Intelligence – Navigator through the global AI startup scene for mechanical and plant engineering” gives a deep insight into the AI ​​startup scene for mechanical engineering. In addition, it uses practical examples to show the importance and application potential for the industry. It becomes clear that the market for AI startups for mechanical engineering is not only characterized by high investment and funding dynamics but that the solutions are also being used more and more in the industry.
“Start-up activities are a strong indicator for the development of future markets. The investment dynamism reflects the high financial expectations that investors have of the automation of industry. With the key technology of AI, startups are taking the
next level in networked production. And mechanical engineering also recognizes this and positions itself to take the threshold to this evolutionary stage, ”explains Dr Robin Tech, co-founder and managing director of the market intelligence company Delphi, which played a key role in preparing the study.

New services and business models

As the study also shows, artificial intelligence can be used to implement efficiency potentials in various fields of application of industrial value creation and to set up new services and business models. There are currently six innovation clusters that are particularly noticeable for mechanical engineering. These innovation clusters outline areas of application in which a high number of start-ups can currently be recorded and which are of high relevance for mechanical and plant engineering:

⦁ Process Monitoring & Operational Excellence: Data-supported monitoring and optimization of production and business processes using digital twins
⦁ Product Inspection & Quality Control: AI solutions for automating quality control and testing
⦁ Predictive Maintenance: AI-based predictive maintenance to reduce unwanted downtimes and extend the life cycles of operational systems
⦁ Autonomous Factory & Process Automation: AI-based automation solutions and robots in and outside the factory
⦁ Generative Design & Product Simulation: AI-supported creation of technical drafts or simulations of production and operational environments
⦁ Supply Chain Intelligence and Demand Forecasting: Optimizing supply chains and forecasting product demand using AI

Weaknesses in the investment ecosystem

Although Europe competes well in terms of the number of innovative AI start-ups for the industrial sector, it has weaknesses in the investment ecosystem. The study shows that the US and China are in number in terms of financing and investment volumes. Of the total of 22 financing rounds in the three-digit million range between 2010 and 2020, nine were made by Chinese companies, eight by American companies, two by Japanese companies, and one each by a German (Celonis) and an Israeli company ( Innoviz). Europe, therefore, needs more approaches to allow corporate venture capital to flow into its own promising start-ups and thus strengthen the European economy. According to the study, this requires both a different attitude in companies and government measures to promote the innovation and investment ecosystem.

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