Unlocking Europe's hidden industrial gems: The Industrial Renaissance in the Age of Technology

In an era dominated by headlines about technology giants and digital disruptors, it's easy to overlook the quiet powerhouses that drive Europe's economy: the industrial sector. Embracing the concept of an 'industrial renaissance' and considering recent developments, including the convergence of industry and technology, it's time to shine a light on the robust opportunities that lie within Europe's industrial landscape for investors and businesses alike.?

The resilience of Europe's industrial backbone

Europe has long been a cradle of industrial innovation. From Belgium's chemical industry to Germany's precision engineering firms and the advanced manufacturing hubs of the Nordics, the continent boasts a rich tapestry of companies that have weathered economic storms and emerged stronger.

Economic contribution: The industrial sector accounts for around 20% of the EU's GDP and employs over 35 million people. Despite global challenges, these figures have remained relatively stable, underlining the resilience of the sector.

Export powerhouse: European industrial companies are major contributors to global trade, with machinery, automotive and chemical products leading exports. German machinery exports, for example, exceeded €190 billion in 2024, showing continued strength.

?The fusion of industry and technology: A new era

The convergence of industry and technology is redefining traditional manufacturing and industrial operations. The integration of advanced technologies such as robotics, artificial intelligence (AI) and the Internet of Things (IoT) is leading to smarter, more efficient and more competitive industrial processes.

Key takeaways from the convergence of industry and technology

1. Improved operational efficiency: The use of robotics and AI enables the automation of repetitive tasks, reducing human error and increasing productivity. European companies are using these technologies to remain competitive on a global scale.

2. Smart data collection: At a time when concepts such as digital twins and other advanced applications are gaining traction, the importance of effective data collection cannot be overstated. Companies that focus on intelligent data collection are laying the foundation for advanced analytics and predictive maintenance.

3. Predictive maintenance and safety: Advanced sensors and data analytics enable predictive maintenance of industrial equipment, reducing downtime and preventing accidents. This not only saves money, but also improves worker safety.

4. Data-driven decision making: IoT devices collect vast amounts of data from industrial processes. By analysing this data, companies can optimise operations, reduce waste and improve product quality.

Case study: Gecko Robotics - a lesson in smart data collection

While the focus is often on high-profile technologies such as digital twins, Gecko Robotics in the United States has demonstrated the immense value of intelligent data collection in industrial environments.

- Overview: Gecko Robotics develops wall-climbing robots equipped with advanced sensors to inspect industrial infrastructure such as power plants, refineries and manufacturing facilities. These robots collect high-resolution data on equipment integrity, detecting problems such as corrosion or wear that could lead to failures.

- Rise to prominence: Founded in 2013, Gecko Robotics has grown rapidly due to its unique approach to data collection. By addressing the critical need for accurate, real-time data in hazardous environments, the company has filled a gap that many have overlooked while focusing on more abstract concepts such as digital twins.

- Impact: The intelligent data collected by Gecko's robots enables customers to make informed maintenance decisions, improving safety, reducing downtime and saving costs. Its success underscores the importance of enabling technologies that enable advanced applications.

- M&A Angle: Gecko Robotics' growth has attracted significant investment and the company is a potential acquisition target for larger industrial companies looking to expand their data collection capabilities.

Implications for Europe

European industrial companies can learn valuable lessons from Gecko Robotics:

1. Prioritise enabling technologies: Before implementing complex systems such as digital twins, investing in intelligent data collection ensures that the baseline data is accurate and reliable.

2. Innovate in niche areas: There are immense opportunities in specialising in specific aspects of the industrial process that may be overlooked but are critical to overall efficiency.

3. Integration opportunities: European companies can seek partnerships or acquisitions with companies specialising in intelligent data collection to enhance their service offerings.

Draghi's vision for revitalising the European economy

Former European Central Bank President and Italian Prime Minister Mario Draghi has been a prominent voice advocating strategies to rejuvenate Europe's economy. His insights are particularly relevant to the industrial sector.

1. Invest in innovation and infrastructure: Draghi stresses the need for increased public and private investment in innovation, research and infrastructure. By modernising infrastructure and promoting technological progress, European industry can improve its global competitiveness.

2. Fiscal policies that support growth: It advocates fiscal policies that support economic growth, especially in the wake of economic downturns. This includes targeted spending on sectors with high growth potential, such as advanced manufacturing and green technologies.?

Lessons from Europe's industrial renaissance

The industrial renaissance is characterised by traditional industries reinventing themselves through innovation, sustainability and technological integration.

1. Technological leadership: European industrial companies invest heavily in R&D. ASML , a Dutch company, is the world's leading supplier of photolithography systems for the semiconductor industry. Its cutting-edge technology is essential for the production of advanced microchips and places ASML at the forefront of technological innovation.

2. Innovation at the core: Companies are embracing the principles of Industry 4.0, integrating cyber-physical systems, automation and data sharing into manufacturing technologies.

3. Focus on smart data: European companies are beginning to recognise the importance of smart data collection. Siemens, for example, has invested in advanced sensor technologies and data analytics to enhance its industrial solutions.

Recent case studies

1. Thales' acquisition of DataSense Analytics (2024)

Overview: French multinational 泰雷兹 acquired DataSense Analytics , a company specialising in industrial data collection and analysis.

Impact: This acquisition strengthens Thales' ability to provide comprehensive data-driven solutions to industrial customers and highlights the importance of intelligent data collection.

2. Siemens' partnership with robotics innovator Universal Robots (2024)

Overview: Siemens has entered a strategic partnership with the Denmark founded Universal Robots to develop advanced robotic solutions for industrial inspection and maintenance.

Impact: The collaboration aims to replicate the success of companies such as Gecko Robotics in the US, bringing advanced data collection capabilities to European industry.

Why now is the time to invest

EU Recovery and Resilience Facility: The EU has allocated €672.5 billion through the Recovery and Resilience Facility to help member states recover from the pandemic. A significant portion of this is directed towards digital transformation and green technologies, which will benefit the industrial sector.

Supply chain transformation: The pandemic and geopolitical tensions have prompted companies to rethink their supply chains, favouring nearshoring. European industrial companies will benefit from increased demand and investment.

Sustainability and the Green Deal: The EU's commitment to climate neutrality by 2050 opens up huge opportunities for industrial companies involved in renewable energy, energy efficiency and sustainable technologies.

Strategies for investors and companies

1. Embrace smart data collection: Invest in technologies and companies that focus on smart data collection, recognising it as a critical foundation for advanced industrial applications.

2. Identify hidden champions: Look for mid-sized companies that specialise in niche areas such as industrial robotics, sensor technologies and data analytics.

3. Leverage M&A for innovation: Use mergers and acquisitions to rapidly acquire technological capabilities, especially in areas that have been overlooked but are essential.

4. Align with policy initiatives: Invest in sectors and companies that align with EU policy priorities to benefit from supportive policies.

Conclusion

European industry isn't just surviving, it's thriving in a new era defined by the integration of technology and industry. The example of Gecko Robotics in the US shows the immense potential for companies that focus on intelligent data collection - a fundamental element that enables the successful implementation of advanced technologies such as digital twins.

By recognising and investing in these revitalised industrial powerhouses, investors and companies can unlock significant value. The combination of robust industrial capabilities, supportive fiscal policies and a collective drive for sustainability and innovation creates an environment ripe for strategic M&A activity.

As a global M&A advisor, I encourage stakeholders to delve deeper into Europe's industrial landscape, paying particular attention to companies that prioritise intelligent data collection and analysis. The opportunities are vast, and with the right approach, the rewards can be substantial.

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About the author, Jeroen Maudens is an experienced global M&A advisor ONEtoONE Corporate Finance with extensive experience in the European industrial sector. He specialises in identifying strategic investment opportunities and guiding companies through complex transactions. Jeroen is also a mentor for the Founder Institute , supporting emerging tech entrepreneurs.

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