Germany's secret superpower? How these three technologies make us stronger than the US and China
Xpert pre-release
Language selection 📢
Published on: October 2, 2025 / Updated on: October 2, 2025 – Author: Konrad Wolfenstein
Germany's secret superpower? How these three technologies make us stronger than the US and China – Image: Xpert.Digital
The invisible giants: How 1,469 German companies are secretly conquering the world – and hardly anyone knows it
More than just mechanical engineering: Why Germany is much further ahead in artificial intelligence than you think
While there is often talk of deindustrialization and a sense of crisis, a technological revolution is quietly brewing in Germany that has the potential to not only keep the country at the forefront of the world but also redefine its leadership position. The key to this lies in the intelligent integration of three powerhouses: the traditionally strong mechanical engineering sector, a rapidly growing robotics landscape, and the transformative power of artificial intelligence. This "technological trinity" reinforces each other and creates a foundation that is unparalleled internationally.
With almost 280,000 robots in operation, Germany is already Europe's undisputed automation superpower. But its true strength lies deeper: in the 1,469 often unknown global market leaders, the so-called "hidden champions," who set the global pace in their niches. This article shows how this unique industrial base is reaching a new level of competitiveness through strategic alliances—from Siemens' data collaboration to the groundbreaking European partnership between ASML and Mistral AI. We examine why the weaknesses of its competitors, the US and China, represent a historic opportunity for Germany and how the convergence of these technologies can open up a future market worth eight trillion euros. It is the story of a technological turning point that proves: The time for self-doubt is over. Here are the facts that are paving Germany's way to the forefront of the next industrial revolution.
Suitable for:
The technological trinity: robotics, AI and mechanical engineering as the key to global leadership
Germany is at a crucial turning point in its industrial history. The combination of robotics, artificial intelligence, and mechanical engineering lays the foundation for a new era of technological innovation. These three fields are not only intertwined but also mutually reinforce each other, creating a force that gives Germany the potential to not only maintain but even expand its position as a leading industrial nation.
German industry has already proven its ability to master complex technological systems. With 278,900 operational robot units by 2024, Germany is the European leader in robot automation, operating 40 percent of all factory robots within the European Union. This impressive figure reflects not only the technological maturity but also the willingness of German industry to invest in pioneering technologies.
Germany's strength lies in its unique combination of factors. The country boasts highly qualified hardware manufacturers known worldwide for their precision and reliability. At the same time, the German economy is characterized by long-term strategic thinking that transcends short-term profit maximization. This philosophy enables companies to make sustainable investments in research and development that only pay off over the years.
The global robotics market: Germany's strong position
In a global comparison of annual robot installations, Germany ranks fifth, behind Korea, the USA, Japan, and China. This position may seem modest at first glance, but it reflects a remarkable achievement when viewed in context. Germany installed a total of 27,000 new industrial robots in 2024, the second-best result since the surveys began.
The German robotics landscape is characterized by impressive diversity. Global corporations such as Bosch, Linde Material Handling with €8.46 billion in revenue, and Jungheinrich with €5.55 billion are at the forefront. KUKA, with €4.05 billion in revenue and 14,726 employees, is also among the leading players and operates in several robotics segments.
The role of SMEs as drivers of innovation is particularly noteworthy. Companies like Munich-based Agile Robots, with 1,700 employees, and Cologne-based igus, with €1.1 billion in revenue and 5,215 employees, have established themselves internationally as specialists in niche markets. These SMEs are often the true hidden champions of the German robotics industry.
The regional distribution shows a clear concentration: Over 80 percent of the leading robotics companies are headquartered in Baden-Württemberg, Bavaria, and North Rhine-Westphalia. Baden-Württemberg is proving to be a particular robotics hotspot with a strong environment for AI research and industrial applications.
Industry distribution: New dynamics in German robotics use
An analysis of the industry distribution of robot installations reveals interesting developments in German industry. While the automotive industry has traditionally been considered the largest user of robots, new trends are emerging. In 2024, sales in the automotive industry fell dramatically by 25 percent to 6,900 units, representing the weakest result in 15 years. This development is due to lower-than-expected demand for electric vehicles and political uncertainty.
In contrast, the metalworking industry experienced an impressive upswing. With 6,000 units installed in 2024, it achieved an increase of 23 percent compared to the previous year, achieving its best result since surveys began. This development demonstrates the adaptability of German industry and its ability to tap into new growth areas.
Other growth areas include the chemical and plastics industry, with 3,100 installed units and a growth of 71 percent, and the electrical and electronics industry, with 2,100 units and an increase of 18 percent. This diversification demonstrates that German robotics applications are no longer exclusively dependent on the automotive industry, but are expanding into various sectors.
Artificial Intelligence: Germany's potential as a technology pioneer
The German mechanical and plant engineering industry is ideally positioned to use AI software to position itself at the top of the global rankings. This optimistic assessment is based on several structural advantages that Germany enjoys over other technology locations.
Particularly noteworthy is that 51 percent of German manufacturers are using AI and machine learning solutions on the factory floor, an increase from 47 percent last year and above the European average. In the field of generative AI, Germany even leads all European countries surveyed: 63 percent of companies have already invested, an impressive jump of 39 percent by 2024.
The investments are already beginning to pay off. 13 percent of German manufacturers report that generative AI has delivered the highest return on investment of all technologies, up from 8 percent last year. Intelligent tools are being deployed extensively, with German manufacturers leading Europe in the use of AI for process optimization at 56 percent, cybersecurity at 53 percent, and quality control at 51 percent.
Despite these encouraging figures, considerable potential still exists. According to a Bitkom study, only 8 percent of German companies are currently using AI applications, even though two-thirds of all German companies consider artificial intelligence to be the most important technology of the future.
German mechanical engineering: global leadership despite challenges
Germany is the third-largest machine manufacturer in the world after China and the USA and maintains its position as the world export champion in numerous mechanical engineering segments. With an export volume of €194.42 billion, mechanical engineering ranks second among Germany's most important export goods.
German machinery exports reached a record high of €208.1 billion in 2023, corresponding to a nominal increase of 7.7 percent. The most important sales markets are the USA with €28 billion, China with €18.6 billion, and France with €14.5 billion. This geographical diversification demonstrates the global reach of German mechanical engineering expertise.
Market leadership in specific segments is particularly impressive. In 9 of 31 mechanical engineering sectors, companies from the EU-27 account for more than 50 percent of global trade, with German companies playing a leading role. EU manufacturers achieve particularly high shares in cleaning systems (65.7 percent), food and packaging machinery (63.4 percent), agricultural machinery (61.5 percent), and woodworking machinery (61.4 percent).
Strategic alliances and partnerships: A decisive success factor
The willingness of German companies to enter into strategic partnerships and business alliances is proving to be a decisive competitive advantage. This openness to cooperation makes it possible to pool expertise, share risks, and jointly develop new markets.
An outstanding example of this strategy is the data alliance between Siemens and European machine manufacturers. This alliance includes the machine tool manufacturers Grob, Trumpf, Chiron, Renishaw, Heller, the Machine Tool Laboratory of RWTH Aachen University, and the Voith Group. The core of the collaboration is the exchange of anonymized machine data to scale industrial AI.
This type of collaboration demonstrates the potential of German companies to create synergies through cooperation. The basic idea is that artificial intelligence works better the higher the quality and quantity of training data. German companies see this as an opportunity to leverage their strong industrial base to remain competitive with the US and China in the field of industrial AI.
Suitable for:
Europe's AI secret weapon: The strategic alliance between ASML and Mistral
A particularly significant development for Europe's technological sovereignty is the strategic partnership between the Dutch semiconductor giant ASML and the French AI startup Mistral AI. ASML is investing €1.3 billion in Mistral, becoming the largest shareholder with a stake of approximately 11 percent. This investment catapults Mistral to a valuation of €11.7 billion, making it Europe's most valuable AI company.
The significance of this alliance goes far beyond a mere financial investment. ASML is the undisputed monopolist for EUV lithography machines, which are the heart of every modern semiconductor factory and without which neither Apple nor Nvidia could produce their most advanced chips. Mistral AI, on the other hand, develops impressively efficient, cost-effective, and natively multilingual AI models that rival US giants OpenAI and Google.
This partnership symbolizes the emergence of a potentially seamless European value chain, from the foundation of chip manufacturing to intelligent software. It is a strong signal of Europe's digital sovereignty and a response to the technological dominance of the US and China.
Suitable for:
Our EU and Germany expertise in business development, sales and marketing
Our EU and Germany expertise in business development, sales and marketing - Image: Xpert.Digital
Industry focus: B2B, digitalization (from AI to XR), mechanical engineering, logistics, renewable energies and industry
More about it here:
A topic hub with insights and expertise:
- Knowledge platform on the global and regional economy, innovation and industry-specific trends
- Collection of analyses, impulses and background information from our focus areas
- A place for expertise and information on current developments in business and technology
- Topic hub for companies that want to learn about markets, digitalization and industry innovations
Robotics, AI & mechanical engineering merge – Germany’s next revolution
Global challenges: USA and China struggle with their own problems
While Germany often takes a self-critical view of its economic challenges, it should not be overlooked that other economic powers are also struggling with significant problems. The United States faces fiscal challenges due to expansionary policies that could promote growth in the short term but pose risks of inflation, debt, and stagflation in the long term.
China, on the other hand, is striving for a more sustainable growth model with lower growth rates, but is struggling with structural problems. The weakening real estate sector, local government debt, the sluggish stock market, and a lack of consumer confidence are weighing on the Chinese economy. Even with the comprehensive measures implemented by the Chinese government, a return to its former growth strength is not expected.
These global challenges offer Germany opportunities to strengthen its relative position. While other economic powers struggle with structural problems, Germany can leverage its strengths in industrial production, technological innovation, and strategic partnerships.
Suitable for:
The potential of deep tech: eight trillion euros by 2030
The Boston Consulting Group predicts that deep tech will generate more than eight trillion euros in added value worldwide by 2030. This corresponds to almost 50 percent of the projected gross domestic product of the 27 EU member states for that period. These figures illustrate the enormous economic potential inherent in pioneering technologies.
Due to their strong position in global research and development, Germany and Europe have the potential to take a leading position in deep tech. Collaboration between large corporations and agile networks, in particular, is seen as crucial for successfully expanding deep tech leadership.
The deep tech sector encompasses technologies such as artificial intelligence, quantum computing, biotechnology, and other highly complex innovations based on intensive research. While American deep tech companies received €215 billion in funding between 2018 and 2023, European companies raised only €58 billion during the same period. Less than 10 percent of deep tech unicorns originate from Europe, which represents a significant disproportion to the region's economic importance.
Suitable for:
Germany as a global market leader: Hidden champions and export hit
Germany maintains its position as the world's leading exporter in approximately 180 product categories, demonstrating the exceptional breadth and depth of German industrial expertise. From fertilizers to crane trucks, from microscopes to harvesting machinery – German companies dominate in a wide variety of sectors.
Current analyses identify 1,469 German global market leaders, 93 percent of which are industrial companies. This industrial dominance clearly distinguishes Germany from other economies and underscores its particular strength in the production of high-quality technical goods. The breakdown by industry shows that mechanical engineering leads with 308 global market leaders, followed by the automotive industry and its suppliers with 95, electrical engineering with 88, measurement and control technology with 72, and components with 66 global market leaders.
These hidden champions, as Professor Hermann Simon calls them, form the backbone of Germany's export strength. They often operate in niche markets, are technological leaders, and have a global outlook. Their strength lies in the combination of technical excellence, innovative strength, and long-term strategic thinking.
Technological sovereignty: Germany's strategic reorientation
The German government has recognized that technological sovereignty is crucial for Germany's future prosperity. With the High-Tech Agenda Germany, research, technology, and innovation policy focuses on six key technologies: artificial intelligence, quantum technologies, microelectronics, biotechnology, fusion and climate-neutral energy generation, as well as technologies for climate-neutral mobility.
The Framework Programme for Research and Innovation for Technological Sovereignty (FITS2030) implements this strategy. The goal is to significantly increase Germany's innovative and economic strength through investments in these technologies. This is to be achieved through faster research, development, and commercialization of technologies and through a consistent focus on building technology capacities in Germany and Europe.
Germany must be able to develop key technologies itself and exploit their potential. Against the backdrop of crisis situations such as the COVID-19 pandemic, the war in Ukraine, and increasing geopolitical tensions, technological sovereignty is more important than ever.
Regional strengths: Baden-Württemberg as an innovation center
The regional distribution of German technology companies reveals clear clusters. Baden-Württemberg has established itself as a particular hotspot for robotics and AI research, followed by Bavaria and North Rhine-Westphalia. This concentration creates synergy effects through proximity to research institutions, suppliers, and partners.
Baden-Württemberg benefits from a unique ecosystem of global corporations, innovative medium-sized companies, excellent universities, and research institutes. Companies such as Mercedes-Benz, Bosch, Trumpf, and SAP have their roots here and are driving technological development forward. The close integration between industry and science enables the rapid transfer of research results into marketable products.
Challenges and opportunities: The way forward
Despite its strong position, Germany and its technology companies face significant challenges. International competition is intensifying, particularly from Chinese suppliers encroaching on traditional German domains with cost-effective alternatives. Robotics production in Germany reached only 31,200 units in 2024, 10 percent below the previous year's figure.
At the same time, the convergence of robotics, AI, and mechanical engineering is opening up new opportunities. The integration of these technologies enables entirely new fields of application and business models. Collaborative robots, AI-supported quality control, and autonomous production systems are just a few examples of the possibilities arising from this technological fusion.
Germany has the ideal conditions to succeed in this transformation process. The combination of highly qualified specialists, a strong industrial base, innovative SMEs, and a willingness to enter into strategic partnerships forms a unique foundation for technological progress.
The importance of data and AI integration
A key success factor for the future lies in the intelligent use of data. Industry 4.0 in particular allows Germany to draw on an exceptionally large reservoir of digital machine data, as well as customer and company data. The potential is enormous, because data is a valuable resource whose correct and profitable use is crucial for the future.
German mechanical engineering companies have the advantage of already possessing extensive data from production and the use of their machines by customers. This data can be analyzed using algorithms to optimize sales, purchasing, and logistics. Customer behavior can be better understood and the product range continuously improved.
Skilled workers and qualifications: The key to success
A critical success factor for further development is the availability of qualified specialists. Thirty-five percent of companies cite the shortage of skilled personnel as one of the biggest challenges in implementing AI. Germany must therefore invest more heavily in the training and continuing education of specialists in robotics, AI, and mechanical engineering.
The combination of theoretical knowledge and practical experience that traditionally characterizes the German education system is a key advantage. The dual training system and the close ties between universities and industry create the foundation for practice-oriented training of skilled workers.
Innovation and Entrepreneurship: New Business Models
The merging of robotics, AI, and mechanical engineering opens up entirely new business models. Service robotics, autonomous production systems, and AI-assisted maintenance are just a few examples of the innovations emerging from this technological convergence. German companies have the opportunity to not just be technology suppliers, but to offer complete solutions and services.
The move toward data-driven business models enables continuous added value generation. By analyzing machine data, companies can offer predictive maintenance, optimize processes, and develop new services. This transformation from a product-centric to a service-centric approach offers significant growth opportunities.
International cooperation: Europe as a technology bloc
Germany can best develop its strengths by strategically leveraging its position in Europe. Cooperation with other European countries, as demonstrated by the ASML-Mistral alliance, can strengthen Europe's technological sovereignty. By pooling the expertise of various European countries, a powerful bloc is created that can compete with the US and China.
The EU Platform for Strategic Technologies for Europe (STEP) is a key component of this strategy. It aims to expand production capacities in digital technologies, clean technologies, and biotechnologies and strengthen value chains.
Sustainability and climate protection: new market opportunities
Integrating sustainability considerations into technology development opens up new market opportunities. German companies can leverage their expertise in developing energy-efficient robots, environmentally friendly production processes, and sustainable materials to position themselves in growing green tech markets.
Germany's High-Tech Agenda explicitly considers technologies for climate-neutral energy generation and mobility. This focus on sustainability not only meets societal expectations but also opens up new export markets in countries seeking to decarbonize their industries.
Digital sovereignty: independence through own technologies
Developing our own AI models and robotics systems is not only economically viable, but also strategically necessary. Dependence on foreign technology providers poses risks for German industry. Initiatives such as the collaboration between German and European companies demonstrate how digital sovereignty can be achieved.
Mistral AI, a European alternative to ChatGPT, is an important step in this direction. The French company is developing AI models that work better with European languages, are designed to respect data privacy, and are closer to European culture than American or Chinese alternatives.
Germany at a turning point
Germany is at a technological turning point that will determine its future as a location. The combination of robotics, AI, and mechanical engineering offers unique opportunities to lead German industry into a new era. With 278,900 operational robots, leading positions in 180 export categories, and 1,469 global market leaders, Germany has a solid foundation for this transformation.
The challenge lies in intelligently combining these strengths and strengthening them through strategic partnerships. The willingness of German companies to enter into alliances is a crucial success factor. Examples such as the Siemens Data Alliance or the ASML-Mistral partnership demonstrate how cooperation can create synergies that individual companies could not achieve.
The potential of eight trillion euros in global value creation through key technologies by 2030 underscores the dimensions of the impending transformation. Germany has all the prerequisites to generate a significant share of this value creation. The combination of technical excellence, industrial expertise, and strategic partnerships forms the foundation for a successful future.
While other economic powers struggle with structural challenges, Germany can strengthen its relative position. The US faces fiscal risks, China struggles with structural problems, and Germany can use this situation to expand its technological leadership.
The time for self-pity must be over. Germany has all the ingredients for technological success: highly qualified specialists, innovative companies, strong research institutions, and the willingness to engage in strategic collaborations. Now it's time to mobilize these strengths and win the game for the next stage of technological development.
The path is clear: Through the intelligent combination of robotics, AI, and mechanical engineering, Germany can not only maintain its position as a leading industrial nation, but even expand it. The future belongs to those who boldly move forward and seize the opportunities offered by technological transformation. Germany has all the prerequisites for this – now it must seize them.
Your global marketing and business development partner
☑️ Our business language is English or German
☑️ NEW: Correspondence in your national language!
Konrad Wolfenstein
I would be happy to serve you and my team as a personal advisor.
You can contact me by filling out the contact form or simply call me on +49 89 89 674 804 (Munich) . My email address is: wolfenstein ∂ xpert.digital
I'm looking forward to our joint project.
☑️ SME support in strategy, consulting, planning and implementation
☑️ Creation or realignment of the digital strategy and digitalization
☑️ Expansion and optimization of international sales processes
☑️ Global & Digital B2B trading platforms
☑️ Pioneer Business Development / Marketing / PR / Trade Fairs
🔄📈 B2B trading platforms support – strategic planning and support for exports and the global economy with Xpert.Digital 💡
B2B trading platforms - Strategic planning and support with Xpert.Digital - Image: Xpert.Digital
Business-to-business (B2B) trading platforms have become a critical part of global trade dynamics and thus a driving force for exports and global economic development. These platforms offer significant benefits to companies of all sizes, particularly SMEs – small and medium-sized businesses – which are often considered the backbone of the German economy. In a world where digital technologies are becoming increasingly prominent, the ability to adapt and integrate is crucial to success in global competition.
More about it here:
