Monitoring the twin transition of industrial ecosystems

Innovative electronics and the electronics industrial ecosystem have a high relevance in the con-text of the digital and green transition. Electronics is a central underlying technology for digitisation and also plays a significant role in enabling our society and economy to become more environmentally sustainable. Recently, there has been a significant increase in demand for electronics and semiconductors due to the advancement of digitalisation, automation, and the widespread use of e-mobility. The semiconductor market grew by 9% in 2020 and by more than 25% to about €470 bn in 2021. Europe’s contribution to the global semiconductor industry accounts for a share of 9.3%, providing technologies largely at mature nodes. The EU is a powerhouse of advanced manufacturing equipment for the semiconductor industry. In terms of broader electronics technology, the EU is competitive in the electronics for the automotive industry producing ca. 27% of the global automotive electronics, industrial electronics contributing 20% to the global market, and green energy and power electronics. The EU produces 22% of the global aeronautics/defence and security electronics and 19% of the health & care electronics. Europe’s strength lies especially in complex, embedded electronics systems and specialised electronics systems. However, the EU has significant weaknesses in design of advanced technologies. Also, the EU has a weaker position in the stand alone and consumer electronics segment. The electronics industrial ecosystem is characterised by extreme regional specialization and strong interdependencies throughout the value chain, putting supply at risk in case of disruptions. The EU is increasingly dependent on sem-iconductors and chips produced in other regions of the world - especially those used for communication electronics, data-processing and computing, including processors. Large scale production capability and investments in advanced technologies play an important role for the competitiveness of the semicon-ductor and the electronics industry as a whole. The EU lost a large volume of its production capacities during last decades and needs to mobilise a lot of resources to expand its advanced pro-duction capacity. However, there are many competitive small and medium-sized enterprises (SMEs) in the EU that offer specialised electronics for various applications. The present research on the twin - green and digital - transition of the electronics industrial ecosystem has shown that the EU27 is lagging behind and losing further ground to China and the USA in related technological developments. Tech startups play an important role in providing innovative technologies that drive digital and green transition. Although the EU27 becomes an increasingly important location for electronics tech startups, it remains well behind the USA and China.