Artificial intelligence (AI) combined with increasing digitalization is ushering in a new era in industry. Many production tasks can be conducted more efficiently and accurately with the help of AI, which promises to increase productivity and efficiency as well as the variety of variants with further process automation. The possibilities and potential of AI for production are well known, but its actual prevalence and feasibility for production processes are not well documented. This study by Fraunhofer ISI now provides an overview of the use of smart technologies for basic applications in production in Germany based on the most recent data from the regular survey of the manufacturing industry. 

“Our results clearly show that AI solutions are already used in Germany’s manufacturing industry today. About 16 percent of industrial firms integrate intelligent systems directly into their production processes”, says Angela Jäger, project manager in the Industrial Change and New Business Models business unit. As expected, company size plays a relevant role. Large enterprises in Germany are significantly more active in using AI in production. Approx. 30 percent of firms with at least 500 employees use AI, while this figure is only about 16 percent for medium-sized firms with 100 or more employees. Among small enterprises with fewer than 50 employees, 13 percent use an AI solution in their production process. 

The diffusion of AI solutions is currently still heavily influenced by structural factors

Relevant differences are also apparent when looking at sectors and the production characteristics of manufacturing companies. AI solutions are currently by far the most widespread in vehicle manufacturing. One in three companies in this sector uses an AI application in at least one production area. In contrast, only 8 percent of companies in the chemical and pharmaceutical industry use an AI application. This indicates how important production characteristics still are for the spread of AI in production. Primarily firms with large series production and complex products are already using AI. Today’s AI solutions seem to be better suited to certain production structures. 

This is likely to change any time soon. Companies’ plans indicate that a significant upturn in the spread of AI can be expected in selected industries: Especially in the electrical industry, the share of companies that will use AI solutions in production for the first time in 2025 is clearly above average at 19 percent.

Digital context is crucial

In addition to structural characteristics, companies are already distinguished by their use of complex, digital systems in production. These companies have a basic digital foundation and the skills to handle more complex data. AI solutions are used for specific, targeted applications. Fraunhofer ISI’s analysis reveals that manufacturing companies usually only use AI solutions in one area and that high use is not expected in the near future. 

In-depth analyses also showed that companies already using one AI application are especially likely to plan the use of AI in other areas of production as well. “One in five firms that already uses AI is planning to expand its use by 2025. Once fundamental issues of using AI have been clarified and the necessary conditions have been created, the main hurdles for further application have often been overcome”, explains Heidi Heimberger, a PhD student in the team. Despite this, the research scientists are only expecting an initial moderate increase in the number of companies using AI in production in the future. These technologies will become standard soon only in large enterprises. 

Companies applying AI invest more in further training

It is noticeable that companies using AI applications invest more in further training and education measures, particularly those promoting problem-solving skills and creativity. The framework conditions and qualification requirements needed to meet this challenge are interesting. As Heidi Heimberger summarizes, “The successful introduction and use of AI solutions not only requires technical skills, but especially a basic understanding of data use, problem-solving strategies and creative thinking”.

Fraunhofer has carried out the German Manufacturing Survey at regular intervals since 1993. The survey, which is conducted every three years, covers a representative sample of around 1,600 companies from the manufacturing sector in Germany. The survey’s comprehensive and fact-based design enables detailed analyses of the performance and degree of modernization of manufacturing companies in Germany.