What in your view are the top five main trends in the EU market for electrical equipment and materials in general?
In my opinion, the top five trends in the EU market for electrical equipment and materials in general are:
- Sustainability: achieving the energy transition and reducing carbon consumption
- Digitalization: Optimizing digital technologies for the benefit of industry and society
- Connectivity (Internet of Things): Using insight to make data-driven decisions
- Digital commerce: Online selling for technical industries
- Omni-channel selling: Creating a hybrid buying journey by combining on and offline customer touch-points
What do you believe are the main drivers of these trends?
The main drivers of sustainability are of course carbon reduction and achieving the energy transition, but there are more specific drivers at play too.
The importance of circularity is now unavoidable and is in fact an expectation within our marketplace. New legislation is developing to govern circularity and our value chain must fulfil the requirement if we are to continue to grow.
Digitalization and IoT (connectivity)
The key driver behind digitalization and connectivity is an increasing desire for data and data- driven decisions. The more data we can gather from the installed technology base and interpret, the more informed our business decisions can become.
Understanding how and where we consume power, identifying energy reduction and cost saving opportunities, learning how to improve safety and where to invest to enhance performance all come from collecting and analyzing data.
Digital commerce and omni-channel selling
The COVID pandemic was a significant driver behind the global trend of digital commerce and the adoption of omni-channel selling, which is why online sales are estimated to reach $8.1 trillion by 2026 – around 56% more than in 2021.
Now more than ever before, purchasers want a combination of on and offline experiences throughout the buying journey, which is a direct reflection of how digitalization has transformed our society.
For technical industries like ours, digital buying processes are increasing in line with this global trend, albeit with face-to-face selling, field sales, and in-person consulting, still playing an important role.
I estimate that by the end of 2024, 40% of sales for ABB solutions will be completed online, compared to zero just ten years ago.
What in your view have been the main drivers of growth in the EU market for electrotechnical goods and materials in recent years?
Sustainability and energy efficiency have of course driven growth in the EU market for electrotechnical goods and materials in recent years. More specifically, we have also seen a real demand for building refurbishment designed to improve building quality and performance, plus a need to create retrofitting solutions for upgrading and extending the usable life of a system.
On the other hand, there have also been significant challenges for growth across the EU market in recent years. Inflation has really impacted business, and so too has the shipping crisis and of course COVID lockdown restrictions and resulting supply chain issues.
How do you see the EU market for electrotechnical goods and materials evolving in the next 5-10 years?
The global economy in developing and emerging markets, will demand more and more energy in the coming years as the world goes electric. Electricity will reach up to 50% of final energy consumption for buildings, transport and industry by 2050, growing from 17% in 2010.3 With this as the backdrop, energy cost inflation, volatility and supply insecurity are a problematic combination that need monitoring closely in the near term.
Respondents to ABB’s recent Energy Insights Survey Report warned that rising energy costs may delay progress towards their decarbonization goals. We can’t stand by and watch this happen, and must support businesses at large in their sustainability and energy cost reduction efforts. The world is counting on industry, which accounts for more than half of total greenhouse gas emissions,4 to deliver on climate change commitments. As leaders, we collectively need to step up to that challenge.
We need to move more quickly on both the supply and demand sides of the equation, and harness technology tools and new ways of working to optimize energy across the value chain. Supporting businesses in the take-up of proven technologies in energy management, efficiency and renewable energy generation and storage will help to insulate them from the impacts of fluctuating energy costs and security concerns. It will also support the green energy transition.
The impacts and potential ripple effects of energy pricing and security on businesses should not be underestimated. However, there is cause for optimism amidst uncertainty and challenges.
With the right approach, businesses don’t have to trade off climate and growth goals. Reduced energy costs and increased energy reliability should in turn alleviate cost pressures and enable investment in key areas of business growth, people and sustainability to be maintained.
Much of the support and technology that can help businesses – large or small – to optimize their energy management and reduce costs, is already widely available and at a reasonable cost. Businesses are not alone. ABB Electrification and our channel partners are leaders in this field and are collaborating with companies of all shapes and sizes, and across all sectors, to find solutions to their energy concerns, challenges and opportunities.
What in your view are the top five regulatory developments affecting the market?
We are seeing less regulations governing the performance of our systems, and more governance for the recycling and circularity of the products we place onto the market.
Governing bodies throughout the EU market want to ensure that manufacturers take responsibility for recycling the materials they use to produce the systems they sell.
The other ongoing regulatory development is around data security. The more we collect, use and store data, the more regulation is introduced to govern how we keep this information secure.