Innovations Driving Economic Growth in 2025

As we close out 2025, I’ve been reflecting on the seismic shifts that defined industry, and what they signal for the future. 2025 was a year of compressed transformation. Persistent volatility in energy prices, supply chains, and labor markets accelerated adoption of IoT, AI, edge computing, and 5G. These technologies are no longer optional, they’re the backbone of modern industrial ecosystems. Analysts confirm this trajectory: 🔹 Deloitte reports that 80% of manufacturing executives plan to allocate 20% or more of their improvement budgets to smart manufacturing initiatives, prioritizing real-time visibility and predictive maintenance.  🔹 McKinsey & Company finds that 88% of companies now use AI in at least one function, but scaling remains a challenge - high performers redesign workflows to unlock growth and innovation.  🔹 Market forecasts show industrial automation growing from $206B in 2024 to $378B by 2030 (10.8% CAGR), driven by Industry 4.0, and AI integration.  🔹 Edge computing is surging too, expected to reach $45B by 2033, enabling low-latency analytics and predictive quality control. What does this mean for our industry? Automation is becoming open, software-defined, and decoupled from proprietary hardware, creating a foundation for adaptability, sustainability, and resilience. AI is moving from pilot projects to embedded intelligence, powering predictive maintenance, autonomous operations, and sustainability gains. At Schneider Electric, we see this every day: open, software-defined automation unlocks innovation through openness, interoperability, and flexibility, enabling manufacturers to scale faster and respond dynamically to market shifts. Looking ahead: AI will not just augment operations, it will redefine competitive advantage. From generative design to autonomous workflows, the next wave of industrial transformation is already here. 👉 What are your reflections on 2025, and where do you see the biggest opportunities in 2026 and beyond?  

GenAI is emerging as a new engine of US economic performance 🤖 As Lydia Boussour and I highlight in our latest analysis on AI-powered growth, generative AI is now leaving clear, measurable footprints in the data. 💸 AI-related investment in software, R&D and information-processing equipment surged at an 18% annualized rate in the first half of 2025 — contributing about 1pp to Q2 GDP growth. Since 2020, AI-linked investment is up 48%, while non-AI investment has been broadly flat. 📊 Adoption is accelerating. The share of US firms using AI to produce goods and services has jumped from 3.7% to 10% since late 2023, led by information, professional services and finance. ⚙️ Productivity signals are emerging. Frequent AI users report meaningful time savings, pointing to gradual — but real — efficiency gains. 🔍 As rapid GenAI adoption reshapes industries, investment in capabilities, workforce upskilling and digital infrastructure will be critical for competitiveness. And because traditional metrics like GDP understate AI’s full impact, leaders should focus on the underlying transformation rather than the headline numbers. 👇 Want to learn more via EY-Parthenon

Over 2 billion 5G subscriptions in just 5 years make it the fastest technology deployment in history. Yet beneath these numbers lies a stark truth: the real promise of 5G—automation at scale, ultra-low latency, industrial transformation—remains largely untapped in most countries. Our new paper, “Next Wave of Mobile Innovation”, makes the case that the second half of 5G isn’t about marketing—it’s about mastery. Nations and operators that embrace Standalone 5G, enterprise integration, and industrial automation today are not just building networks, they are building the backbone of their future economies. Those who delay risk being permanently left behind. 📌 In this paper, we: - Introduce the Mobile Infrastructure Maturity Index—a framework to measure how nations translate 5G into GDP growth, jobs, and competitiveness. - Showcase real-world industrial use cases—from fully automated ports in Rotterdam, to 5G-powered hospitals in Singapore, to mines in Australia—that prove when infrastructure, policy, and diffusion align, transformation follows. - Map out the strategic roadmap for 2025–2030, highlighting how operators can unlock new revenue streams and establish foundations for 6G leadership. The lesson is clear: infrastructure without diffusion is a sunk cost; diffusion without infrastructure is a dead end. Only when the two advance together does innovation scale, industries transform, and economies grow. 🌍 As the world races toward 6G, the winners will not be defined by coverage maps but by the industries they transform and the economic ecosystems they build. 👉 Read the paper here: https://lnkd.in/grK2Td_Y The future of mobile innovation isn’t about connections—it’s about transformation. Let’s build it together. Erik Ekudden Magnus Ewerbring Peter Linder Ericsson Chetan Sharma Consulting

The December 2025 The World Bank Gulf Economic Update, by my Middle East and North Africa Economic Policy colleagues Khudadad Chattha, Ashwaq Maseeh, Hoda Youssef, Sibel Kulaksiz, as well as Andrea Barone, Anila Graupp, Dhari AlSaleh, Dina Richani, Mohamed Ahmed Ashour, Samia M. Melhem, and Yacine Ouahioune was published last week. The report analyzes recent economic developments and provides forecasts for Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. It also includes a stocktaking exercise on economic diversification, and a special focus chapter on digital transformation. Some important points: 📈 Economic growth is accelerating across the GCC in 2025, supported by structural reforms and rapid digital innovation, with forecasts ranging from 2.7% in Kuwait to 4.8% in the UAE. 🤖 The report highlights a surge in digital transformation and AI adoption, enabled by advanced telecom networks, 5G coverage above 90%, and major investments in data centers and high-performance computing. 🔄 Economic diversification has advanced but remains incomplete, with hydrocarbons still dominating fiscal revenues and non-oil exports remaining modest. 🚀 Saudi Arabia and the United Arab Emirates are emerging as regional and global AI leaders, supported by vibrant startup ecosystems, strong venture funding, and rapid integration of generative AI in government and industry. 👩🔬 Women’s participation in STEM fields exceeds the global average, strengthening the region’s digital competitiveness and talent base. 💡 Key recommendations include boosting SME adoption of AI, strengthening innovation ecosystems, expanding reskilling programs, and enhancing regional cooperation, including through digital infrastructure and AI centers of excellence to support a unified MENAAP digital market. 📑 Press release: https://lnkd.in/gZkK8zUR 📘 Report: https://lnkd.in/gJwmMbpG

As we close 2024, below are some key technology trends expected to shape 2025. These trends highlight a blend of cutting-edge technologies driving innovation across industries while addressing sustainability and societal challenges. 1. Artificial Intelligence (AI) Advancements ⚡️Generative AI: Continued growth in generative AI models (like GPT-4, MidJourney, or DALL-E), with more sophisticated content generation for text, images, and video. ⚡️AI in Industries: AI adoption in healthcare, education, finance, and customer service to optimize workflows, automate processes, and make predictions. ⚡️Explainable AI (XAI): Increasing focus on transparency and accountability in AI decision-making. 2. Quantum Computing ⚡️Advances in quantum hardware and algorithms, bringing quantum computing closer to solving real-world problems like cryptography, pharmaceuticals, and complex simulations. 3. 5G and the Path to 6G ⚡️Widespread implementation of 5G networks enabling faster, low-latency connectivity. ⚡️Early research and experimentation for 6G networks to achieve even faster speeds and support advanced IoT and AI applications. 4. Immersive Technologies (AR, VR, and XR) ⚡️Enhanced AR (Augmented Reality) integration in mobile devices and enterprise solutions. ⚡️Lighter, more affordable AR/VR hardware enabling mainstream adoption. 5. Robotics and Automation ⚡️Increased use of robotics for precision work in manufacturing, healthcare (surgery robots), agriculture, and logistics. ⚡️Growth in humanoid robots and AI-driven automation tools for businesses. 6. Sustainable and Green Technologies ⚡️Energy-efficient data centers and green AI practices to reduce computing's environmental impact. ⚡️Advancements in renewable energy technologies like solar, wind, and battery storage. ⚡️Focus on circular economy systems, including recycling and sustainable materials. 7. Cybersecurity Evolution ⚡️Rise in AI-driven cybersecurity tools to combat sophisticated cyber threats. ⚡️Increasing importance of zero-trust architecture for enhanced protection. 8. Edge Computing ⚡️Growth in edge computing to process data closer to the source, enabling faster real-time processing for IoT and AI applications. ⚡️Integration with 5G and cloud services for more efficient networks. 9. Biotechnology and Health Tech ⚡️Advances in CRISPR gene editing for medical treatments and agriculture. ⚡️Increased deployment of AI-powered diagnostics and precision medicine. ⚡️Growth of wearable health tech for real-time monitoring and personalized healthcare. 10. Autonomous Systems ⚡️Continued advancements in autonomous vehicles (cars, trucks, and drones). ⚡️Smart cities integrating autonomous infrastructure for public transportation and deliveries. 11. Human-AI Collaboration ⚡️Enhanced tools for human-AI collaboration (AI copilots) in creative, technical, and decision-making tasks. ⚡️AI-enhanced education platforms offering personalized learning experiences. #ai #Immersive #ar #vr #techtrends

Emerging Technologies of 2025: #Innovation and Societal Impact . The World Economic Forum report spotlights breakthrough innovations poised to transition from scientific discovery to real-world application, aiming to catalyze dialogue and shape technology agendas. It details ten specific technologies, ranging from structural battery composites and osmotic power systems to #AI watermarking and engineered living therapeutics, explaining their novelty, development progress, and transformative potential across various sectors like #energy , #healthcare , and urban systems. •Key Themes of Emerging Technologies: The 2025 technologies reveal exciting patterns, often representing a convergence of fields: ◦Combining Energy Systems with Advanced Materials: This includes innovations like structural battery composites, which integrate energy storage within load-bearing structures, improving functionality and efficiency in transport. ◦Using Biological Approaches to Improve Human Health: Examples are engineered living therapeutics (genetically engineered microbes producing medicines in the body) and GLP-1s for neurodegenerative disease (repurposing drugs for Alzheimer's and Parkinson's). ◦Reimagining Industrial Processes for Sustainability: This involves technologies such as green nitrogen fixation for low-carbon ammonia production and nanozymes (laboratory-produced nanomaterials with enzyme-like catalytic properties). ◦Creating New Foundations for Trust in Connected Systems: This includes collaborative sensing (distributed sensors connected to AI systems for context-aware decisions) and generative watermarking (invisible markers in AI-generated content to verify authenticity) Each technology's overview includes its strategic outlook, ecosystem readiness, and the challenges to its widespread adoption, emphasizing their capacity to address complex global challenges and foster resilient, sustainable societies.

Technology has come a long way—from being a tool of convenience to becoming the driving force behind transformation. Each year, we witness remarkable advancements that reshape industries, redefine possibilities, and address challenges we never thought possible. As we step into 2025, the pace of innovation continues to accelerate, bringing with it opportunities to create a smarter, and much more resilient world.    Here are 5 transformative #TechTrends that take the spotlight in 2025: 🚩 #CustomAI: Customized AI is becoming a game-changer, allowing organizations to create bespoke solutions for their unique needs. By using domain-specific data, businesses can solve niche problems with precision, opening doors for personalized experiences and industry-specific innovations. 🚩 The Rise of Agentic AI: Generative AI is entering a transformative phase of “agentification,” evolving from task-specific tools to specialized, interconnected AI agents. Soon, we will witness the emergence of “superagents,” orchestrating interactions between multiple AI systems to enhance collaboration, efficiency, and reliability.    🚩Future-Ready Supply Chains: Powered by AI, IoT, and blockchain, supply chains are becoming more agile, sustainable, and resilient. Technologies like low-earth orbit satellites are increasing connectivity, enabling real-time tracking and visibility, while regulatory frameworks push for greener, more transparent processes. 🚩#CleanTech: As we accelerate the shift towards renewable energy, AI will play a crucial role in optimizing systems and advancing technologies like Small Modular Reactors (SMRs) and nuclear fusion. This fusion of AI and clean tech promises better energy efficiency and a sustainable future. 🚩 #Cybersecurity: With AI-enhanced cyberattacks on the rise, cybersecurity is more critical than ever. AI-powered defenses, alongside advancements in Post-Quantum Cryptography, will ensure that businesses stay resilient and confident in their digital ecosystems, future-proofing their data security systems. These trends are a testament to how innovation can drive meaningful change, solve critical challenges, and empower industries to reimagine the future. As we stand on the brink of 2025, the question isn’t just about adopting these technologies but how we can harness them to create a smarter, more sustainable, and inclusive world. Surabhi Agarwal, The Economic Times

This morning, we released a preview to the press of the TechnoVision Top 5 Tech Trends to Watch in 2025. Technology is advancing at an unprecedented pace, and our teams have diligently worked to highlight the transformative technologies that we anticipate will reach a pivotal point next year. In addition to leveraging insights from our best experts across all technology domains, we conducted a global study of 1,500 top executives and 500 venture capitalists this year to gain a clear perspective on emerging technology trends. What stands out for us in 2025 is that AI (and Gen AI) are leading the pack. Their ripple effects are also accelerating advancements in adjacent domains, including robotics, cybersecurity, supply chains, and even the energy sector. Drawing from our research and the views of our top experts, here’s a brief snapshot of the Top 5 technology trends set to shape the business landscape in 2025: 🤖 Generative AI: From copilots to reasoning agents, AI systems are evolving into specialized, interconnected agentic systems, enabling autonomous and efficient decision-making. 🔐 Cybersecurity: New threats, new defenses – AI is reshaping the landscape, driving increasingly sophisticated cyber threats and equally advanced defenses to counter these new risks. 🦾 AI-Driven Robotics: Robots powered by advanced AI are blurring the lines between humans and machines, with the promise to transform entire industries. ⚛️ Energy: AI driving the Nuclear Agenda – The growing energy demands of technology in the AI era are driving major tech companies to make significant investments in nuclear energy, potentially accelerating both the deployment of nuclear projects and advancements in reactor technology. 🚚 Next-Gen AI-Assisted Supply Chains: Agile, AI-assisted, and sustainable supply chains are becoming the backbone of modern business resilience and innovation. The full study on these top 5 trends, along with other emerging technology trends, will be released in a global report available at the opening of CES in Las Vegas next year. Stay tuned! https://lnkd.in/e3SWs4iN #top5techtrends Robert (Dr Bob) Engels Marco Pereira Sally Epstein Laurent BROMET Paul Shoemaker Emmanuelle BISCHOFFE CLUZEL🌍

✨ #TeachMeTuesday: Unpacking Innovation & Productivity This week, we are diving into a paper by Pierre Mohnen, Jacques Mairesse, and Ad Notten (2025), Innovation and Productivity: The Recent Empirical Literature and the State of the Art (https://lnkd.in/eRRd8J3b). It’s a key read for anyone interested in how innovation drives economic growth—and it resonates deeply with the Global Innovation Index (GII) 2022 theme, What is the future of innovation-driven productivity growth? https://lnkd.in/eNGxDFJT Klaas de Vries Bart van Ark We showed there that evidence is building for two types of novel innovation waves emerging, each with the potential for large welfare impacts, aka the #Digital #Age and #Deep #Science #innovation waves, and they matter in the below narrative too. 🔍 Key Findings The authors analyze a decade of empirical studies (2013–2023) using micro-data to dissect the innovation-productivity link, and their findings are: ✨Innovation boosts productivity—but not evenly: Process innovations in manufacturing deliver a 5-7% productivity gain on average, while service sectors lag at 2-3%, exposing a sectoral divide. Compare to Table 10 here: https://lnkd.in/eNGxDFJT ✨Firms adopting AI and IoT alongside traditional R&D see productivity gains of up to 12%, compared to 6% for R&D alone, with green technologies (e.g., renewable energy tech) contributing an additional 3% boost in energy-intensive sectors. ✨R&D’s diminishing returns: Doubling R&D spending only yields a 1.2% productivity increase in OECD countries, as absorption capacity stalls—challenging the “more R&D, more growth” mantra. ✨Commercialization is the bottleneck: Only 35% of patented innovations in Europe reach the market, compared to 50% in the US, highlighting a critical gap in translating R&D into viable products—echoing the European Innovation Paradox. ✨Biotech and pharmaceuticals lead with a 9% productivity boost from innovation, driven by high R&D intensity, while traditional sectors like agriculture see just 1-2%, underscoring the need for sector-specific innovation strategies. 💡 What’s Next? The authors suggest future research should focus on non-technological innovations (like organizational changes) and their productivity impacts—something I’d love to see in the next GII! How can we better measure and support these “softer” innovations? 🏷️ #Innovation #Productivity #GlobalInnovationIndex #EconomicGrowth #Research #Policy

In my last Forbes Australia article, I explored the major AI milestones of 2024—a year where innovation moved faster than most of us could blink. But what excites me even more is 2025, a year where senior executives and directors will sign OPEX to scaling (not trial only) AI initiatives. Here’s what I expect to dominate boardrooms and strategy sessions in 2025: 📌AI gets real budgets: From my own experience and reports from AICD and industry events, AI will be funded for customer service, translations, coding, and baseline productivity (summary of emails, research). Efficiency will be the key driver - Cost-cut as growth engine. 📌Got a #startup idea? B2B and infrastructure continue to dominate. Consumer markets are crowded, and predicting winners will be difficult - Hold fundrasing it for now 📌"Boring" verticals shine: Expect investment in sectors like healthcare, government, real estate, and legal. Healthcare, in particular 📌#Newskills: With new GenAI features come new challenges, especially in cybersecurity. CTOs and CIOs will face increasing complexity in keeping systems secure. 📌Collaboration as a fetaure: Tools like ChatGPT and Salesforce are evolving to prioritise teamwork - that is obvious. As they increase the B2B sales they need these tools to work as enterprise workflow, not just inidividual production machines. Read the full article here: https://lnkd.in/gNPxajqX