The Future of Europe’s Instruments and Sensors Sectors


The EU’s instruments and sensors sector is facing an era of rapid change. Globalization, the emergence of low-cost competitors, a looming labor shortage, changing consumer values, and technological innovations in related fields are creating both opportunities and challenges. Though it may be difficult for firms in the sector to change, the future holds new opportunities for those looking to establish markets in emerging high-tech fields.

3 Forecasts

  • The global instruments and sensors market—worth $187 billion in 1999—is expected to grow annually by over 5% for the foreseeable future. The EU’s instruments and sensors sector—i.e., organizations involved with “the design and manufacture of measuring, sensors, and process-control equipment”—is hoping to benefit from this growth.
  • However, they are experiencing some challenges such as the forces of globalization, demands for product/ service bundling, low-cost competitors, and new technologies, as well as shifting social and consumption trends.
  • These forces are creating new market conditions that require strategic responses from the sector. Along with this challenge will come the opportunity for businesses within the sector to expand into new markets requiring more-sophisticated measurement and process-control devices.

3 Trends

  • Globalization continues to change many aspects of the EU’s instruments and sensors sector.
  • Commoditization within the instruments and sensors industry is increasing.
  • The demand for advanced measuring devices is growing.


Technological assumptions: The instruments and sensors sector can keep pace with technological breakthroughs in other high-tech fields.

  • Europe’s nanotechnological capability will become comparable to those of its main competitors, the US, Japan, and China.
  • High-tech firms in other industries will be willing to share technological breakthroughs with instruments and sensors firms.
  • Breakthroughs in materials science and nanotech will continue.

Societal assumptions: Higher-education institutions, customers, and suppliers will be willing to form strategic partnerships with instruments and sensors firms.

  • Low-cost competitors will not be able to compete on quality or provide innovative cutting-edge products and services compared to those offered by European firms.
  • Elderly workers will be willing to work longer than they did in the past.

3 Business Implications

  • Future growth opportunities for instruments and sensors firms lie in a variety of niche markets. Different skill sets will be required to serve each market; e.g., the skills required to serve a nanotech company will be different than those required to serve a healthcare provider. This may make it impossible for one firm to adequately serve all the growth markets. Becoming a specialist that serves only one or a handful of these growth markets could prove more financially rewarding then attempting to generally serve them all. Conducting a strategic analysis to uncover what markets one’s company can best serve could be the first step in deciding what growth markets to pursue.
  • In an environment where strategic partnerships are forecast to become more common, companies should be concerned not only with their internal process validation, but also with the process validation of their partners as well. Companies should be especially careful when outsourcing manufacturing functions to countries that have a substantially different regulatory environment. A number of high-profile recalls over the past few years have demonstrated the negative consequences that can happen when partners do not see eye-to-eye on process validation.
  • Worker migration might rise if the demand for skilled technology laborers and the shortage of supply in some regions of the world continue, especially if there is a draw of higher salaries. Instruments and sensors firms and those in related fields could suffer from knowledge leakage if key employees move to other regions enticed by higher salaries.