The Technology and Science of Light- how Fast is the European Photonics Industry Growing?

“With a global growth rate of CAGR 7 %, photonics is growing faster than many other high-tech industries, for example, the IT industry (4.5%), Medtech (4.9%), and Microelectronics (4%).” – Giorgio Anania

The Photonics industry has proved to be one of Europe’s most resilient and fast-growing industries in recent years growing at more than double the rate of global GDP outperforming other market sectors segments according to the new ‘Market Research Study – Photonics 2020’ by deep technology research group Tematys. Covering the period from 2015-2019, the industry grew at a CAGR of 7% per year and was worth €103 billion.

Job uptake significant

An additional 30,000 jobs, taking the total employee level to over 390,000 employees during this time, represented an annual growth rate of 2.1% - twice as fast as European Manufacturing for the EU28 (around a 1% CAGR), the analyst said.

Revenue growth for this same period in Europe (7% per year) was three times that of the entire European GDP (2.3%/year) and almost five times the growth of the European industrial production (1.5%/year).

Light technologies as a driver of growth

Photonics21 Vice President Giorgio Anania said: "The European photonics industry is thriving, and this study confirms that light technologies have a proven track record as a long-term driver of growth not only in Europe but also across the world.

“With a global growth rate of CAGR 7 %, photonics is growing faster than many other high-tech industries, for example, the IT industry (4.5%), Medtech (4.9%), and Microelectronics (4%).

Thierry Robin from Tematys said: “Our analysis shows that European photonics is currently seeing the transformation of its manufacturing processes with significant impact on jobs and skills."

“While it may not be immediately apparent, photonics is a key enabling technology present in every next-generation innovation, in almost every industry. Not only is photonics dramatically improving our next generation health diagnostic tools and manufacturing industries but also enabling green technologies that operate with non-invasive, clean, harmless particles of light.”

Europe in strong global position

From 2015 to 2019, Europe maintained a clear second position in the global photonics market against fierce international competition. Although Europe and North America had held a joint 16% global market share in 2015, the new research showed Europe had nudged slightly ahead to 16%, with North America on 15%. China continued to dominate with 29% of the global market share – Europe (16%), North America (15%), Japan (13%), (see report for further market segment breakdown).

Spending on R&D was also considerably higher in the European photonics industry: looking at a selection of large and medium-sized companies from several different countries that operate in all market segments, the average R&D intensity was 10.4% investment. This R&D intensity was more than double the 4% standard (from 1,000 EU and UK companies with the most extensive R&D). For EU photonics SMEs, the R&D intensity was even higher at around 15%.

Projecting market trends

Growing to a global market size of €654 (~$790) billion in 2019, the research shows photonics managed to grow at a CAGR of 7%. Following this continual CAGR at a conservative 6% projection forward, the Tematys study shows that the global photonics industry will reach €900 billion ($1 trillion) by 2025.

The expansion and continual growth in light science are partly due to its ability to serve many related and unrelated products like sensors, camera and imaging systems, communication, displays, smart lighting, photovoltaic systems and laser production, which is adding to its increased use as a technology supporting future societal challenges across the world, such as digitalisation of production and society, Health and well-being, Sustainable development and Environment, Photonics for Consumers IT, Medicine & Biology, Environment, Lighting & Energy Industry 4.0.

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