After years of disruption, volatility has become the new baseline. The shocks of 2025, including tariff disputes, energy price swings, and slowing global demand, no longer feel exceptional. They’re simply how business gets done. We’ve gotten used to chaos.
Across the US and Europe, the industrial economy is recalibrating. In the US, firms are weighing the real impact of large-scale government investments and tariff policies, asking whether these interventions will accelerate reshoring or simply inflate short-term demand. In Europe, optimism around the €500 billion stimulus remains tempered by questions of execution: will those funds fuel infrastructure and innovation, or dissipate in bureaucratic transfers?
In this environment, growth is harder, and fundamentals matter more than ever. Companies are rediscovering the basics: understanding their customers, refining their ideal customer profiles, and using modern commercial techniques to extract more value from existing relationships.
The story of 2026 isn’t about waiting for stability. It’s about learning to thrive without it. Here are the coming year’s three trends for growing in a low-growth world.
Beyond the Big Bang: Industrials are winning with everyday AI
Unlike in tech or finance, where early adoption often meant sweeping change, the industrial AI story is one of steady, incremental transformation. The first wave of use cases focused inward: improving analytics, automating data transfer, and optimizing segmentation or governance. For most companies, those foundational applications are now table stakes. The next wave centers on customer engagement and commercial enablement.
Industrial companies are borrowing proven playbooks from software and services, applying SaaS-style growth levers like cross-sell, upsell, and retention analytics to field service, manufacturing, and distribution contexts. These kinds of small, high-impact use cases are where AI is proving its worth. Instead of chasing a “big bang” transformation, industrials are learning that success lies in digitizing analog pain points and layering AI where it adds measurable value.
In 2026, AI’s true role is as an enabler, helping traditional companies operate more like digital ones. That includes creating new roles in enablement and growth operations, bridging the gap between legacy systems and data-driven decision-making. For the mid-market, especially Europe’s hidden champions, this approach is accessible, low-risk, and transformative. It’s about turning thousands of small, smart steps into sustained competitive advantage.
Private Equity’s industrial reset: From financial engineering to operational excellence
For much of the past decade, private equity has been the heartbeat of global capital flows, fueling industrial transformation, consolidation, and growth. Yet in recent years, headlines have told a different story: trillions in “dry powder,” record fundraising, and yet… stalled deal flow. As 2026 approaches, the question looms large: Is this the year private equity gets moving again?
The answer isn’t binary. Nor is it an all-win or all-lose scenario. After several years of muted activity and extended holding periods, pressure is mounting to unlock capital, repay investors, and reignite deal cycles. In the US, the market may have reached “peak PE,” with potential consolidation ahead. In Europe, stabilizing interest rates and easing inflation could create a limited, but valuable, window to act.
But the winners in this new cycle won’t be those relying solely on leverage or buy-and-build strategies. They’ll be the funds that drive real operational performance, boosting EBITDA through systems improvement, digitalization, and commercial excellence. Our latest Private Equity Value Creation Study 2025 shows a clear shift: “systems and infrastructure” has surged from a bottom-tier lever to a top-three investment priority for 2026.
This signals a new era for industrial PE: one focused on foundations, not just financials. As AI and automation reshape industries, funds are realizing that success requires more than capital. It demands building the technological and operational backbone that can sustain value creation. Agility will outperform size: The funds that move first and learn fastest, especially in adopting AI, will define the next wave of private equity success.
Green growth, post-hype: Sustainability as strategy, not slogan
From decarbonization targets to ESG ratings, sustainability once carried a sense of urgency, and even moral prestige. However, by 2025, economic volatility, energy shocks, and political polarization left many asking: Is green growth dead?
At Simon-Kucher we believe it is not dead, but it is maturing. Industrials has entered the post-hype era of sustainability, where progress is less about messaging and more about measurable impact. The conversation has shifted from why to how. Industrial companies, long criticized for high carbon intensity, are now embedding sustainability in procurement, supply chains, compliance, and process optimization. Europe remains a front-runner, but implementation everywhere has become more rational and return driven. Sustainability efforts must pay off, and increasingly, they do.
Cost savings from energy efficiency, waste reduction, and circular material flows now align naturally with ESG outcomes. In some sectors, such as packaging, there’s still a visible “green premium.” Consumers will favor sustainable options when performance and price are equal. But for most, sustainability has become a hygiene factor, a baseline expectation rather than a differentiator.
This normalization doesn’t make ESG less relevant, rather more durable. The hype may have faded, but the fundamentals endure. Companies that maintain focus will build long-term resilience and brand trust, while those who retreat risk being caught unprepared as regulation tightens and expectations rise.
Key takeaways: Growth redefined
In 2026, “growth” in the industrial sector no longer means simply getting bigger. After years of volatility, disruption, and reactive decision-making, growth is being redefined, not as blunt expansion, but as optimization, precision, and endurance. Success now depends on getting smarter, not just larger, with the winners finding and scaling small pockets of opportunity with discipline and speed.
Industrials growth will be uneven, but it will be there for the companies that know where to look. Those that can pair agility with operational excellence, use data intelligently, and apply new technologies with purpose will continue to grow, even in a low-growth world. Smaller, more agile economies may outpace the larger ones until the latter “do their homework.”
2025 was about reacting to shocks. 2026 will reward those who can sustain through them. Growth now means stamina: the ability to operate tightly, stay adaptable, and keep moving forward even when volatility feels endless.
Our industrials experts help you navigate volatility, optimize performance, and unlock smarter, more sustainable growth. Learn more about services here.
