At the same time, digital transformation, cyber threats, and new technological paradigms, such as artificial intelligence (AI) and modern communication standards like 5G and FRMCS, are accelerating change in industrial processes and communications. Forecasts indicate that more than 60% of all organizations will use AI strategically by 2026, while the demand for secure, highly available networks continues to grow.
This evolution requires more than just technical excellence. Issues such as technology sovereignty, resilience, security, and data sovereignty are increasingly becoming central to business decisions. In this dynamic environment, the ability to design secure, robust, connected, and adaptable IT and OT infrastructures is becoming a key competitive advantage.
Cyber Resilience and Cybersecurity Act: Security Becomes a Strategic Imperative.
Cybersecurity is increasingly evolving from a siloed IT discipline to an integral part of industrial value creation. With regulations such as the Cyber Resilience Act (CRA), NIS-2, and RED, the EU is responding to a threat landscape that has intensified significantly in recent years. Attacks on industrial infrastructure, critical networks, and connected devices are not only increasing in number but also becoming more sophisticated due to automation and AI.
The economic impact is considerable: analysts now estimate that the annual economic damage caused by cyberattacks in Europe exceeds €200 billion. At the same time, regulatory requirements are driving demand for secure digital products designed with compliance and security in mind.
The new EU requirements provide a clear framework for the development, operation, and security of digital products throughout their entire lifecycle, from protecting data integrity and encrypted communication to continuous updates and threat monitoring. Kontron supports manufacturers with a range of CRA-ready components, such as KontronOS (a CRA-compliant, hardened operating system), KontronGrid (centralized compliance monitoring), KontronAIShield (AI-based threat detection), and suitable edge hardware platforms. These solutions meet the requirements of upcoming EU regulations while creating a robust foundation for connected systems, from embedded devices to edge platforms.
AI at the Edge and 5G: Intelligence Where Data Is Created.
Looking ahead to 2026, the role of AI and 5G will continue to shift away from purely cloud-based approaches toward intelligent and secure edge architectures. Data is generated in machines, vehicles, production facilities, and critical infrastructure. It must be processed where latency, availability, and security are critical. Private 5G networks are becoming key enablers for real-time industrial applications and high-availability communication.
AI capabilities are increasingly being integrated into embedded systems, edge platforms, and secure operating systems. Solutions such as AI-assisted anomaly detection, predictive maintenance, and autonomous decision support only deliver added value if they can operate stably, explainably, and with cyber resilience. Technologies that work in one area can increasingly be transferred to other sectors, accelerating innovation and efficiency gains.
One example—and a strategically important market for Kontron—is the rail sector. The Future Railway Mobile Communication System (FRMCS) is creating a new 5G-based communication infrastructure for safety-critical applications. It is a prime example of highly regulated environments, long lifecycles, and maximum security and availability requirements. Comprehensive solutions developed for the secure transition from GSM-R to FRMCS, such as MCx, private 5G core networks, and cloud-native management tools, can also be transferred to other sectors and provide providers like Kontron with an early competitive advantage.
Defense and Security Applications: Technology as a Protective Factor.
The geopolitical situation and the increasing interconnection of critical infrastructures are leading to increased investment in defense and security projects worldwide, and in Europe in particular. Countries are focusing on resilient, secure, and long-term connected systems that meet stringent requirements for reliability, real-time capacity, and availability. There is a demand for modular architectures, open standards, and robust embedded computing systems that combine high computing power with stability and cyber resilience. Hardware-level security, controlled supply chains, local manufacturing, and compliance with international regulations are gaining strategic importance.
Technologies proven in sectors such as manufacturing, rail, and energy are increasingly being used in security-critical environments. There is a demand for modular architectures, open standards, and robust embedded computing systems that combine high computing power, stability, and cyber resilience. These systems must operate reliably in extreme environments, such as high temperatures, extreme cold, vibration, and dust, and must work together stably in complex network structures. With many years of experience in the embedded systems sector, Kontron has global development centers, a closely interconnected engineering team, and local manufacturing in strategically important regions. Kontron offers ITAR compliance, ensuring that sensitive technologies are supplied only to authorized partners.
Bureaucracy in Transition: First Signs of Relief
Despite increasing regulatory and security demands, there is at least a glimmer of hope: even at the EU level, there is a growing awareness that excessive bureaucratic complexity can stifle innovation and efficiency. Initiatives to simplify reporting requirements, streamline digital compliance processes, and harmonize standards demonstrate that economic competitiveness and regulation need not be at odds. For businesses, the direction is clear: those that integrate regulation strategically at an early stage can gain efficiency, predictability, and competitive advantages.
The outlook for
2026 is not a year of moderation, but of deliberate decisions. Cybersecurity, AI, 5G, and secure embedded systems will continue to converge. Resilience will become the new currency: technologically, economically, and strategically. Companies investing today in secure, software-based, and connected solutions are laying the foundation for sustainable growth in an increasingly complex environment.
Interdisciplinary collaboration and the integration of security, real-time capabilities, and AI into industrial platforms will determine who continues to thrive. Kontron is also embracing its responsibility and aims to support customers in designing systems that are robust, flexible, and future-proof.
The author: Hannes Niederhauser, CEO of Kontron AG.
Hannes Niederhauser, a graduate in Electrical Engineering from the Graz University of Technology, has extensive experience managing microchip and embedded computing companies. Before joining S&T, the Austrian-born Niederhauser was the majority shareholder and CEO of the former Kontron AG from 1999 to 2007. During his tenure, Kontron became a leading global provider of embedded systems. He continues to drive Kontron's transformation from an IT services company to a leading IoT solutions provider.
