Engineering’s Future is AI-Inspired, Human-Led

For many organizations, AI is now starting to move beyond early-stage experimentation and into the realm of quantifiable value creation.

Article Contributed By Megan Lampinen, automotive technology writer and future mobility specialist, for TE Connectivity

Artificial intelligence is reshaping the global innovation landscape, speeding up the pace of development while improving product quality and operational efficiency. For many organizations, AI is now starting to move beyond early-stage experimentation and into the realm of quantifiable value creation. “Where the focus was previously on AI’s potential to deliver, it’s now shifting to real-world operational improvements,” says Davy Brown, Vice President and Chief Technology Officer for TE Connectivity’s Transportation Solutions segment.

AI dominates the 2026 TE Industrial Technology Index, an annual exploration of how organizations are managing critical innovation. This year’s index, AI Comes of Age, reflects a global maturation and proliferation of the technology across industrial engineering companies. While the discussion has been all about a man-made computational simulation of intelligence, the fundamental opportunities and challenges lie in the human element.

An AI powerhouse emerges

The report’s findings are based on insights from 1,000 engineers and executives active in wireless technology and 5G; data, cloud computing, and AI; automotive and commercial transportation; commercial and home appliances; aerospace and defense; industrial machinery; medical devices and technology; energy solutions; and sensor applications. According to the most recent figures, 82% of these companies have now adopted AI to some degree, and 35% have done so extensively. That’s up from 69% the previous year (with 22% extensively). While the general trend is upwards, regional variances persist.

The study covers China, Germany, India, Japan, and the United States. Japan and China established themselves as early leaders: In 2025, 31% of Japanese and 28% of Chinese respondents claimed their companies had extensively adopted AI. For the U.S. and Germany, that figure was just 15%. However, a lot can happen in 12 months and there’s been some levelling out. The U.S. now leads the 2026 chart, with 41% of respondents claiming extensive AI adoption. “The U.S. has become an AI powerhouse,” notes Brown, highlighting widespread societal acceptance.

Germany is close behind at 37%. India shows a less dramatic but still notable increase in adoption from 25% to 37%, while Japan and China’s rates have remained relatively stagnant, inching up to 33% and 29%.

The measure of success

The success of AI deployments can be measured in many ways. Last year’s top KPIs included optimized product designs, increased automation of manual tasks, and improved data processing and analysis. This year, the most popular focus areas are cost savings, return on investment (ROI) and workforce efficiency improvements. The share of executives who rank financial goals as a top AI priority has increased year-on-year by 20 percentage points to 66%. It’s the first time in the four-year history of the Industrial Technology Index that companies have prioritized financial goals over product innovation.

“This points to the improvement in AI capability and the comfort that industries are now building around AI,” said Brown. “In the early days, it was very difficult to pin down the ROI, as AI’s utility was increasing so quickly. With more hands-on experience backed by use cases that are changing how AI is deployed across workflows, we are becoming more comfortable estimating its impact. The systems that will affect business in 2028 and beyond have not even been implemented yet, but we know that ROI will surely continue to grow.”

However, feedback shows there’s still considerable uncertainty at play. Just 19% of executives and 28% of engineers report full clarity on the ultimate ROI of their AI efforts, and both groups either over- or underestimate the clarity of their counterparts. 17% of executives think engineers have full clarity, while 31% of engineers think their leadership have full clarity.

Then there’s the disconnect between how engineers and executives measure the value that AI delivers. Engineers are more likely to look for ROI from longer-term strategic improvements, such as enhanced brand reputation and competitive advantage. Executives are generally more focused on an ROI through operational improvements, like efficiency gains. While that likely stems from a bottom-up vs top-town perspective variance and the very different day-to-day exposure to AI among both groups, greater alignment will be pivotal in ensuring successful AI strategies.

Reinventing the workplace

AI will inevitably reinvent the workplace, and employees across numerous industries have been voicing concerns about job displacement. This was previously a huge concern with industrial automation, and not without cause. A 2019 report from Oxford Economics estimates that every new industrial robot eliminates 1.6 manufacturing jobs. Already, the likes of IBM, Meta, and Microsoft are issuing hiring freezes and mass redundancies as investments shift towards AI.

However, the Industrial Technology Index responses indicate that job displacement worries are now dissipating. Two-thirds of engineers say that rather than eliminating jobs, their organization is creating new roles and career paths related to AI integration. “The initial wave of any new technology tends to create fear and uncertainty,” said Brown. “Historically, we have found that some roles change as certain common tasks are replaced. In fact, with every wave of advancement, employment grows based on a changing set of required activities.”

Brown believes that much of the initial concern with AI stemmed from a lack of understanding, but engineers have been working closely with the technology over the past year and are becoming more comfortable with it. There’s a growing trend to embrace AI as a virtual digital partner that can handle more repetitive or time-consuming activities, such as scanning documents or conducting competitive analysis. That leaves the engineer free to focus on the creative parts of the job. 72% of index respondents believe AI will enable engineers to take on higher-value work.

“We don’t expect that AI will ever displace certain things,” insists Brown. “Creativity, empathy, customer intimacy, and accountability—these are all areas where humans create incredible value and where AI can be a cognitive multiplier.” Over the coming years, businesses will need to clearly convey both where they plan to derive value with AI and how the engineer’s role will evolve as these deployments scale.

A cognitive multiplier

Just how far industry can take AI remains to be seen, but most players agree today’s deployments just scratch the surface. Two-thirds of engineers and 58% of executives believe AI has the potential to deliver benefits well beyond automation.

“Automation simply takes an activity and moves it to an automated workflow,” said Brown. “AI can multiply the innovation quotient of engineers. Working together, sharing different thoughts and perspectives, is one of the most powerful tools we have to amplify the innovative capability of a group. When we add AI agents to that process, we dramatically multiply the potential.”

The expectation is that teams will become more productive, time to market for new products will plummet, and innovation will emerge at ever faster rates. Some of that innovation will come from the removal of repetitive, low value-add tasks, but some will come from something very different. “AI allows an engineer to explore more options, investigate performance beyond typical boundaries, and to run advanced simulations covering thousands of use cases. On a fundamental level, it gives engineers a virtual innovation partner that allows them to explore more white space,” he adds.

Moving forward, the human element of an AI paradigm will demand greater attention. “Today we are putting considerable focus on the fundamental capabilities of AI,” says Brown. “The next step is to look at what people are capable of in an age of AI. In a world where everyone has access to the same AI tools, the differentiator will be how people use those systems, how they tap into the legacy and pedigree of an organization and bring that together with the cognitive multiplier we see with AI to create a brighter future.”

While this latest study serves as an engineering innovation barometer, it’s only one piece of a wider effort to better understand a rapidly changing landscape. Futureproofing is always risky and always exciting but rarely have the tools to hand been so powerful. Engineers and executives are now on the front line, making the sort of decisions and discoveries that will set the course for the future—one that is inspired by AI but very much human led.

Visit TE Connectivity to read the 2026 Industrial Technology Index report, AI Comes of Age.

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