The latest SCI Verkehr study, covering seven world regions, shows that digital solutions are crucial. While the global rail systems technology sector is growing faster than the overall market at 4.6%, the share of digital components and processes is also increasing significantly in traditional product segments such as rail infrastructure and rolling stock.
Global context
However, two speeds of digitalisation can be observed: New systems in regions like the Middle East and Asia are setting new standards with impressive, highly digitalised rail operations. This makes rail systems more efficient, attractive, and competitive against other transport modes, both in urban areas and in freight handling. In contrast, digitising existing networks is much more challenging and time-consuming, as it must be implemented incrementally while the systems remain operational. Increases in transport demand and policy goals require digital upgrades and innovations in both networks and operations. Particularly in Europe's high-demand market, there is an urgent need for modernisation that cannot be solely funded by public means, opening up opportunities for alternative financing tools and new market players.
New transportation systems are at an advantage when it comes to digitalisation, setting new standards through ATO (Automatic Train Operation) and CBTC (Communications-Based Train Control) solutions, as well as AI-assisted systems, driving innovative momentum. In contrast, many established legacy networks face enormous modernisation needs and can only be upgraded with significant effort. Existing technologies can no longer be relied upon and are not sufficient to enable the urgently needed capacity increases or to improve reliability and safety in rail operations. Therefore, digitalising existing networks is much more complex, costly, and time-consuming compared to rolling out new systems, as these upgrades can only happen gradually and at a considerably slower pace.
Situation in Europe
In Europe, the deployment of ETCS for both tracks and vehicles plays a key role in further digitalising rail transport. Expectations are high, yet planning security is often lacking. In the coming years, a large number of older vehicles will need to be retrofitted with ETCS, with the rail industry's capacities limited. Implementation across Europe is highly uneven. Smaller countries like Switzerland, Belgium, and Denmark have made considerable progress in implementing ETCS, while Germany and France lag behind.
Asia and Africa
China, which has been the growth engine of the global rail market for decades, remains by far the largest national rail market with a market volume of just under EUR 40 billion. China continues to play a key role in digital solutions, but future growth in the next five years will only come from the after-sales market.This development is at least partially offset by strong growth dynamics in India, where rail system expansion is strongly supported by political initiatives. Leading the growth over the next five years is the Africa/Middle East region, with an annual rate of almost 8%. In the Middle East in particular, numerous new rail systems are currently being developed, incorporating high standards and the latest technologies that are driving global innovations in the industry. The European market is also expected to grow above average at 5.4% per year, driven by substantial investments in existing networks and the need for capacity expansion in urban and high-speed rail transport.
