For anyone working in Europe’s medtech sector, the last year has been analogous to finding yourself on a roller coaster ride with a too-loose seatbelt. You may have enjoyed the ride, but there were a few times you were wondering if you were going to be thrown clear.

The year 2025 was volatile, marked by tighter regulation, strained supply chains, tariff uncertainty, and shifting reimbursement pressures.

But innovation surged, so companies head into the new year cautiously optimistic, ready to scale cutting-edge innovation while remaining vigilant about macro forces shaping everything from product design to global market access. The themes defining the landscape are clear: digitalization and AI, regulatory adaptation, geopolitical complexity, increased competitiveness, and a notable shift in global R&D investment patterns.

For Ireland, 2025 brought a record level of future RD&I investment commitments of €2.5 billion by IDA Ireland clients as companies invest in product development, and new and emerging technologies such as artificial intelligence (AI) and quantum computing.

Digitalization and AI Move to the Center of EU Medtech

AI has moved from an idea concept to being integral to Europe’s medtech ecosystem.

Companies are using machine learning to optimize manufacturing, strengthen device performance, support clinical-trial design, and accelerate product innovation. Digital workflows are now embedded across quality control, predictive maintenance, and post-market surveillance. Meanwhile, medtech employers are doubling down on continuous upskilling

Digitalization and AI seem to have taken over Europe’s medtech industry overnight—after decades of preparation. Ireland has transformed into Europe’s strongest talent pipeline for this shift. The country ranks among the EU’s leaders in digital skills, according to the European Commission’s Digital Economy and Society Index: investing in and supporting companies that need engineers, data scientists, and manufacturing specialists capable of working with advanced digital systems.

For global companies opening shop in Europe, having a country with a young, growing, and skilled workforce ready to incorporate digitalization and AI into your business model is a key competitive advantage.

Reforming and Simplifying Regulation

For instance, the EU Medical Device Regulation (MDR) and In Vitro Diagnostic Regulation (IVDR) continue to reshape compliance timelines, documentation requirements, and market-readiness strategies. Meanwhile, companies across Europe still report increased administrative load and extended pathways to approval. Time-to-market planning begins earlier than it used to, allowing for more internal coordination between regulatory, R&D, clinical, and manufacturing teams.

The policy environment is responding; recently, the EU commission published proposals to reform both MDR & IVDR, which aim to speed up market access, reduce costs, and maintain safety standards, making compliance more manageable for both MDR & IVDR. The European Life Sciences Strategy ,introduced in 2025, aims to strengthen Europe’s competitiveness by easing bottlenecks and improving predictability across approval pathways. In 2026, Ireland will publish its’ Life Sciences Strategy which will further strengthen an already outstanding ecosystem and integrate with Ireland’s national AI strategy to protect and benefit patients while progressing digitalization.

Global Trade Uncertainty Shapes Strategic Planning

Medtech executives now build geopolitical volatility into their annual operation plans. Tariffs, supply-chain constraints, and changing trade policies—lately, the only certainty is uncertainty.

But let’s back up a bit: In August 2025, the EU and United States signed the Framework Agreement on Reciprocal, Fair, and Balanced Trade, which eliminated tariffs on most U.S. industrial exports to the EU. In return, the United States agreed to apply either its standard Most-Favored-Nation rate or a flat 15 percent tariff on EU-originating goods. The agreement replaced earlier threats of steep, rapidly shifting tariffs that had loomed over the industry.

Alas, the deal didn’t guarantee relief for medical technologies. Devices, diagnostics, and component parts remain subject to the 15% ceiling unless a specific sector carve-out is negotiated. MedTech Europe and AdvaMed have called for dedicated exemptions or a “zero-for-zero” mechanism covering essential health technologies.

As a result, companies are continuously reassessing global supply chains and manufacturing footprints. These decisions may influence medtech trade flows over the next period, but the drive to get innovative products to market for patients and healthcare systems continues at pace.

Robotics, Data, Digital Surgery, and Automation Continue to Expand

Robotics continues to be integrated across European health systems. Minimally invasive robotic systems are popular, driven by improvements in cost efficiency, clinical reliability, and workflow standardization.

Also, digital surgery tools, including simulation models and digital twins, are improving surgical training, scenario analysis, and procedural planning through improved use of data. The European Health Data Space (EHDS) is a cornerstone of the European Health Union and the first common EU data space dedicated to a specific sector as part of the European strategy for data. Automation and digitalization are making a splash on the factory floor, where smart systems are reducing variability and enhancing productivity and performance. Digital Manufacturing Ireland is supporting leading medtech companies on this transformation.

Cybercriminals Are a Disease; Cybersecurity Is the Cure

Healthcare is a profitable industry; that’s why criminal mastermind cyberhackers tend to want to work here.

As connected devices, cloud-dependent platforms, and AI-driven tools proliferate, cybersecurity has become a core engineering requirement in medtech. Thinking about the risks can make any healthcare executive sick: in 2024, there were at least 289 cybersecurity incidents affecting European Union healthcare providers, more than any other essential sector, according to the European Policy Centre.

Unsurprisingly, regulators are requiring earlier and more rigorous risk-mitigation planning. Wisely, European medtech companies are integrating cybersecurity into the earliest phases of design and prototyping rather than treating it as an afterthought at the end of development.

R&D Investment in Europe

A quieter but highly consequential trend is emerging: global medtech companies are undertaking more R&D in European countries like Denmark, Germany, and Ireland.

Early-stage research, prototyping, product and process development, and digital health innovation are increasingly being conducted throughout Europe alongside established manufacturing operations. Ireland, for one, has evolved from a rich heritage of operational excellence in manufacturing to become a strategic center for next-generation medtech innovation and commercialization.

Conclusion

Nobody’s saying you’re going to always enjoy riding the medtech express right now. But all these new and evolving changes suggest that when it comes to the health of the European medtech industry, the prognosis looks very good.

John Nugent is head of Medical Technologies & Healthcare Services at IDA Ireland, where he supports global medtech and healthcare-services companies evaluating Ireland for R&D, manufacturing, and international scale-up, with a focus on Ireland’s clinical, regulatory, talent, and supply-chain advantages. He has spent more than 22 years with IDA Ireland, joining from Enterprise Ireland in 2002. His career spans roles in IDA’s Engineering and Clean Technologies divisions, a successful overseas assignment in IDA Ireland’s California Silicon Valley office and regional leadership as Regional Manager for Ireland’s North West and the expanded Border Region. Nugent joined IDA’s Medical Technologies Department in February 2021 and assumed his current role in October 2023. He holds an honors degree in Chemistry from Queen’s University Belfast and has completed postgraduate qualifications in environmental protection, business strategy, and management, including an MSc in Management from UCD Smurfit Business School.