Digital healthcare sector

Where AI directly changes lives

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June 2026


Health is a person’s greatest asset. This becomes particularly clear when illness throws one’s life into disarray. Baden-Württemberg (BW) is renowned as a strong hub for innovation in the healthcare sector. Yet hardly any other wave of innovation has brought as much momentum to the sector as the rapid spread of artificial intelligence (AI). Whether in diagnostics, new treatment methods or hospital management – it is medium-sized companies in particular that are helping to drive the digital transformation into all areas of healthcare. Yet the biggest challenge remains data.

 

Fields of application - brief inventory

As in almost all sectors of the economy, AI is primarily used to increase efficiency in the healthcare industry. Increasing the quality of medical services also plays a central role. Its use is particularly important in diagnostics, where it analyses medical images such as X-rays, CT scans or MRI scans and supports doctors in the detection of diseases.


AI also plays an important role in personalised medicine. By analysing health and genome data, therapies can be tailored more individually to patients. In addition, AI accelerates the development of new drugs by identifying potential active ingredients and analysing their properties.


In hospitals and healthcare facilities, AI supports organisational tasks such as scheduling, documentation and resource management. This optimises workflows and reduces the workload on staff. Digital health assistants and chatbots are also being used to provide patients with information or help them make appointments.


AI is also being used in care and prevention. For example, it helps with monitoring vital data, recognising falls or analysing data from smartwatches and fitness trackers. It also supports authorities and research institutions in analysing health data and planning healthcare measures.


Overall, AI is used along the entire value chain of the healthcare industry - from research and diagnostics to care, administration and prevention. It offers great potential to make healthcare more efficient and personalised.

 

Key regions for the digital healthcare industry

Most companies in the healthcare industry in Baden-Württemberg are concentrated in a few strong innovation and economic regions. The areas of medical technology, biotechnology, the pharmaceutical industry and digital health applications are particularly important.


One central location is the Tuttlingen region in the Schwarzwald-Baar-Heuberg region. It is considered the "world centre of medical technology" and is home to over 400 companies, more than 90 percent of which are small and medium-sized enterprises (SMEs). The region is particularly specialised in surgical instruments, implants and minimally invasive medical technology.


Another important focal point is the Stuttgart-Tübingen-Reutlingen region. Over 200 companies from the fields of biotechnology, medical technology and the healthcare industry have settled there. The region benefits in particular from the co-operation between companies, universities and research institutes.


Heidelberg is also recognised worldwide as an important location for the healthcare industry. Companies from the fields of biotechnology, pharmaceutical research and personalised medicine are concentrated here. The close connection to Heidelberg University and research institutions makes the region particularly attractive for innovative healthcare companies.


Freiburg and Ulm also play an important role. Freiburg is an important healthcare and medical technology centre with around 35,000 employees in the healthcare industry and a close network of clinics, research and companies. Numerous biotechnology and pharmaceutical companies have settled in Ulm.


Overall, SMEs are therefore represented in all key areas of the innovation chain. Medical technology in particular is strongly characterised by SMEs. It is regarded as a sector of the future that will further strengthen BW's leading position in the healthcare industry.

 

New developments and future projects in BW

Based on the strong infrastructure in BW, further lighthouse projects are being initiated in a targeted manner to further strengthen the innovative power of the healthcare industry and accelerate the development and application of AI. Some exciting future projects are mentioned here:

 

  1. Photon Counting CT Consortium (PC3)
    The project "Photon Counting CT Consortium: Establishing the next digital generation of computed tomography in Baden-Württemberg (PC3)" is developing new digitalised imaging processes for computed tomography. The aim is to enable significantly more precise diagnostic and therapeutic decisions while reducing radiation exposure for patients. The project is an example of how modern imaging, digitalisation and AI can improve medical diagnostics.

  2. TEDIAS - Test and Development Centre for Digital Anamnesis Systems
    The TEDIAS project is developing digital solutions for automated patient admission. Among other things, a so-called anamnesis chair that can record medical information in a structured manner was presented. The project is an important building block for the digital hospital, as it makes clinical processes more efficient, relieves staff and supports the digital networking of healthcare data.

 

In addition to the individual projects, the strategic focus in BW continues to be on networking university hospitals, research institutions, start-ups and companies in the healthcare industry. The Mannheim Medical Technology Campus, in particular, aims to translate research findings into practical applications more quickly. However, while technical developments are enabling breakthroughs in leaps and bounds in many areas, data security is still a major challenge in many places.

Data protection and cybersecurity - a blessing and a curse for further development

Data protection, cyber security and regulatory requirements are among the biggest challenges for the development and introduction of AI innovations in the healthcare industry. As medical data is among the most sensitive personal data, it is subject to particularly strict legal requirements. This makes it difficult to utilise the large volumes of data required for the training and further development of AI systems.


Above all, regulatory requirements in medicine are a key challenge. AI applications in the healthcare sector must fulfil high requirements in terms of safety, transparency and traceability. In Europe, the EU Medical Device Regulation (MDR) and the EU AI Act apply, among others. The approval of AI-based medical devices is often complex and time-consuming, which poses financial and organisational challenges for small and medium-sized enterprises (SMEs) in particular.


Data protection is a general hurdle. The requirements of the General Data Protection Regulation (GDPR) limit the storage, processing and transfer of health data. For research and AI development, data often has to be anonymised or pseudonymised, which is technically complex and can impair the quality of the data sets. In addition, different data protection regulations and responsibilities complicate the exchange of data between hospitals, research institutions and companies.


Another problem is the limited availability of high-quality healthcare data. AI systems require large, structured data sets that are as representative as possible. In practice, however, healthcare data is often available in different formats and distributed across different institutions. A lack of standards and a lack of interoperability make it difficult to merge this data.


Cybersecurity is also a major challenge. Hospitals and healthcare facilities are increasingly the target of cyberattacks, as healthcare data is highly valuable. AI systems must therefore be particularly well protected against data leaks, manipulation and unauthorised access. This requires high levels of investment in IT security, secure data infrastructures and continuous security checks.


Overall, the issue of data security does lead to higher requirements in the development of AI solutions. At the same time, it is more important than ever in this area in order to ensure security, the protection of sensitive health data and trust in digital innovations in the long term. There are usually no simple "shortcuts" to pave the way for the technology. At the same time, it is becoming increasingly clear that there are major international differences in the handling of data and data security. This impairs the speed of innovation and the dissemination of existing solutions. The healthcare industry in particular is becoming a pioneer when it comes to finding solutions for this.