A workshop, ‘Theory Meets Industry’, was held on 12–14 June 2007 in Vienna, Austria, attended by a well balanced number of academic and industrial scientists from America, Europe, and Japan. The focus was on advances in ab initio solid state calculations and their practical use in industry. The theoretical papers addressed three dominant themes, namely (i) more accurate total energies and electronic excitations, (ii) more complex systems, and (iii) more diverse and accurate materials properties. Hybrid functionals give some improvements in energies, but encounter difficulties for metallic systems. Quantum Monte Carlo methods are progressing, but no clear breakthrough is on the horizon. Progress in order- N methods is steady, as is the case for efficient methods for exploring complex energy hypersurfaces and large numbers of structural configurations. The industrial applications were dominated by materials issues in energy conversion systems, the quest for hydrogen storage materials, improvements of electronic and optical properties of microelectronic and display materials, and the simulation of reactions on heterogeneous catalysts. The workshop is a clear testimony that ab initio computations have become an industrial practice with increasingly recognized impact.