It's not just positive news in times of coronavirus: a recent Bitkom study states that "Germany is way ahead internationally" when it comes to Industry 4.0. The representative survey, in which a good 550 industrial companies in Germany with 100 employees or more took part in the spring, actually shows a significant boost in digitalization compared to previous years. According to the survey, 59% of participants now use special Industry 4.0 applications - an increase of 10% compared to 2018. 22% plan to use them and a further 17% can at least imagine doing so in the future.

Networking and digitalization are therefore making significant progress in German industry. For Bitkom President Achim Berg, the degree of digitalization is even a measure of crisis resilience: "The more digital industrial companies are, the faster they will recover from the consequences of the shutdown." This corresponds to the companies' self-assessment: 94% see Industry 4.0 as a prerequisite for maintaining the competitiveness of German industry. And 55% emphasize that Industry 4.0 generally gives their own business a new boost.

However, the direction of the implementation of Industry 4.0 is contradictory, depending on the study consulted.

Evolution instead of revolution? Between value creation and disruption

According to the Deloitte study on Industry 4.0 from January 2020, in which over 2,000 C-level executives worldwide were surveyed on the topic of Industry 4.0, including 125 CXOs from German companies, the focus to date has rarely been on developing new business areas and disruptive business models. The main focus is on improving processes, increasing productivity and driving innovation. Industry 4.0 therefore primarily serves as a means of safeguarding existing business and leveraging efficiency potential. It is therefore primarily about value creation and cost reduction, about evolution rather than revolution. According to the Deloitte study, these aspects have the highest priority for German C-level executives in particular (86%). Only 23% of them are aiming to become disruptors in their industry with their companies and develop completely new business models.

In contrast, the Bitkom study shows much more positive developments. Almost three quarters of the German industrial companies surveyed (73%; 2018: 59%) state that it is not just individual procedures or processes that are being changed, but entire business models. Half (51%) state that they are developing new products and services or are planning to do so (2018: 39%).

German companies see themselves well positioned

This leads to a robust self-assessment among the companies surveyed by Bitkom: 22% currently see Germany as the world leader. Only a few more, namely 27%, put the USA in first place, 19% see Japan in the lead, 14% China and 9% South Korea. The Deloitte study also confirms that Germany is at the forefront of Industry 4.0 worldwide. While IoT is important for 98% of German respondents, only 72% find the topic relevant globally.

The core topics of AI, big data, cloud and 5G

Artificial intelligence in one in seven companies

© Bitkom

For companies on the path to digitalization, the question arises as to which topics should take center stage. According to the Deloitte survey, the main topics are the cloud (Germany 86% vs. global 64%), artificial intelligence (Germany 79% vs. global 68%) and big data analytics (Germany 77% vs. global 54%).

The Bitkom study specifies that 14% already use artificial intelligence in the context of Industry 4.0, almost half of which in the area of predictive maintenance (43%). According to Bitkom, there is also the new 5G mobile communications standard in Germany: 73% of respondents consider its availability to be important for their own business.

Data integration critical to competition

Digitalization creates new business models

© Bitkom

For all these technologies, networking at the operational level must function quickly and smoothly so that the desired effects of Industry 4.0 can be realized as quickly as possible. In this context, both studies refer to the serious shortage of skilled workers, which could slow down rapid further development. However, they do not focus on central technological problems, in particular data integration, which forms the basis of all networking. Together with the shortage of skilled workers, this creates a dangerous bottleneck for further digitalization. This is because the scarcity of available employee resources causes significant delays in digitalization projects, for example when data from machines and systems has to be collected and evaluated and these results then have to be made available to other processes, from production control to purchasing. With increasing networking, data integration management and the speed with which adjustments can be made are becoming critical competitive factors.

This is where the software industry is in particular demand. The development of solutions that are easy to use, can be established quickly and can be used to automatically integrate data in a wide variety of formats between a wide variety of systems by means of rapid configuration instead of lengthy programming relieves the burden on IT, reduces process costs and increases the speed of Industry 4.0 projects.

Roll up your sleeves

Even after the corona-related setback, German industry is on a solid footing in international comparison and is preparing for the future: "Digitalization is generating more competition, and this competition is leading to more innovation - a stroke of luck for Germany. With its global players and hidden champions, German industry is at the forefront and has what it takes to remain a global leader in the future. Especially during the corona crisis, it is important to roll up our sleeves and lead the digitalization of industry worldwide," says Bitkom President Achim Berg.

The author

Steffen Brehme, Managing Director and Head of Software Development at Lobster.

© Lobster

Steffen Brehme is Managing Director and Head of Software Development at Lobster. He studied computer science in Tralee, Ireland. In the early 90s he was co-founder of SimpleWork, which was sold in 1996. At the beginning of 1997 he became interim IT manager at Maxdata, at the end of 1997 he was co-founder of Beans AG and in 2002 co-founder of Lobster GmbH.