Digitalization affects us all - at least that is one lesson we have learned from the COVID-19 pandemic. In the industrial sector, it is therefore more important than ever that investments in digital technology are essential in order to maintain Germany as an industrial location - this was also the consensus at this year's Digital Summit in early December 2020. Ulf Timmermann, Managing Director at Reichelt Elektronik, used a survey on planned investments for 2021 to show where German industrial companies are making progress in the digital transformation compared to other countries and where there is still a need for action.

German industrial companies defy corona pandemic

The coronavirus pandemic and the resulting economic consequences have put a number of German companies to the test, despite record levels of government support. In October 2020, Reichelt commissioned the survey institute OnePoll to conduct a survey on industrial companies' budget planning for 2021 in order to find out how strong industrial companies still are in the current situation.

The representative survey results show that the picture is more positive than expected: Companies are planning to invest an average of 6.6% of their current annual turnover this year. At the same time, 71% of respondents say that they are planning to invest more than in the previous year, defying poor forecasts.

Investments in digitalization are particularly important. Around two thirds of respondents cited this task as one of their top priorities (32% as priority 1, 36% as priority 2). For example, 37% of participants are planning new acquisitions in this area, while 52% would like to expand and improve existing solutions.

Pent-up demand in the Industrial Internet of Things

In addition to the positive outlook for planned investments and the focus on digital acquisitions by industrial companies in Germany, the survey also shows that the intensification of international competition could mean that Germany is losing touch when it comes to digitalization.

Although it is known that German industrial companies have recognized IIoT as an enabler of digital transformation, innovations still fall short in a country comparison. At 25%, Germany lags behind the average mark of 30% when it comes to planning new acquisitions in the IIoT sector compared to other countries. One reason for this could be the still prevalent concerns about data and network security.

Robotics and AI (artificial intelligence) strategy works

Germany has already achieved a high level in the field of robotics. Germany uses the most industrial robots within the EU, particularly in the automotive industry. This is also reflected in the survey, in which German IT representatives state that they want to invest less in robotics in 2021: 23% instead of an average of 31% want to invest in the topic at all. A result that can be attributed to the many investments that have already been made.

In the area of artificial intelligence, it is clear that IT managers in Germany have recognized the benefits of AI in a smart factory. A total of 69% state that they want to focus on this in 2021. Compared to the average figure of 74% for all respondents, Germany is on the right track here.

Germany can remain the number one industrial location

"Overall, Germany is well positioned as one of the world's leading innovation locations. However, global competitive pressure is increasing and there is still a lot of potential for German industry to keep up in this context," says Timmermann. "In order to actively support German industrial companies in this, it is the task of the German government to promote access to data and the expansion of modern networks based on 5G:"

At 36%, German industrial companies are in line with the national average of 37% when it comes to planning new acquisitions in the area of 5G expansions. So they are ready to invest in the future, now they just need to create the right framework conditions. The Digital Summit, which has been taking place since 2016, is an important signal from the German government that the expansion of digitalization in Germany is being taken seriously.