German politicians and industry leaders repeatedly emphasize in a mantra-like manner that we really slept through the first half of digitalization in Europe and especially in Germany. The reason for this is certainly that German industry, as the 'supplier to the world', but also due to the booming automotive industry, has hardly seen any reason to change its successful business model. Or to put it bluntly: as long as the fax machine keeps spitting out new orders, there's no need to worry about new business models - especially if they are disruptive and could potentially cause you to lose your job.

Over ten years ago, the term 'Industry 4.0' was coined at the Hannover Messe trade fair and has become a global synonym for data-supported industrial value creation. Europe and Germany want to successfully tackle the second half of digitalization and create a strong industrial foundation and basis for our future prosperity. The latest Industry 4.0 Barometer from management consultancy MHP and Ludwig-Maximilians-Universität (LMU) in Munich concludes that the DACH region is lagging far behind China in the use of digital technologies. In their analysis, the authors of the study point out that Chinese companies have a 20% higher use of digital twins and twice as high automation and remote control rates for systems. The automotive industry, which is under high international competitive pressure, is a welcome exception: Almost two thirds of the automotive companies surveyed stated that they had implemented communication architectures such as 5G - 13% more than the reference industries.

Importance of open communication architectures

Open communication standards fuel innovation and create new value-added services with high value creation potential. This was the case in the 1980s with the introduction of digital telephony via ISDN and the GSM standard. Europe was a leading telecommunications supplier in both technologies. However, hardware increasingly became a by-product with low margins: although Ericsson and Nokia are still leaders in the field of mobile network infrastructure, as the expansion of 5G networks shows, Europe only plays a subordinate role in the field of end devices or digital value-added services. The Internet with its TCP/IP protocol is considered a prime example of open communication architectures: thanks to the 'World Wide Web' protocol, the foundation stone of which was laid by Tim Berners-Lee at CERN in Geneva, a completely new digital economy was able to emerge on this standardized data pipeline, including the currently much-discussed metaverse.

The same dynamic is now playing out in the industrial communication landscape. The Industry 4.0 communication standards TSN and OPC UA as well as the new 5G mobile communications standard are creating an exciting pairing: while TSN / OPC UA stands for real-time wired network communication, 5G enables real-time wireless network communication.

Germany has an important locational advantage: while it still lags far behind other countries in the expansion of commercial 5G networks for end customers, Germany is one of the world leaders in the allocation of licenses for industrial 5G radio frequencies. According to the latest figures from the responsible Federal Network Agency (BNetA), 170 applications for the allocation of local 5G networks, so-called campus networks, have now been granted. These include names such as Accenture, Airbus, BMW, Porsche, Kuka, Mercedes Benz, Siemens and VW.

TSN / OPC UA and 5G - the perfect pairing

In addition to the quick and cost-effective granting of 5G licenses to industrial partners by the responsible Federal Network Agency, it is also an advantage that two important standardization bodies, the OPC Foundation and the 5G ACIA Association, are strongly anchored in Germany. Stefan Hoppe, the Managing Director of the OPC Foundation, comes from Germany, while 5G ACIA was founded by the ZVEI and has developed into the leading international association for industrial 5G communication.

Both associations recognized early on that strategic cooperation is of great importance for the breakthrough in the field of standardized and integrated industrial data communication. Last year, the OPC Foundation and the 5G-ACIA consequently signed a memorandum of understanding "to identify synergies on how OPC UA can best run over 5G for the benefit of industrial applications". Andreas Müller, Chairman of 5G-ACIA, summarized the cooperation as follows: "The integration of OPC UA and 5G brings together two important building blocks and thus forms the basis for a highly flexible and powerful connectivity fabric for intelligent manufacturing".

Industrial value-added services through 5G

3GPP version 16 introduces Ultra Reliable Low Latency Communication (URLLC). This increases the reliability of end-to-end connections to 99.999% compared to Release 15. In addition, positioning accuracy has been significantly improved, which is particularly interesting for parcel delivery. With these properties, 5G URLLC can score particularly well in industrial applications. ABI Research also sees the enormous potential: the market researchers assume that the market for 5G URLLC will amount to 18.9 billion US dollars by 2026. The main areas of application will be mobility and transportation, manufacturing and healthcare.

Specific fields of application with a major impact are likely to be driverless cars, intelligent goods transportation, remote-controlled vehicles in production and, above all, next-generation factories. Using TSN / OPC UA and 5G, an omnipresent network can be created in the factory that connects machines, cloud and analysis services and processes. In the industrial environment, areas of application with a time-critical process background such as real-time robot control, virtual reality applications, motion control machines and factory automation are particularly worth mentioning here.

Industrial data economy and EU Data Act

Thomas Rappold: "Germany is in a very good starting position for the industrial data economy. Rapid and consistent adaptation of modern communication standards such as OPC UA, TSN and 5G is crucial for this."

© Thomas Rappold

At the end of February 2022, the EU Commission presented the "EU Data Act". The Act is intended to regulate legal, economic and technical issues relating to access to data generated by the use of networked devices. According to EU Commissioner Breton, 33 zettabytes of data were generated in 2018 - this figure is set to rise to 175 zettabytes by 2025 - but 80% of the data generated in the IoT/Industry 4.0 sector is currently not being used or systematically analyzed. According to Breton, the aim of the Data Act is to make it easier for industry to use this data generated by machines so that they can better exploit the "growth and innovation potential" and compete with the large American and Chinese tech companies. In Germany, the automotive and chip industries in particular have quickly taken up the topic of 5G for factory automation in order to generate added value and new business models from the data.