How digital are German companies actually? A study published in 2022 examines "blind spots" on the way to Industry 4.0. We summarize the results in an easily understandable way and show solutions for companies to advance digitalization.
Reality Check: How far is your company on the way to Industry 4.0?
Reports about VR glasses, chatbots, digital training with gamification elements – when browsing current management magazines, one might get the impression that digitalization is booming in the DACH region. We ask ourselves: Is the industry really already at 4.0, or are most companies still on their way there?
This means Industry 4.0
"Industry 4.0 is the designation for a future project aimed at comprehensive digitalization of industrial production to better equip it for the future. […] The industrial production is to be interlinked with modern information and communication technology. The technical basis for this is intelligent and digitally networked systems."
Source: Wikipedia on Industry 4.0
In March 2022, the German Academy of Engineering Sciences published an expertise with a study that addresses this question: What hinders digitalization in German companies? We summarize the 42-page study for you in understandable terms. Afterwards, we will jointly conduct a practical check: How can you advance your company towards Industry 4.0?
Study 2022: Blind Spots in the Implementation of Industry 4.0
The authors of the expertise answer the following 5 questions with the study:
Which sectors are particularly declining regarding Industry 4.0?
Why do some companies fail in the digitalization towards Industry 4.0?
To what extent might companies have strategic reasons against Industry 4.0?
How can particularly SMEs accelerate digitalization?
To what extent does the corona pandemic affect the progress of Industry 4.0?
We summarize the answers to the respective questions in the next paragraph.
At a glance: Framework conditions of the study
Publisher: Research Advisory Board of the Industry 4.0 Platform / acatech – German Academy of Engineering Sciences
Date: March 2022
Form: Literature analysis + interviews with 18 associations and 33 companies
Methodological Basis: Grounded Theory
Which sectors are particularly declining regarding Industry 4.0?
The study identifies the craft and manufacturing sectors as particularly "hampered" in digital progress. Unsurprisingly, the automotive industry and electrical engineering tend to be pioneers towards Industry 4.0.
Why do some companies fail in the digitalization towards Industry 4.0?
The question of "why" is not quickly answered. Here the study distinguishes between two different points in time: First, why companies do not even attempt to become more digital. And second, what obstacles occur on the path to digitalization.
1) At the beginning: Why companies do not even start with digitalization
Lack of initial impulse for digitalization
Uncertainty about the benefits of digitalization
Lack of competencies: Strategic capabilities are insufficient
There is a middle management consisting of people with twenty to thirty years of experience in the company. […] However, they did not grow up as a digital generation and are therefore conservatively positioned towards digitalization.
Source: Publication "Blind Spots in the Implementation of Industry 4.0"
2) In the course: These are hurdles during the implementation of Industry 4.0
Staff shortages or a lack of skilled workers
Lack of a digital culture in the company
External framework conditions, especially due to a lack of funding
Data protection (especially in larger companies)
The main hurdles on the way to Industry 4.0 are summarized in a diagram below:
Another factor hindering the progress of digitalization, which should not be underestimated: Insufficient ICT infrastructure. No network = No online-based solutions!
To what extent might companies also have strategic reasons against Industry 4.0?
The authors of the study on the blind spots in the implementation of Industry 4.0 emphasize: Sometimes companies consciously decide against digitalization. Especially due to a lack of profitability: The benefits of digital innovations are not evident.
SMEs often consciously decide against digital solutions for financial reasons. Moreover, SMEs often focus on short-term success rather than long-term (digital) strategies.
How can particularly SMEs accelerate digitalization?
The study specifically identifies 6 solutions by which politics, associations, and companies can drive digitalization towards Industry 4.0:
Establish a pronounced digitalization culture throughout the company – at all levels. Comprehensive communication is helpful.
Digital education must become an integral part for all.
Accountability must be established at the highest level with clear goals defined.
Introduce new methods for evaluating the benefits of digital solutions.
Expand the government funding landscape for digital implementation solutions.
Better recognize digital trends through an overall economic innovation environment.
To what extent does the pandemic affect the progress of Industry 4.0?
Good news: Although the corona crisis has economically challenged many companies, there were points where digitalization projects had to be completely stopped due to liquidity shortages. However, according to the study, no long-term disadvantages of Industry 4.0 due to the pandemic are expected for most companies.
On the contrary: Some interviewed participants in the study talk about an "increased sense of necessity for digital solutions."
Conclusion: This is what hinders the implementation of Industry 4.0
Whether externally (funding, network expansion) or internally (competencies and strategies): Digitalization projects must be grounded. The study contains the following quote that is both bitter and true:
Developing new products with old structures will not work.
Source: Publication "Blind Spots in the Implementation of Industry 4.0"
The corporate culture is therefore an often underestimated factor in the direction of Industry 4.0. Is digitalization seen as an evil dragon that will devour everything old and good? The first solution approach here is long-term digital education and building a good learning culture.
