How digital are German companies actually? A study published in 2022 examines "blind spots" on the path to Industry 4.0. We summarize the results in an easy-to-understand way and show solutions for companies to drive digitalization forward.
Reality check: How far is your company on the path to Industry 4.0?
Reports on VR glasses, chatbots, digital training with gamification elements – when flipping through current manager magazines, you might get the impression that digitalization in the DACH region is booming. We ask ourselves: Has industry really arrived at 4.0 already, or are most companies still on the path to get there?
This is what Industry 4.0 means
"Industry 4.0 is the term for a future project for the comprehensive digitalization of industrial production in order to better equip it for the future. [...] Industrial production is to be linked 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 Science and Engineering published an expertise and study that gets to the bottom of this question: Why does digitalization fail at German companies? We summarize the 42-page study for you in simple terms. Then we will do the practical check together: How can you drive your company forward 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 lagging behind when it comes to Industry 4.0?
Why do some companies fail in digitalization towards Industry 4.0?
To what extent could companies also have strategic reasons against Industry 4.0?
How can especially SMEs accelerate digitalization?
To what extent does the COVID-19 pandemic affect the progress of Industry 4.0?
We summarize the answers to the respective questions for you in the next section.
At a glance: Framework conditions of the study
Publisher: Research Advisory Board of Platform Industrie 4.0 / acatech – National Academy of Science and Engineering
Date: March 2022
Format: Literature analysis + interviews with 18 associations and 33 companies
Methodological basis: Grounded Theory
Which sectors are particularly lagging behind when it comes to Industry 4.0?
The study identifies the craft and manufacturing sectors as being particularly "inhibited" in digital progress. It is not surprising that the automotive and electrical engineering industries tend to be pioneers in the direction of Industry 4.0.
Why do some companies fail in digitalization towards Industry 4.0?
The question "why" is not quickly answered. Here, the study distinguishes between two different points in time: First, why companies do not try to become more digital at all. And second, what obstacles occur along the way of digitalization.
1) At the beginning: Why companies do not even start with digitalization
Lack of an initial spark for digitalization
Uncertainty about the benefits of digitalization
Lack of skills: Strategic capabilities are insufficient
There is a middle management layer made up 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 conservative towards digitalization.
Source: Publication "Blind spots in the implementation of Industry 4.0"
2) Along the way: These are hurdles during the implementation of Industry 4.0
Staff bottlenecks or shortage of skilled workers
Lack of digital culture in the company
External framework conditions, especially due to a lack of funding
Data protection (especially for larger companies)
The main hurdles on the path to Industry 4.0 are shown again in the diagram below:
Another factor working against the progress of digitalization that should not be underestimated: An inadequate ICT infrastructure. No network = No online-based solutions!
To what extent could companies also have strategic reasons against Industry 4.0?
The authors of the study on blind spots in the implementation of Industry 4.0 emphasize: Sometimes companies consciously choose not to digitalize. This is mainly due to a lack of profitability: The benefit of digital innovations is not apparent.
SMEs mainly decide consciously against digital solutions for financial reasons. In addition, SMEs often focus on short-term successes and less on long-term (digital) strategies.
How can especially SMEs accelerate digitalization?
Specifically, the study highlights 6 solutions with which politicians, associations, and companies can drive digitalization forward towards Industry 4.0:
Establish a strong digitalization culture throughout the entire company – at all levels. Comprehensive communication is helpful for this.
Digital education must become an integral part for everyone.
Establish responsibility at the top level and define clear goals.
Introduce new methods for evaluating the utility of digital solutions.
Expand the state funding landscape for digital implementation solutions.
Better identify digital trends through a macroeconomic innovation environment.
To what extent does the pandemic affect the progress of Industry 4.0?
Good news: Although the COVID-19 crisis severely challenged many companies economically. In some cases, digitalization projects had to be stopped completely due to liquidity bottlenecks. However, according to the study, no long-term Industry 4.0 disadvantages due to the pandemic are to be expected for most companies.
On the contrary: Some interviewees in the study talk about an "increased sense of necessity for digital solutions."
Conclusion: This is why the implementation of Industry 4.0 fails
Whether external (funding, network expansion) or internal (skills and strategies): Digitalization projects must fall on fertile ground. The following quote can be found in the study, which 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"
Corporate culture is therefore an often underestimated factor towards Industry 4.0. Is digitalization seen as an evil dragon that will consume everything old and good? The first approach to a solution here is long-term digital education and building a good learning culture.
