How digital are German companies really? A study released in 2022 examines "blind spots" on the way to Industry 4.0. We summarize the results in an easy-to-understand manner and show solutions for companies to drive digitalization forward.
Reality check: How far along is your company on the road to Industry 4.0?
Reports on VR glasses, chatbots, and digital training with gamification elements – when flipping through current management magazines, one might get the impression that digitalization is booming in the DACH region. We ask ourselves: Has the industry really already reached 4.0 or are most companies still on their way there?
This means Industry 4.0
"Industry 4.0 is the term for a future project aimed at the comprehensive digitalization of industrial production to better prepare it for the future. […] Industrial production is to be integrated with modern information and communication technology. The technical basis for this is intelligent and digitally interconnected systems."
Source: Wikipedia on Industry 4.0
In March 2022, the German Academy of Engineering Sciences published an expertise with a study that investigates this question: What hinders digitalization in German companies? We summarize the 42-page study for you in understandable terms. Then we will jointly conduct the practical check: How can you drive 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 lagging in terms of Industry 4.0?
Why do some companies fail in digitalization towards Industry 4.0?
To what extent might companies also 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 for you.
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 lagging in terms of Industry 4.0?
The study names the crafts and manufacturing industries as particularly "hampered" in digital progress. Not surprisingly, the automotive industry and electrical engineering tend to be leaders in the move towards Industry 4.0.
Why do some companies fail in 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 way to digitalization.
1) At the beginning: Why companies do not start with digitalization
Lack of starting impulse for digitalization
Uncertainty about the benefits of digitalization
Lack of competencies: Strategic abilities are insufficient
There is a middle management layer, which consists 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"
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2) In the process: These are hurdles during the implementation of Industry 4.0
Staff shortages or lack of skilled workers
Lack of digital culture in the company
External framework conditions, especially due to the lack of funding
Data protection (especially in larger companies)
The main hurdles on the way to Industry 4.0 are summarized again here in the diagram:
Another factor hindering the progress of digitalization that 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. Particularly due to a lack of profitability: The benefits of digital innovations are not evident.
SMEs often consciously decide against digital solutions primarily for financial reasons. Moreover, SMEs often focus on short-term successes rather than long-term (digital) strategies.
How can particularly SMEs accelerate digitalization?
Specifically, the study outlines 6 solutions with 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 in this regard.
Digital education must become an integral part for all.
Accountability must be established at the highest level and clear goals set.
Introduce new methods for evaluating the benefits of digital solutions.
Expand the government funding landscape for digital implementation solutions.
Better recognize digital trends through a comprehensive innovation environment.
To what extent does the pandemic affect the progress of Industry 4.0?
Good news: Although the Corona crisis has financially severely challenged many companies, some projects had to be completely halted due to liquidity shortages. However, according to the study, no long-term disadvantages for Industry 4.0 are expected for most companies due to the pandemic.
On the contrary: Some interviewees in the study report a “heightened sense of necessity for digital solutions.”
Conclusion: What hinders the implementation of Industry 4.0
Whether externally (funding, network expansion) or internally (competencies and strategies): Digitalization projects must thrive in fertile ground. The study contains the following quote, 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"
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 a long-term digital education and the establishment of a good learning culture.
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Learning culture in companies
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