Industry 4.0 – Did Germany oversleep the revolution?

Germany is falling behind in the implementation of Industry 4.0! This is the conclusion of a study published by the European Patent Office at the beginning of December 2020. Germany is in danger of being left behind in another area that is essential for its social and economic future. The lag is surprising. After all, the term Industry 4.0 is a German invention. You would therefore think that domestic companies would be taking on a leading role. And they did, but more on that later.

The first use of the term Industry 4.0 was documented at the Hannover Messe 2011. Around nine years ago, Henning Kagermann (physicist and manager), Wolf-Dieter Lukas (physicist and State Secretary at the Federal Ministry of Research and Education) and Wolfgang Wahlster (computer scientist and university lecturer) wrote an article in which they recognized the upheavals in the economy caused by technical developments in the areas of the Internet of Things, big data, artificial intelligence and real-time networking of products, processes and infrastructures as the fourth industrial revolution and gave it the name Industry 4.0. Anyone who follows this blog regularly will raise their eyebrows at the keyword “real-time networking”. This is because fast and broad data highways are essential for this. However, Germany is not doing particularly well in this respect, to put it mildly. One factor for the slow further development of Industry 4.0 can certainly be found here.

It may still be possible to make up for the weak point of data transmission. After all, the first 5G projects are also underway in this country. At the end of November, news agencies reported that network expansion is progressing faster than planned. Today, two thirds of the population can already use fifth-generation mobile communications on Deutsche Telekom’s network. After all.

In my opinion, another point is worrying: Germany is falling further and further behind in the development of new products in the field of Industry 4.0. Of the 40,000 patents registered in this area in 2018, just 2051 came from Germany. Worldwide, this is only good enough for fifth place behind the USA with 11,927 applications, Japan (6679), China (6307) and Korea (4370). Germany is also well behind the USA, South Korea and China in terms of average growth in patent applications at 14.9% per year. The fact that Germany still occupies the top position in Europe is little consolation. It must be a wake-up call that Amazon, a company that started out as an online bookseller, is now also a leading provider of industrial cloud solutions. At the beginning of December, Amazon Web Services presented a whole range of new machine learning offerings for industry.

Obviously, our country of inventors has missed out on a development after initially being at the forefront of developments. Two years ago, the VDMA stated that although the industry was “actively discussing buzzwords such as the Internet of Things, Industry 4.0 and digitalization”, many companies had not yet recognized the relevance of the topic. For a long time, SMEs in particular had only seen IT as a means of automating themselves and perfecting existing skills. This was at least enough for them to take the lead for a while. However, the key point of Industry 4.0 is the question of what a company can now do thanks to powerful IT that it was previously unable to do. This step has so far been taken too rarely. The classic entrepreneurial spirit is needed more than ever.

However, I now see some signs that the upheavals of the coronavirus year have reawakened this spirit. The many small and medium-sized specialists and hidden champions in particular are gradually recognizing the opportunities that Industry 4.0 offers them. They have important advantages: Most of them are still flying below the radar screens of Silicon Valley. There, for example, hardly anyone is interested in the many aspects of thermal management in vehicle drives, to name just one example. But if you have grown up as a supplier in the middle of the automotive industry, such topics are in your blood. And it is therefore easier for them to assert themselves on the market with a digital platform for the procurement of such components – or even gain new shares. The art of engineering and digitalization have begun to grow together. In my opinion, the chances that the country where the term Industry 4.0 was born will once again become a pioneer of the revolution are therefore quite good. At least better than the above-mentioned study suggests.