Germany: Industrie 4.0 - Digital Transformation Monitor January 2017 - Europa EU
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Digital Transformation Monitor
Germany:
Industrie 4.0
January 2017
Internal Market,
Industry,
Entrepreneurship
and SMEs
Germany:
Industrie 4.0
© Unsplash/Pexels.com
Fact box for Germany’s Industrie 4.0 policy initiative
Publicly-backed and steered initiative that is implemented through stakeholder
Policy Lever(s)
dialogue
Mixing public funding with private financial and in-kind contributions; offering between
Funding Model
a two to one or five to one ratio between private to public investment
Target audience(s) Manufacturers/producers, SMEs and policy-makers
Digital innovation and ICT market; transformation of business models and
Impact & Focus Areas
product/service delivery
Idea development by research actors, reform experience in production and pro-active
Key drivers
unions
Key barriers Competition among leading ICT players and shop-floor-level involvement
Comprehensive research agenda and I40 platform as a network foundation for digital
Implementation strategy
transformation
Reducing industry segregation, transforming research agenda into practice, developing
Results achieved
reference architecture and launch of platform with 150 members
EUR 200 million from BMBF and BMWI that is complemented by financial and in-kind
Budget
contributions from industry
Rapid transformation from research agenda into mainstream practice and platform
Uniqueness factor
constitute the largest and most diverse I40 network globally
A strategic initiative for consolidating technological leadership in mechanical
Value-added for policy-makers
engineering and for helping policy-makers to push forward I40 at all levels
Provide a consistent and reliable framework for developing Germany’s competitive
Expected Impact
position in manufacturing through recommendations and actions
Source: Digital Transformation Monitor
2
Germany: Industrie 4.0
A strategic initiative for Forward-looking, some key I40 and the increasing digitalisation
challenges concern reaching out to through smart factories and IoTS is
pushing forward digital SMEs and adapting management and placed high on the Government’s
transformation shop-floor organisation at firm-level Digital Agenda, with the digital
in support of the actual I40 economy and digital workplaces
“Industrie 4.0” (Industry 4.0 (I40)) is implementation. among the agenda’s focus areas.
a national strategic initiative from
the German government through the Digitalisation presents Objectives in support of
Ministry of Education and Research key opportunities CPS and IoTS
(BMBF) and the Ministry for
Economic Affairs and Energy Approx. 15 million jobs in Germany The I40 strategy aims to ensure an
(BMWI). It aims to drive digital are directly or indirectly linked to industry fit for future manufacturing
manufacturing forward by the production of goods, meaning in Germany. It supports the
increasing digitisation and the that new digital evolutions in integration of cyber physical systems
interconnection of products, value industry offer key opportunities for (CPS) and Internet of Things and
chains and business models. It also companies.¹ As a leading supplier of Services (IoTS) with an eye to
aims to support research, the industrial equipment at the global- enhance productivity, efficiency and
networking of industry partners and level, the digital restructuring of flexibility of production processes
standardisation. industry offers plenty of and thus economic growth.
opportunities to boost international
I40 is pursued over a 10-15-year The objective of the I40 platform is
competitiveness of German
period and is based on the German primarily to secure and develop
production and better conditions for
government’s High Tech 2020 Germany’s leading position in
job creation.
Strategy. The initiative was launched industrial manufacturing and to
in 2011 by the Communication The government launched its High- promote digital structural change
Promoters Group of the Industry- Tech Strategy in 2006 to coordinate and a framework to achieve it. It
Science Research Alliance (FU) that research and innovation actions further aims to develop a consistent
was convened and organised by aiming to preserve competitiveness overall understanding of Industry
BMBF and adopted through the and to drive forward technological 4.0 through dialogue with
High-Tech Strategy 2020 Action innovation. In July 2010, the High- stakeholders, to draw up
Plan. I40 has become Tech Strategy 2020 was announced recommendations for action and to
institutionalised with the Platform to facilitate Germany’s position as a demonstrate how industrial
Industrie 4.0 (Platform I40) that now leading provider of technology, manufacturing can be digitised.
serves as a central point of contact science and innovation in e.g.
for policy-makers. BMBF and BMWI climate, mobility, health and
have jointly allocated €200 million security. ““We must (…) deal quickly with the
in funding. fusion of the online world and the
As part of the government’s Action world of industrial production. In
Stakeholders consider I40 as a Plan High-Tech Strategy 2020 from Germany, we call it Industrie 4.0.” –
strategic measure to consolidate March 2012, ten “Future Projects”, Angela Merkel, German
German technological leadership in including I40, were developed to Chancellor
mechanical engineering. I40 has support the High-Tech Strategy. In
managed to limit segregation among the CDU-CSU-SPD government’s
industry sectors, to swiftly move coalition agreement for the
research into mainstream practice in legislative period of 2013 onwards,
a fairly short period, and to scale-up I40 was deemed as vital in ensuring
nationally to become one of the technological leadership.
largest industry networks of its kind.
Policy levers for Germany’s Industrie 4.0
Source: Digital Transformation Monitor
3Germany: Industrie 4.0
Combining top-down, Moreover, the public funding behind Overall, there is some variance in the
the operation of the I40 Platform level of private investment return on
public steering with stems mainly from BMWI. The public funding according to
stakeholder platform however works on a company-size. Smaller IT and
voluntary basis. Only the main office technology companies typically
collaboration behind the platform receives provide a two to one ratio between
I40’s policy levers include an funding, while the rest of the private investment and public
agenda-setting, visionary and top- participating stakeholders finance funding. For German medium-sized
down steering role for the their own participation and time companies, corresponding to the
government through the BMBF and spent for example legal and technical German Mittelstand that covers
BMWI ministries and in the form of activities. companies with between 50 and 500
strategies and funding. However, employees, the ratio is just below
emphasis has been given to build up Private financing and in- four to one between private and
collaboration and partnerships. Idea kind contributions public financing.
development and practical This set of companies work mainly in
implementation is largely carried out Industry financing is essential for the
running of I40 and its platform. the production field. However, the
by industry, science and social technology companies of the same
partners e.g. through the National Overall, as part of the funding
arrangement, industry partners size behave fairly similarly when it
Academy of Science and Engineering comes to the leverage ratio. The
(Acatech) and the I40 Platform, but provide in-kind and financial
contributions for the research they larger companies provide approx. a
in collaboration with policy-makers. five to one ratio of private to public
participate in. SMEs can get up to 60
The main emphasis of the initiative % in public financing, but typically financing. They however take
is on technology deployment and they have a share of around 50%. significantly longer to bring products
structural change of industry by Larger companies receive below 50 or services to the market.
promoting IoTS and CPS in industry % in public funding according to EU
processes – with comparatively less funding rules.
A platform for
emphasis on digital skills. In
SMEs would thus typically account
digitalising industry
addition, while the funding model is
based on public sources, targeting for half of the project costs and An I40 research agenda was initially
research, partnership-building, larger companies for slightly more. prepared seeking to foster research
competence centres and test-beds, In order to receive public funding in and innovation and to transfer
industry contributions are also research projects, the project scientific results into technology
complementary sources. participants have to calculate a development.
budget for the planned work. The
The dynamic I40 platform was later
Public funding from ministries calculate if budgets and
developed in 2015 and is tasked to
activities are realistic and they also
BMBF and BMWI follow up on the financing of the
develop recommendations and
advise policy-makers on I40
Funding of up to €200 million has projects, in particular by assessing if
implementation, support the
been provided by the government, the beneficiaries indeed did invest
creation of knowledge, standards
following BMBF and BMWI their share of the money.
and examples, mobilise businesses
contributions. BMBF has given €120 There is no clear or accepted and SMEs, disseminate
million for research activities and definition for which activities and understanding, promote global
calls for proposals targeting areas of research qualify as industry 4.0; the networking and ensure the practical
IT systems for CPS, IoTS and I40.² distinctions for what falls under operation of I40. The platform
BMBF has also provided funding for industry 4.0’s reach are somehow initiates, funds and supports
testbeds, aimed at SMEs in ambiguous. It is therefore research and company-led projects
particular. BMWI has responsibility considered difficult by BMBF and and test-beds and competence
for funding I40’s work on BMWI to compile data and quantify centres for the piloting of production
standardisation and regulation. It figures on how much money is spent systems.
has also offered €80 million in by private sector sources. Neither do
research funding, for example At director-level, the platform is
the ministries ask beneficiaries how
through the “Autonomics for currently chaired by the Minister for
much money is invested in I40
Industrie 4.0” and “Smart Service Economic Affairs and Energy, Sigmar
activities. An evaluation study has
World” programmes. Gabriel, and the Minister for
however provided some insights on
Education and Research, Johanna
the leverage effect of public to
Wanka, and by industry, scientific
private finance in I40.³
and trade union directors. An
industry-driven Steering board has
the responsibility for strategy
development.
4Germany: Industrie 4.0
While the Strategy group provides Concepts and focus A good starting position
political guidance and agenda
setting, the Secretariat and Project areas - CPS and IoTS for I40 rollout
office ensure organisation and enables value creation Having maintained a stable
coordination. A Scientific Advisory manufacturing labour force and
Committee is advising on scientific The I40 initiative targets knowledge,
financial and regulatory framework know-how simultaneously with an
and program-related matters; it has ongoing upgrading of technology in
a fund from which it can support conditions for enhancing I40. The
focus areas are pursued by seeking industry processes, Germany had a
projects. Finally, five working groups good starting position for its I40
ensure the thematic work on to integrate concepts such as CPS
into manufacturing as well as IoTS strategy. It can build on its
reference architecture and experience from the 1990s –
standardisation, research and into industrial processes, thereby
bringing together information, responding to the “Third Industrial
innovation, security, legal Revolution” - with IT reform in
framework and training.. resources and people. The
endeavours are expected to improve industry and company re-
organisation.
Target audience – value creation, work organisation,
and downstream services. Similar to the 1990s, labour unions
emphasising businesses, have been highly integrated in the
In a nutshell, I40 enables plenty of
SMEs and politics Industry 4.0 related opportunities, dialogue and are supportive of
including: customer-specific design, technical integration and re-
Aiming to enhance the digitisation of
flexibility through CPS-based organisation of workplaces. The
industrial processes and provide
networking; improved decision- active role of scientific actors in
know-how for different target
making and early verification of shaping visions, tools and knowledge
groups, I40 targets large
design; adaptation of resource has also driven forward I40. Coupled
corporations, entrepreneurs and in
consumption; interactive to the benefits of new digital
particular SMEs in industry sectors.
collaboration of workers and technologies and CPS, companies
Representatives from policy,
systems; and improved work-life have displayed significant interest in
research, social, industry and
balance by flexible work models engaging with research, prototyping
business domains cooperate to
and collaboration on I40 matters.
realise I40. FU worked on the initial
concepts and launch of the I40
initiative.
SWOT Matrix for Germany’s Industrie 4.0
On behalf of scientific and
technological groups, Acatech
provided office functions the initial Strength Weaknesses
work. The I40 platform was
launched by Federal Association for
• Comprehensive framework with • Ensuring actual deployment at
Information Technology, broad involvement of policy- shop-floor level, which will
Telecommunications and New Media makers, industry, science and become increasingly relevant
(BITKOM), the German Engineering social partners enables it to push
Federation (VDMA) and Electrical forward I40 at all levels
and Electronic Manufacturers’
Association (ZVEI).
Opportunities Threats
“Plattform Industrie 4.0 (…) has
developed into one of the world's
largest networks for the digitisation • International cooperation • Balancing between different
of industry. The platform is a highly opportunities and transferability industrial and sectoral interests
sought-after partner (…).” – of I40 platform
Sigmar Gabriel, Federal Minister
for Economic Affairs and Energy
Source: Digital Transformation Monitor
5Germany: Industrie 4.0
A dual strategy design The working group Overcoming diverse
drives I40 behind I40 – a driving goals and interests
From a policy design perspective, a force Initially, the key challenge was to
dual strategy was opted for The I40 implementation followed a bring all stakeholders together. The
combining a leading market strategy number of steps. After being different goals between companies
with a leading supplier strategy. The launched by FU in January 2011, I40 and trade unions and among
main is to become both, a leading was adopted through the High-Tech competing German industrial groups
supplier of smart manufacturing Strategy 2020 Action Plan. Based on did initially restrict the platform’s
technologies as well as to develop the High-Tech Strategy 2020, the I40 influence in the wider manufacturing
new lead markets for CPS Working Group, chaired by Dr. Dais landscape. The government had first
technologies and products. Initially, and Prof. Kagermann, and working refrained from joining the platform,
I40 was designed as a research under the coordination of Acatech, but eventually decided to participate
agenda to coordinate research was created and funded by BMBF and to enlarge the group to improve
initiatives and promote and tasked to formulate an coordination, collaboration and
conceptualisations. implementation strategy. uptake.
The I40 network platform was later The working group delivered its final While business associations run the
launched and its structured design report in April 2013, outlining platform, BMWI and BMBF assumed
builds bridges between industry, actions for an I40 strategy and an active role in developing the
science, and policy-makers, platform. Following the group’s platform to what it is now, through
facilitating coordination and cross- work, the I40 Platform was set-up by political leadership and agenda-
industry exchange of know-how and BITKOM, VDMA and ZVEI and it setting. Having emphasised the
technological innovation. The design became the implementation advancement of concepts and
involves a steering role for BMBF mechanism for I40 and coordination. standards, I40 will need to
and BMWI on the basis of formulated increasingly address SMEs and the
strategies and funding and a vital The I40 implementation have been shop-floor level operationally, where
role for industry actors in driving the supported by technology much of the actual transformation
practical implementation. programmes, such as the “Smart occurs, in terms of successfully
Service World” and “Autonomics for integrating new digital and industry
In essence, I40 has been put in place I40”, launched to promote IoTS and processes and adapting work
through a cross-sectoral approach, the Cyber-Physical Production organisation.
implemented by a long-term and Systems project (2012) aiming to
gradual process, combined with develop CPS modules for production Achieved results: I40 is
migration strategies that can deliver
results immediately.⁴
systems. now mainstream
The Boston Consulting Group
Targeted and/or achieved results for Germany’s Industrie 4.0 expects productivity benefits to be
around €90-150 billion over the next
5-10 years. ⁵ Overall, I40 enables
new ways of creating value, novel
business models and helps SMEs to
become temporary production
networks with precise estimates on
their contributions.
Being launched as a research agenda
in 2011, I40 has moved into
mainstream in terms of
collaboration and deployment in a
very short time-frame. While it’s still
Source: Digital Transformation Monitor
early days, the initiative has been
successful in transferring research
into practice, e.g. by supporting
testbeds and a reference architecture
(RAMI 4.0).⁶ BMWi has funded ten
I40 competence centres, with five
more to come.
6Germany: Industrie 4.0
By facilitating partnerships and The vital role of
dialogue, I40 has also helped to References
avoid a segregation of industry stakeholder
domains and enabled integrative engagement and 1http://www.bmwi.de/EN/Topics/Econom
embedded systems. The I40 Platform y/Industrial-policy/industrie-4-0.html
is one of the largest and diverse I40
political involvement ²https://www.bmbf.de/de/zukunftsprojekt
network globally helping One key lesson learned concerns the -industrie-4-0-848.html
stakeholders and policy-makers at need to enlarge the I40 platform ³ Prognos AG (2014) KMU-innovativ IKT:
drive forward I40 at all levels. model with more participants and Chancen für Unternehmen - Förderung im
Schwerpunkt „Softwaresysteme und
give it a stronger political basis, in
Achieving significant order to overcome competition
Wissenstechnologien“
4 FU and Acatech (2013) Securing the
scale at national level among industry groups through future of Germany manufacturing industry
collaboration on common norms and
and offering global standards as well as the integration
– Recommendations for implementing the
strategic initiative INDUSTRIE 4.0 – Final
transferability of industry domains. In this respect, report
data driven business models will 5 Boston Consulting Group (2015) Industry
I40 has since its launch already been
become a major driving force of 4.0: The Future of Productivity and Growth
significantly scaled up at the
Industrie 4.0 in the future. in Manufacturing Industries
national-level through strategy 6 BMWi (2016) Digitization of Industrie –
development, structured stakeholder Another major factor behind the
Plattform Industrie 4.0, Progress Report -
engagement, deployment etc. In policy design relates to the April 2016
terms of transferability, the platform importance of engaging stakeholders 7 acatech (2016): Industrie 4.0 in a Global
could be considered as a model to and the “Mittelstand”, i.e. SMEs, Context. Strategies for Cooperating with
follow for many countries, although through targeted funding, test-beds, International Partners. Available on:
national industry structures, IOT-support and further http://www.acatech.de/fileadmin/user_up
specialisation and qualifications qualification. The integration of load/Baumstruktur_nach_Website/Acatec
must be considered. SMEs into I40 and global value h/root/de/Publikationen/Projektberichte/a
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While Germany with the I40 policy df
prepared for technological
initiative was first to tap into this ⁸ Centre for Strategy and Evaluation
adjustment, due to a lack of specialist
new way of pursuing Services LLP (CCES) (2016) Industry 4.0 –
staff or unfamiliarity with new
industrialisation, the industrial Study for the ITRE Committee
technology.⁷
transformation is a global trend;
many countries, such as the
Netherlands, France and UK,
havetaken steps to support IoTS and
CPS in manufacturing.
© SasinTipchai/Shutterstock.com
© SasinTipchai/Shutterstock.com
7About the Digital Transformation Monitor The Digital Transformation Monitor aims to foster the knowledge base on the state of play and evolution of digital transformation in Europe. The site provides a monitoring mechanism to examine key trends in digital transformation. It offers a unique insight into statistics and initiatives to support digital transformation, as well as reports on key industrial and technological opportunities, challenges and policy initiatives related to digital transformation. Web page: https://ec.europa.eu/growth/tools-databases/dem/ This report was prepared for the European Commission, Directorate-General Internal Market, Industry, Entrepreneurship and SMEs; Directorate F: Innovation and Advanced Manufacturing; Unit F/3 KETs, Digital Manufacturing and Interoperability by the consortium composed of PwC, CARSA, IDATE and ESN, under the contract Digital Entrepreneurship Monitor (EASME/COSME/2014/004) Authors: Demetrius Klitou, Johannes Conrads & Morten Rasmussen, CARSA and Laurent Probst & Bertrand Pedersen, PwC DISCLAIMER – The information and views set out in this publication are those of the author(s) and should not be considered as the official opinions or statements of the European Commission. The Commission does not guarantee the accuracy of the data included in this publication. Neither the Commission nor any person acting on the Commission’s behalf may be held responsible for the use which might be made of the information contained in this publication. © 2017 – European Union. All rights reserved.
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