HANNOVER, Germany—The theme of the 2016 World Economic Forum was “mastering the Fourth Industrial Revolution” but the buzzword back then was “disruption,” Matthias Machnig said today during a panel talk on the progress of Industrie 4.0, held here at the manufacturing tech fair called Hannover Messe.
A year later, everyone is talking about “transformation,” he said. “It’s a major success story.” He spoke in German, which the conference organizer had translated live into English.
A legitimate question at the start of last year was, how would companies like Siemens or BSF become disruptive? A year later, the industry has matured, and people are focused on appreciating a process that doesn’t lead to disruption, said Machnig, a department head at the German Ministry of Economics and Energy.
In addition to “disruption,” which was at least a problem for workers, the digitization of manufacturing cannot be only of concern to large companies, he said. “On our way, we should look at small and medium-size companies, or SMEs.” To that end, Germany has opened 15 centers of competence where such firms can get advice, as well as 6 of 12 planned digital technology hubs that focus on regional manufacturing issues that startups and other smaller firms face.
On a broader scale, Industrie 4.0 cannot be only the project of large, industrialized countries; it must be the project of many countries, Machnig said.
In the next few years, the smart manufacturing transformation must be a European and international movement, he said. “Digitization cannot go the way of protectionism.”
Responding to a question from Smart Manufacturing magazine about how the administration of US President Donald Trump is viewed in light of the strong preference for globalization widely on display at Hannover Messe, Machnig said, “What we can see is that there is a learning curve on the side of the American administration.”
However, people attending the first-ever G20 Digital Ministers meeting this month in Dusseldorf, entitled “Digitalisation: Policies for a digital future,” agreed on a working program for the G20: 11 focus areas, including data security, he said, speaking in English.
“We agreed with the American government … that we need open and free digital trade … and that we need common understanding of and investment in skills” that are needed to make digitization happen in manufacturing, Machnig added.
“So we are looking forward to having direct contact, and we are [understand] that there is a learning curve.”
If the US ends up isolating itself, other nations like China and Russia “will show themselves as very constructive,” Machnig said, quickly adding, “But we are interested in also working together with [the US], and I think the best way is to talk with each other and not about each other. So we should come to … forms of direct talks between the US government and the German government. That’s the best way forward.”
Machnig quoted “a Cisco manager” as saying recently, “In America, people talk about the Internet of Things, but there’s a lot of Internet and not a lot of Things”—and said he believed “this is the big opportunity for Germany and Europe: create the adequate framework for it.”
Paradigm shift also means new opportunities
No matter where in the world a manufacturer produces goods, they face a new paradigm of “digitize or die,” said Benjamin Gallezot, Directorate-General for Competitiveness, Industry and Services, in France’s Ministry of Economic Affairs and Finance.
It is important for manufacturers to see not only digitization’s challenges but also the new business opportunities it presents “because you can get new clients and get access to new markets,” he added.
Another important shift, Gallezot said, is “the boundary between industry and service is disappearing.”
On the subject of financing, he said the fact that the financing system in Europe is focused on material investments, like machinery, is problematic. As is France’s apprenticeship program, which is still focused on traditional manufacturing skills rather than digitization, he added.
SMEs need help today
Unsurprisingly, members of the panel agreed that SMEs make the manufacturing world go around and therefore need help transitioning to Industrie 4.0—now.
SMEs urgently need access to knowledge networks and financing and other investments, said Max Lemke, Head of Unit Technologies and Systems for Digitising Industry for the European Commission. Giving SMEs access to information about best practices is paramount, he added.
Standards and a “planning stage” are also important, he said. “They need to play with it before they can do it.”
Italy extending scope of Industria 4.0
Lemke pointed to Italy as showing advanced thinking regarding investment in SMEs—gesturing toward panel member Marco Taisch. (At another point, he said Germany is showing the the way on innovation hubs–with Mittelstand 4.0 and initiatives like Arena 2016.)
Taisch, a professor at the Polytechnic of Milan, mentioned Italy’s multi-billion-euro plan to support Industria 4.0—and specifically SMEs. He was quick to note that Italy is working to “extend the scope of Industria 4.0” beyond manufacturing.
Italy is one of the world’s design capitals—and not only regarding fashion, he said. Production design and the invention of new products are also in its domain.
“We need to see that Industria 4.0 is not just a platform for priming production but also the business of selling products,” Taisch said. “Intelligent products can talk to each other.
Digitization should allow this kind of business model—where value is added to products as they are used” out in the world.
Risk awareness campaign underway
He agreed with Gallezot’s claim: “It is digitize or die. The problem is to make them aware of this risk. We need to create awareness about what this Industria 4.0 is.”
SMEs tend to see “digitize or die” as a problem only for large companies, Taisch said. “We need to make them aware of the fact that digitization is their business.”
To work toward accomplishing that, one of the steps Italy has taken is to devised a “digital readiness assessment tool,” an online questionnaire.
“Through a number of questions, if they are mature enough for digitization,” he said. “But this is not the real goal. The real goal is to just make them curious: What should they do? What is Industria 4.0? It’s just a website to start internally a process to make them aware they have to digitize; otherwise, they will die.”