digital readiness for global opportunitiesopportunities of digitalization at the company level...

June 13, 2017, Cologne

Dr Vera Demary

Digital Readiness for Global Opportunities

Contents

► DIGITALIZATION AS A GLOBAL OPPORTUNITY

► DIGITAL READINESS IN GERMANY

► CONCLUSION


The importance of the digital transformation

Source: Google Trends, 2017

0

20

40

60

80

100

120

20

04

-01

20

04

-04

20

04

-07

20

04

-10

20

05

-01

20

05

-04

20

05

-07

20

05

-10

20

06

-01

20

06

-04

20

06

-07

20

06

-10

20

07

-01

20

07

-04

20

07

-07

20

07

-10

20

08

-01

20

08

-04

20

08

-07

20

08

-10

20

09

-01

20

09

-04

20

09

-07

20

09

-10

20

10

-01

20

10

-04

20

10

-07

20

10

-10

20

11

-01

20

11

-04

20

11

-07

20

11

-10

20

12

-01

20

12

-04

20

12

-07

20

12

-10

20

13

-01

20

13

-04

20

13

-07

20

13

-10

20

14

-01

20

14

-04

20

14

-07

20

14

-10

20

15

-01

20

15

-04

20

15

-07

20

15

-10

20

16

-01

20

16

-04

20

16

-07

20

16

-10

20

17

-01

20

17

-04

Google searches for “digital transformation” worldwide, relative to the highest number of

searches during the period


The role of manufacturing in Germany and Japan

Source: OECD, 2017

0

5

10

15

20

25

30

35

40

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Germany Japan United States Korea United Kingdom Euro area

Industry activity as a percentage of gross value added


Digitalizing manufacturing

Consumer demands

Scarceresources

Frame-work

Manufacturing industry

DigitalizationIndustry 4.0


Source: Wikimedia Commons

World shipping routes, 2012 World airline travel, 2009

Business as we know it


Business tomorrow?!

Source: Pixabay


Digitalization – An international perspective

Index from 0 (no digitalization) to 100 (high degree of digitalization), 2015

Source: WEF, 2015

0 10 20 30 40 50 60 70 80

Overall digitization index

Topics:

Infrastructure

Private use

Business use

Public use

Economic impact

Societal impact

Germany Developed countries


Digitalization – Where do we stand today?

Source: Wikipedia, 2017


Opportunities of digitalization at the company level

Source: Demary et al., 2016

Efficiency andproductivity

Improved use of input resources, raw materials, energy

Improved control of value-added chains

Flexibility andtransparency

Flexible production processes, batch size 1

Transparent production processes

Digital businessmodels

Increased benefits for customers

Increasing importance of online platforms

New productsand services

Anything as a service (XaaS)

Greater differentiation of product and service portfolio

Selected opportunities


Challenges of digitalization

Standards

Infrastructure

• Broadband internet

• Submarine cables

• Frequencies for mobilecommunication

Applications

• Software

• Cloud

• Apps

Users

• Companies

• Public administration

• Private consumers

Selected challenges


Contents



► CONCLUSION


Industry-4.0-Readiness

58,2

30,9

8,6

1,7

0,6

0,0

55,0

28,3

13,4

2,9

0,4

0,0

00 10 20 30 40 50 60 70

Outsider (Level 0)

Beginner (Level 1)

Advanced (Level 2)

Skilled (Level 3)

Expert (Level 4)

Excellence (Level 5)

2016 2015

Percentage of surveyed companies, only companies with at least 20 employees in the

manufacturing sector

Source: IW Consult, 2015, 2016


Opportunity versus risk in Industry 4.0

57,1

22,917,5

5,4

25,4

71,7

Disruptive digital transformation. Continuous digital transformation.

More risk than opportunity Balanced More opportunity than risk

Percentage of the companies in the manufacturing industry, depending on the type of digital

transformation, 2015

Source: IW Köln/IW Consult, 2016


What German companies expect from Industry 4.0 until 2020

Increase of revenue

• 12.5 % over 5 years

Necessary investment

• 40.1 bn. euro annually

Machinery and plant engineering, automotive, process industry, electrical and electronic

industry, ICT, 2015

Source: PWC, 2015


Contents



► CONCLUSION


Conclusion

The future is already here.William Ford Gibson

You cannot step twice into the same stream.Heraclitus of Ephesus

Change before you have to.

Jack Welch


Contact

Dr Vera Demary

Head of the Research Unit “Structural

Change and Competition”

+49 221 4981-749

[email protected]

digital readiness for global opportunitiesopportunities of digitalization at the company level...

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