Germany’s new industrial policy
For several decades industry has been the strength of the German economy. The Fourth Industrial Revolution, characterised by the wide use of the internet &digital technologies in all spheres of the economy, is transforming the market in ways which threaten the position of German manufacturing sectors. The challenge for Germany lies in new innovative leaders and IT tycoons entering the automotive sector, who have ambitious plans to create self-driving cars fully integrated with digital technologies. In turn, the German machine industry is afraid of competition from China, which is rapidly catching up, as it has vast financial resources to develop innovation and buy up foreign technology. The German state’s response to the challenges ahead lies in the Industry 4.0 concept, i.e. the construction of entire production plants capable of autonomously coordinating production processes amongst themselves. German companies need to gain dominant positions on the markets for smart devices and self-driving cars, urban mobility systems, complex systems for producing energy from renewable sources, and improving energy efficiency. This requires a radical change in German manufacturers’ existing business models, an increase in their competence in the use of digital technologies, and ensuring access for companies to modern IT infrastructure and the data they need.