Industry 4.0

Seize the Digital Moment

Germany's car industry is ripe for further digitization.
  • Why it matters

    Why it matters

    Digitization will radically change our economies, but it still unclear how that will affect employment.

  • Facts


    • Germany’s strong industrial sector, which relies heavily on exports, has boomed since the financial crisis of 2008.
    • But as competition from Asia hots up, it is trying to digitize its industry, a process it calls “Industrie 4.0.”
    • Digitization is set to radically alter the business plans and labor needs of many traditional German businesses.
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Germany has benefited from globalization more than most other countries.

During the many years of rapidly growing world trade and the industrialization of many emerging economies, German-made luxury cars and high-quality durable equipment were in greater demand worldwide than ever before. The strong industrial sector, largely shaped by small and mid-sized businesses, has turned Germany into a magnet for foreign capital and workers.

But the global economy has lost momentum since the economic crisis in the winter of 2008/09, and globalization is now on hold. No one knows whether and when this hiatus will end.

Some economists believe that the digitization of economic life is rendering cross-border trade obsolete. More and more tasks performed by humans until now are being translated into a language readable by machines, to be performed by interconnected and communicating computers and robots.

This unstoppable fourth phase of industrialization – after mechanization, mass production and automation – will undoubtedly have massive consequences for the international division of labor, consequences that have been difficult to discuss. There is a risk that many jobs will be eliminated in the future because they are performed by “intelligent” machines.

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