7. Utilising Industry 4.0 to modernise Germany as a production location Germany is one of the world’s leading industrial locations and therefore has a pole position in the competition for the best solutions for Industry 4.0. Industrial production and services located near manufacturing areas generate more than half of total German GDP. Germany is leading in many digital innovations in connection with production technology. However, competition is keen, in particular with the USA and Southeast Asia (Japan, South Korea and China). For example, the National Network for Manufacturing Innovation in the USA is being funded with US$1 billion between 2012 and 2022. Digitising industry will open up potential additional cumulative value added of €425 billion in Germany alone. Projections put productivity gains at up to 30%, annual efficiency gains at 3.3% and cost reductions at 2.6% annually. The sectors that will benefit most in the next five years are the automotive industry with an increase in revenue of €52.5 billion (13.6%), mechanical engineering (€32 billion or 13.2%), process industries (€30 billion or 8.1%), the electronics industry (€23.5 billion or 13%) and ICT (€15 billion or 13.4%). With Industry 4.0, both our notion of manufacturing and its design will change. The distinction between manufacturing and services will become less important, and global manufacturing competition will also be digitally driven or based on ICT. We have every opportunity to use and build upon our industrial edge, for example in digital control of automobiles or complex production processes. To do this we must greatly expand our own ability to construct digital technology components. Only then can we tap the enormous potential for more efficient, customer-oriented and resource-conserving production and create additional value added by means of new business models. www.de.digital 41