Wednesday, May 18, 2016

Germany’s Industry 4.0 and the China Market

Excerpt from Keynote Speech by Mr. Bernd Koerber, Vice President of Business Development, BMW China at CEIBS 2nd Europe Forum 2016 Munich on May 18.

The term “Industry 4.0” is supposed to display the fourth industrial revolution. The first Industrial Revolution was driven by the steam engine and mechanisation, the second by Henry Ford’s assembly line and the third in the 1970s, when computers revolutionised the workplace. Now the three have coalesced, putting the manufacturing companies at the dawn of Industry 4.0, an age where “smart devices” really are smart enough to assume major control over their machines of manufacturing and distribution.

The Industry 4.0 Project is now part of the German government’s official High-Tech Strategy, which it is actively pursuing in conjunction with private sector partners. Its target is: “Ensure the Future of German Production”.

The Importance of Germany’s Industry 4.0 to China

From a quantitative perspective, China is the No.1 manufacturing country in terms of value added; its manufacturing industry takes up 31% of GDP, 9% higher than Germany. From a qualitative perspective, China’s goal is to transform from “Made in China” to “Created in China” and upgrade its manufacturing industry structure. China is facing challenges from both developing countries and developed countries in the manufacturing industry. With its aging society it is also facing demographic change. The number of Chinese senior citizens (over 60 years) was already over 200 million in 2014. As they are to Germany, resource efficiency and energy supply security are equally important to China. Meanwhile, China needs to gain productivity to maintain its competence and handle the challenges it faces.

Made in China 2025 echoes the idea of Industry 4.0. Similar to the German concept, China also emphasises applying IT technologies in Industrial Production. Premier Li Keqiang proposed a strategy – “Made in China 2025” – in last year's government work report, meaning to upgrade the industrial and technical standards in China. The country will implement this "Made in China 2025" strategy alongside an "Internet Plus" plan, based on innovation, smart technology, the mobile Internet, cloud computing, big data and the Internet of Things (IoT). Following this, informatisation and industrialisation will be unified and priority will be given to the development of ten particular fields, including information technology, new materials and agricultural machinery.

We at BMW are part of this happening and we are one of the main enablers in China.

More in the next issue of TheLINK, CEIBS alumni magazine.

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