It is the topic with the biggest economic dynamic. Industry 4.0 is revolutionising the production process – and North RhineWestphalia (NRW), Germany’s industrial heartland, has a key role to play. It is here that investors from Germany and abroad meet a large and dynamic market.
Industrial revolutions have changed society over the past centuries. Mechanisation with water and steam power was just as groundbreaking as mass production using assembly line technology or, most recently, the use of electronics to automate production. Now, digital transformation is bringing about the fourth industrial revolution, the digitisation of production.
The term Industry 4.0 refers to the real-timecapable, comprehensive and intelligent networking of people, machines, objects and ICT systems in the smart factory of tomorrow. It provides enormous opportunities for industrial manufacturing processes. Germany, as the world’s leading industry supplier, offers outstanding conditions for this transformation. Companies are also increasingly investing in ICT solutions to meet the demands of Industry 4.0 transformation. At 97 billion euros, companies in NRW generate around one third of all German sales in this segment. One reason for this market power is the high concentration of telecommunications companies in NRW. Deutsche Telekom is based here, for example, and Vodafone controls its German business from here.
The convergence of strong industrial structures and the multitude of innovative ICT companies, in particular, provides the pre-requisites for the digitisation of production and logistics processes.
The dense industrial landscape in NRW is not only an attractive market for innovative solutions for digitising the entire value chain, there is also a correspondingly strong development of research expertise throughout the state. The leading-edge cluster “it’s OWL” in East Westphalia-Lippe, which is funded by the Federal Ministry of Education and Research and composed of a total of 180 partners, is particularly innovative in the development of intelligent technical systems. Here, world market and technology leaders are working together with research institutes in 47 projects on intelligent products and production processes. Harting, for example, a world-leading manufacturer of connection technology, developed the industrial mini-computer MICA. With its help, older machines and systems can also be integrated into digital communication and control networks, making them fit for Industry 4.0 applications.
Potential for venture capitalists and investors
The calculability of delivery dates, one of the greatest challenges in industrial production, can also be improved using applications from NRW. The Integrative Production Technology Excellence Cluster for High-Wage Countries at RWTH Aachen has developed a production control system based on a cyber-physical support system and intelligent sensor technology as part of the ProSense research project. With this M2M communication, companies can significantly improve their adherence to delivery dates and thus, massively increase productivity.
The Fraunhofer Institute for Material Flow and Logistics (IML) in Dortmund, one of the world’s largest logistics research institutes, shows just how much networking is changing the factory of tomorrow. A networked warehouse without conveyor belts has been developed there using swarm intelligence. Individual driving robots organise themselves internally and facilitate the decentralised control of the goods routes.
In general, the intelligent networking of production processes requires the use of complex software. To this end, traditional mechanical and plant engineering must work closely with specialists to develop production software. There is great potential here for venture capitalists to invest in startups accordingly. In particular, the rapidly growing spin-offs at universities with innovative product developments require financial partners. One example of these startups is the Düsseldorf-based firm Cumulocity, which has developed a software that facilitates mobile communication between man and machine in the Internet of Things. Cumulocity’s platform enables devices to be controlled worldwide via the Internet, where real and virtual reality actually merge.
NRW is precisely where ideal investment opportunities arise for companies whose products and services offer solutions in industrial production – because it has the ambition to shape digital transformation.
NRW plays a pioneering role in the central issue of IT security
The state government wants to equip North Rhine-Westphalia with blanket-coverage gigabit networks by 2025. Business parks and schools should and will have a much faster service. The Gigabit Master Plan adopted in April 2018 will help to accelerate the expansion of fiber-optic technology, which is urgently needed socially and economically. In the coming years, the state government will create the framework conditions to invest seven billion euros in North Rhine-Westphalia for digitisation, including at least five billion euros for the expansion of gigabit-capable digital infrastructures.
The demands for data security in Germany are traditionally very high, and the state of North Rhine-Westphalia has once again devoted itself specifically to this area. It has taken on a pioneering role by working with the world-renowned Horst Görtz Institute in Bochum, for example. Moreover, a total of 30 universities and research institutes in NRW are conducting research on IT security related issues, such as how data encryption can be improved for companies and private users.
But North Rhine-Westphalia has even more to offer than innovative technology clusters, an outstanding infrastructure and excellent research facilities. NRW is already the most popular location in Germany for international investors. More than 19,000 foreign companies are already at home here. Last but not least, they appreciate the enormous purchasing power in the state. Around 160 million people, which is almost a third of all consumers in the EU, live within a 500-kilometer radius of the state capital Düsseldorf. The inhabitants of NRW alone spend 329 billion euros a year.
NRW.INVEST is the economic development agency of the German State of North Rhine-Westphalia. It provides all interested investors with comprehensive information and full support for their business settlement project in this region