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Now in its 14^th year, Industrie 4.0 is still leading the way to manufacturing’s future in Europe as the continent seeks to become more competitive in a changed geopolitical environment.

A burning question for me as I was planning my visit to the Hannover Fair last week was: after 14 years in the market, what’s the state of Industrie 4.0 in Europe today?

I had a sneaky suspicion that it was going to be hard to get an answer to this question as I toured the massive exhibit halls, attended conference sessions, and spoke to many German and other European manufacturing and technology executives.

My suspicion proved to be correct. The reason: it’s a complicated question. There are many variables that influence the answer—company size, industry sector, and country dynamics as well as the standard leadership, organizational, and cultural factors in companies. The other major factor at work is that the Hannover Fair is primarily a technology supplier exhibition, so I had to guard against hype and bias that might shape opinions.

Nevertheless, there were signals, indications that suggest that digital transformation in manufacturing is an evolving concept in a Europe that, because of the current geopolitical climate, has a greater motivation and urgency to find new ways to innovate and compete.

Assessing Digital Maturity

In the U.S., MLC research has been showing that manufacturers’ digital maturity has slowly progressed from initial stages of adoption to what MLC has been calling the next phase of 4.0 characterized by larger and more extensive projects and the beginnings of business model transformation, where the real payoff from 4.0 will be found.

Most manufacturers surveyed by MLC cluster around the middle of a digital maturity scale of one to 10. Only a few inhabit the rarified higher ground, and there are still many small and medium size companies that are trying to climb up to the middle of the curve. Would I find a similar status among the manufacturing community in Europe, I asked myself, or would there be a substantial difference and even the possibility that European manufacturers are ahead of their U.S. counterparts?

My sense coming out of Hannover is that, in the main, there is a rough equivalence in where the industries stand in adoption of digital transformation. This sense was validated in a conversation I had at Hannover with Raimund Klein, chief executive officer of the International Center for Industrial Transformation, which describes itself as a non-profit environmental, social and governance institution which champions manufacturing transformation.

Klein, who spent 37 years at Siemens, claims his Smart Manufacturing Readiness Index shows that, globally, manufacturers are still at an early stage with the digital work. Using a zero to five scale, the index pegs global manufacturing readiness for digital transformation as a whole at 1.88, with North America at 1.80 and Europe at 1.62.

Why the relatively low numbers? Leadership and organizational constraints, as well as legacy system issues, are the key factors governing readiness and adoption, he says. MLC research has been showing similar findings for many years.

Leading the Charge in Data Management

But whatever the numbers, I suspect that the Europeans may be ahead in one crucial area – data management.

The reason I say this is because the Europeans are addressing important aspects of data management such as interoperability and data sharing via a large collection of technical associations and initiatives, some of which are unknown to many U.S. manufacturing executives.

The theory behind the emphasis on data is that manufacturers will innovate faster and compete more effectively if they can share and leverage data up and down supply chain ecosystems, while maintaining what is called “data sovereignty”, the ability to control IP and who can access data.

One of the latest European initiatives I learned about at Hannover last week is called 8ra. Begun about one year ago, the 8ra Cloud Edge Continuum is an attempt to deal with a “fragmented” European cloud landscape that is said to be holding back interoperability and integration.

8ra’s mission, a Platform Industrie 4.0 initiative backed by 12 EU member states and about 120 industrial and research partners, is to “establish a resilient, open and future-proof” next-generation cloud infrastructure.

“Without a coordinated effort, Europe risks falling behind in key technology fields such as AI, industrial IoT, the metaverse, and cybersecurity,” the organization says.

A Reliance on Platform Industrie 4.0

The concept of Industrie 4.0, backed by the German government, was introduced at Hannover in 2011 (MLC introduced its Progressive Manufacturing idea, which it later called Manufacturing 4.0, is 2005). Over the years, the Industrie 4.0 concept has evolved to include adoption of the OPC UA specification, in 2020; the formation of the Industrial Digital Twin Association (IDTA), also in 2020; and 8ra in 2024. This year at Hannover, Platform Industrie 4.0 was emphasizing the industrial metaverse, which MLC and Deloitte have defined as a collection of technologies.

Platform Industrie 4.0, a German government-based organization, also promotes its Manufacturing-X initiative to digitize supply chains as well as its 2030 Vision to shape digital ecosystems.

There is also a plethora of technical associations addressing different aspects of data interoperability. For example, the Industrial Data Spaces Association, a Dortmund-based non-profit that says it has 170 members from 30 countries, is focused on establishing technical standards for so-called data spaces. The goal is to enable trusted data sharing across industries and borders.

Another group, which grew out of the Platform Industrie 4.0 initiative, is the IDTA. Based in Frankfurt, the IDTA provides education on digital twin technology, including training and seminars. The IDTA claims about 120 members.

In the U.S., CESMII, The Smart Manufacturing Institute, a Department of Energy program and part of the Manufacturing USA network of 16 manufacturing-oriented institutes, has been working with the IDTA, the OPC Foundation, and other organizations to create a best of breed system architecture for digital product passports, which will be required by the European Union in 2027. CESMII has also been working with the Manufacturing-X group. (In the U.S., NIST has also been working on data interoperability; MLC Board member Jim Davis of UCLA has been participating in this work).

At Hannover, CESMII CEO John Dyck, a new member of the MLC Board of Governors, announced an agreement with the OPC Foundation, a Scottsdale, Arizona-based group, involving a tool CESMII has developed to build what are called standard manufacturing information models (MIMs) for manufacturing assets/processes and supply chain data exchanges. This open-source tool is called the CESMII SM Profile Designer. In order to accelerate the adoption of these MIMs, the OPC Foundation will launch an open-source project and work together with the CESMII ecosystem to sustain it, empower the OPC community of over 1,000 members to learn about and use the tool, and develop new MIMs for CESMII’s SM Marketplace.

In addition to its collaboration with CESMII, the OPC Foundation in March announced an “expanded collaboration” with IDSA to enhance data interoperability and data governance in the automation industry. And OPC also has a cloud initiative underway. It held a conference on this topic at Hannover.

But there appears to be a larger critical mass of organizations working on the various aspects of data interoperability and sharing in Europe than in the U.S. The question is: can all the European associations and organizations working on data collaborate effectively and not overlap and create confusion? Time will reveal the answer to that question but what is clear today is that it would be very difficult for most manufacturing companies, particularly those in the U.S and especially small and medium size companies., to even be aware of what many of these groups are doing let alone understanding their concepts and adopting their approaches to data interoperability and data sharing.

As Douglas Ramsey, a managing partner at Axial GA, a consulting firm, and CESMII’s delegate to the International Manufacturing-X Council, said at a meeting of the IDTA at Hannover last week: “If I asked an American manufacturing audience about data spaces, I would get a blank look.”

A Heightened Worry About Bureaucracy

There was a pervasive feeling at Hannover Fair this year that the best way for European industry to become more competitive, in order to deal with issues such as the current disruptive geopolitical environment, is to double-down on innovation, cooperation, investments in technologies such as AI, and to reduce bureaucracy to speed up change.

Although there have been complaints about bureaucracy in the past, there was a heightened intensity about it at the Fair this past week.

“Sometimes we don’t believe in ourselves in Germany,” said Cedric Neike, CEO of Digital Industries at Siemens, during a panel session called Leaders’ Dialogue. “It is difficult to get rid of the bureaucracy. We need to have boldness to invest in the right things and not to invest in the past.”

Added Peter Leibinger, President of the Federation of German Industries and Chairman of the Supervisory and Administrative Board at TRUMPF SE & Co. KG: “We have an attitude, knowledge and power problem. We have to kill the monster bureaucracy. It creates a defensive attitude in our companies. We must get back to risk affinity.”

Convinced that Industrie 4.0 has been the right technological foundation to ensure industry competitiveness, industry leaders believe that they can “upgrade” the I4.0 concept with AI – if adoption can be accelerated. There was an abundance of AI products in the thousands of exhibitions at Hannover last week – nearly every tech vendor was supporting AI in one way or another.

The need for a new European mindset based on greater cooperation and collaboration, data sharing, and less regulation will be key to making Europe more competitive. This will require extraordinary levels of coordination, cooperation, and, most importantly, leadership. Can European industry rise to the occasion?

The challenge was perhaps best summed up by Valentino Valentini, Deputy Minister, Ministry of Enterprises and Made in Italy, who said: “We have to get out of the triangle of the U.S. invents, China copies, and Europe regulates.”

 

About the author:

 

David R. Brousell is the Founder, Vice President and Executive Director, Manufacturing Leadership Council