Germany, Europe’s largest economy, is facing a significant threat from digitisation. The country’s industrial sector, which contributes a quarter of its GDP, is particularly vulnerable. While German firms excel in making complex, durable goods, they lag behind in the digital world. The country’s digital infrastructure is underdeveloped, with poor broadband coverage and slow internet speeds.
German companies are also reluctant to adopt new technologies. They prefer to stick to tried and tested methods, which could put them at a disadvantage as the world moves towards Industry 4.0, the next phase of the industrial revolution driven by data and automation.
However, Germany is not oblivious to the looming threat. The government has launched an initiative called Plattform Industrie 4.0 to help firms adapt to the digital age. The initiative aims to develop standards for data sharing and security. Yet, the fear remains that German firms might be too slow to adapt to the fast-paced digital world, leaving them vulnerable to competition from more digitally savvy firms from America and Asia.
Go to source article: http://www.economist.com/news/business/21678774-europes-biggest-economy-rightly-worried-digitisation-threat-its-industrial