German family-owned firms, known as the Mittelstand, are embracing digital technology to stay competitive. The Mittelstand, which contributes over half of Germany’s economic output, has traditionally relied on quality engineering and craftsmanship. Faced with growing competition from Asia and America, these firms are now turning to digital technology to streamline manufacturing processes and offer new services.

One such firm, Krones, a packaging and bottling machine maker, has developed a digital system that allows customers to monitor production in real time. Similarly, Trumpf, a machine tool maker, is using digital technology to help customers optimise their production processes.

The shift towards digital technology is not without its challenges. The Mittelstand firms are often cautious, with many wary of sharing data due to security concerns. Additionally, the lack of skilled workers in digital technology is a significant hurdle.

Despite these challenges, the trend towards digitalisation is expected to continue. The German government is supporting this shift, with initiatives such as the Industry 4.0 strategy, which aims to help German manufacturing firms digitise their operations. The Mittelstand’s move towards digital technology is seen as crucial for Germany to maintain its position as a leading industrial nation.

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