The last couple of years has seen the digital transformation outreach machine in overdrive. According to some quarters, the awareness levels across companies in this region have reached 80%, irrespective of the size of the companies. The focus now will naturally move on to how companies are actually faring on the adoption of digital transformation and what the challenges are that companies are potentially facing.
A recent media and industry engagement event organized by SingEx and international partner Deutsche Messe as a precursor to the impending Industrial Transformation Asia-Pacific (ITAP), a Hannover Messe event, explored the agenda of cross border technology transfers among Germany, Asia, and Singapore. ITAP is a leading trade event for Industry 4.0.
The German delegation was led by the Prime Minister of Lower Saxony, Stephan Weil, and together with leaders from key industry organizations in the region, they addressed the priorities for the next stage of manufacturing transformation in Asia.
German Expertise in Advanced Manufacturing
Germany is among Europe's leading nations when it comes to vehicle construction and the technology industry. Think A380, Volkswagen, Mercedes. Braunschweig-Wolfsburg Research Airport is Europe's second most important research center, specializing in traffic control systems and air safety. Known as the ‘Land of Innovation,' Lower Saxony is Germany's frontrunner in renewable energies such as wind power and also as a region for biogas.
Indeed, PM Weil conceded that “industrialization…is really one of the bases of our success… especially in the [aftermath] of the world financial crisis of 2008-2009.”
Pointing out that the structure of the German economy is "somewhat special," Weil explained that it was "based on thousands and thousands of small and middle-sized companies with many of them being very innovative and thus entering the global market…Although they are rather small, they are the leading companies in their special sectors."
Weil saw a parallel to Singapore, whereby both Germany and Singapore have “no commodities - we need brainpower and innovation. Industry 4.0 is the next phase of industrial modernization, and to be leading this is, I think, the best chance for us in the next decade, although there is very strong competition all over the world.”
When asked what developing countries could learn from Germany in terms of their digital transformation journeys, Weil summarized three areas of German focus: “I think a huge part of the success of Germany lies in the fact that our employees have a higher level of qualifications; we also promote a culture of entrepreneurs who are innovative; lastly, we need stability economically, socially and politically - these give the companies the space that they need for their innovation.”
Weil also stressed that for free trade, which Germany stands by, all should have access to information; however, intellectual property will be a burgeoning problem as a result.
German ambassador to Singapore, Dr. Ulrich A. Sante chimed in, "You will only have the chance to participate in the advancement of an economy if everybody has access to data; however, the speed at which data is being produced and at which developed industries are able to work with data, will eventually, if not managed well, lead to further separation of countries that are very developed and countries that are less and less developed. We need to talk about who has access to data at international levels so that we will not have a new separation of the world now, under different conditions."
An APAC Perspective
In APAC, in terms of digital transformation journeys, SingEx chief executive officer, Aloysius Arlando, emphasized that “workforce and talent remain key concerns as they impact how the digital transformation journey is not only started but how it is continued.”
To this end, engaging institutes of higher learning will be of paramount importance.
“Short-term returns are another concern, as many companies cannot invest over a long period. Also important is the knowledge gap between management and practitioner levels in companies, these need to be aligned. Companies are looking for customized solutions for their needs. There is a need to both inspire learning and facilitate adoption across the region and across sectors.”
Organizer SingEx hoped to address these needs and concerns by curating a “differentiated event format” at ITAP. The goal is to facilitate the exchange of ideas and information between manufacturers, suppliers and solution providers, to help them form the right partnerships to drive their company transformation forward, whilst engaging associations, think tanks and institutes of higher learning all within this ecosystem.
Dr. Andreas Hauser, director for Digital Service, TUV SUD, Singapore, pointed out the importance of strong leadership to drive the transformation journey “beyond pilots and scale-up seriously.”
“It is not just putting the pilot on the RnD budget,” continued Hauser, “but about having a strong business case that you put your long-term strategy on top of. Few are willing to take the risk. Change management has to lead.”
A Collaborative Approach Across Regions
Strong intergovernmental engagement in Industry 4.0 adoption has also become part of the digital transformation conversation.
“Collaborative efforts will be a big thing, the old business models are obsolete,” said Douglas Foo, president of Singapore Manufacturing Federation. “Coming together to produce goods and services that will be better and faster for the community is going to be the name of the game. The standardization of ASEAN is now evolving very quickly, and the exciting thing is that ASEAN is now going to be the fourth-largest economy by 2030.”
Indeed, discussions about the whole ASEAN, which has a combined population of 650 million, as a manufacturing and consumption hub have been underway.
PM Weil concurred. "The rise of protectionism has impacted manufacturing industries…The massive conflicts between the most powerful countries in the world have led to escalating trade tensions. It is very important for Germany to maintain an amicable relationship in the region as SEA is becoming a manufacturing hub. We share the same values of fair trade and being open to each other all over the world. And when you think about it, ASEAN, with its 650 million population, and the EU with half a billion, are very powerful [together] as well."