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The digital transformation of industry

How important is it? Who are the winners? What must be done now?

1. The digital transformation of industry is creating tremendous opportunities for Europe – and confronting it with huge challenges
The possibilities opened up by connected, more efficient production and new business models are highly promising, yet the risks are equally dramatic. By 2025, Europe could see its manufacturing industry add gross value worth 1.25 trillion euros – or suffer the loss of 605 billion euros in foregone value added.

2. The digital transformation of industry is also driving a radical structural transition in Europe's economies
New data, connectivity, automation and the digital customer interface are challenging existing value chains. Companies must take a long, hard look at their products and skill sets. And they have to improve their digital maturity if they are to recognize new opportunities, develop suitable offerings and get them to market quickly.

3. The digital transformation of industry demands concerted action within Europe
The regulatory framework must be harmonized, with a new weighting given to relevant issues. At the same time, a powerful, no-gaps information and communications infrastructure is needed if European industry is to remain competitive. As standards are shaping our digital future, companies and governments need to get engaged seriously in their global definition.

This is the first study to scrutinize the implications of the digital transformation with regard to the "industrial heart" of Germany and Europe.

On the basis of an extensive analysis, we were for the first time able to measure the overall effect of digitization on the German and European economy. The findings reveal the dramatic consequences of the changes currently in progress: If Europe fails to turn the digital transformation to its own advantage, the potential losses for the EU-17 countries add up to 605 billion euros by 2025 – equivalent to the loss of well over 10 percent of the continent's industrial base.

But if Europe is able to harness the possibilities opened up by connected, more efficient production and new business models, its manufacturing industry could gain an extra 1.25 trillion euros in gross value added by 2025.

In light of these high stakes, our study makes specific recommendations on what companies, their associations and the governments in Germany and Europe can do to safeguard the future of their industrial base and generate positive employment effects. The key areas in which action is needed are digital maturity, common standards, powerful infrastructure, and pan-European coordination.

Download the report below (PDF 52 pages).

roland_berger_digital_transformation_of_industry_20150315.pdf Roland_Berger_digital_transformation_of_industry_20150315.pdf  (4.49 Mo)

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