Tomorrow’s global market leaders

2. A path from innovation to scalable business models
   To be global market leaders, German industrial companies have to remain innovation leaders, too. In terms of innovation, Germany has traditionally had much to offer, thanks to its numerous high-performance scientific institutes. What is difficult today, however, is transferring inventions from the world of science to industry and subsequently designing products that are marketable with business models that are scalable. For the time being, the ability to scale new digital technologies is still in its infancy. High investment costs present one of the main obstacles. For investment financing, companies are heavily dependent on the German banking sector. But that sector is losing relevance on the global stage. Therefore, high-growth companies have to rely on foreign capital to scale their innovations.

High investment costs and concerns about data protection are the biggest obstacles to using Industry 4.0
What obstacles do you see in the use of Industry 4.0 applications in your company? (in percent)

3. A public sector that is digital by default
   If the German public sector, with its five million civil servants, diligently pushes forward with digital transformation, it can become the pacesetter for the whole of society. That would be great news for German industry. Because the goods and services that public authorities in Germany procure are valued around 350 billion Euros, public services could set an example for massive digital scaling. At present, there is no lack of capital for ambitious infrastructure projects. Yet widespread investments have failed to deliver expected results. A functioning digital infrastructure, however, is the basic prerequisite for the successful digitization of German companies and, by extension, their future global competitiveness.

Germany far behind in e-government 2019

4. European digital sovereignty
   To an increasing degree, only those companies that can offer their products through digital platforms will maintain their position in the value chain. Particularly important are cloud infrastructures, extensive and fast data networks, data markets and a secure identity infrastructure. US and Chinese companies have a huge head start in these areas because they invested billions in their cloud solutions early on. It will not be easy for European infrastructure providers to catch up. It is impossible to develop a globally relevant, market-leading platform without a competitive cloud infrastructure. Therefore, it will be necessary to understand how sovereignty can be guaranteed even when non-European infrastructures are used.

At the end of the 2010s, the track record of digital transformation in Germany is hardly encouraging. To date, a lot of plans have been announced, but few have been implemented. Accenture believes six building blocks can be used to jumpstart Germany’s stalled digitization initiatives and keep German companies on course for global market leadership.