September, 2019


www.us- tech.com The Economic Impact of


Digitalization on Electronics Manufacturing


D


igital production has been widely adopted by the automo- tive industry and companies


By Fram Akiki, Vice President — Electronics and Semiconductor Industry, Siemens PLM Software All these applications have a


as diverse as machine tooling and printing. However, these companies are often large, enterprise-based operations with worldwide offices and production sites. Small- and mid-sized companies have been slow- er to embrace digitalization, though access to such technologies is now becoming mainstream. According to a study commis-


sioned by KfW Group, a Frankfurt- based financial institution, four out of five small- to mid-sized companies have invested in digital projects in Germany over the past few years. “Small and medium enterprises


(SMEs) are still a long way from fully exhausting the potential of digitali- zation,” says Dr. Jörg Zeuner, chief economist of KfW Group. Less than a


...more than 50 percent of


German companies already use cloud solutions. Cloud solutions are used in industrial settings for predictive maintenance,


energy data management, or resource optimization.


fifth of German smaller companies have become digital leaders through investments in digital products, serv- ices and apps, or Industry 4.0.” To compete in today’s global


economy, SMEs must invest more heavily in “Industry 4.0” technolo- gies. Such investments can be daunt- ing, because these companies are unsure how the changes will affect their value chains. Other reasons cited for not making investments include a lack of IT skills among staff, and concerns regarding data protection and data security. According to researcher Chris -


tian Schröder, Institute for Small Business Research, from The Fried - rich Ebert Foundation study in Germany, slow internet is one of the most significant hurdles in SME dig- italization adoption. “The greatest shortcoming at present is the lack of comprehensive broadband connec- tions to ensure very fast transfer rates without loss of quality,” he says.


Economics of SME Digitalization


Small- to medium-sized compa-


nies that invest in digitalization account for around two- thirds of total employment in the European Union. In the United States, SMEs provide 55 percent of all jobs and account for 54 percent of all sales in the country. Statistics are similar in other parts of the world. Many indus- trialized countries have launched ini- tiatives to help this sector make the digital transition. A starting point for many com- panies on the digital path is cloud


Suburban Collection Showplace Novi, Michigan Booth 2428 | 10-12 Sep 2019


solutions. According to KPMG and bitkom research, more than 50 per- cent of German companies already report using cloud solutions. Cloud solutions are used in industrial set- tings for predictive maintenance, energy data management, or resource optimization.


proven ability to help manufacturers save money. Even if a company is not yet ready to use enterprise cloud solutions, experts recommend that any new equipment purchased is out- fitted with sensors and internet capability so the equipment can be


connected later. Small- and medium-sized com-


panies that have embraced digitali- zation claim many advantages. In European Commission study, SMEs reported that digitalization technolo- gies fostered entrepreneurship,


Continued on next page


Page 77


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See at The Battery Show, Booth 2428 ,


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