The whole economy is affected by digital change. Yet for many companies, and SMEs in particular, the digital transformation is a major challenge. Whether cloud computing, the Internet of Things, Industry 4.0 or Big Data – digitisation is rapidly and radically changing the economy. Sooner or later every company will have to adapt its products and business model. As old markets disappear, new ones emerge. While old cost drivers are eliminated, new investment is needed. And high revenues are not only generated by new physical products like smart- phones, wearables or intelligent machines, but also by virtual products and services.

Ms Hoffmeister-Kraut, you have launched a new Economy 4.0 parallel to Alliance Industry 4.0. What is its purpose?

We aim to ensure that Baden-Württemberg remains Europe’s leading innovation region. Digitisation gives us all means to do it. However, everyone must realise this, down to the smallest business in the region, not just the large companies. Recently launched with partners, our “Initiative Economy 4.0” is designed to support the region’s businesses and employees across all sectors – so also in the trades and service industry – with digitisation and raise the profile of South West Germany as a prime international location for digitised business.
SMEs especially, must be supported more strongly and consistently in embracing and implementing Economy 4.0, so we can secure their standing as a strong economic factor and the region’s major employer in the future.

At the same you commissioned the “Dialog und Perspektive Handwerk 2025 (Trades 2025 Dialogue and Prospects)” survey in which digitisation plays a key role. Can practical measures be derived from it as to what we need to do?

Yes, in relation to digital transformation in the trades, the survey revealed many areas for action. Along with a team of experts, these recommendations were translated into practical possibilities for action, which also take into account existing regional and government programmes.
On the one hand, businesses must be informed and sensitised, a job performed by our digital pilots. And on the other, they need analysis tools to find out how digital they are and in-depth support to draft a concept, then develop and implement a digital strategy in their businesses.

Our planned projects and initiatives address these focuses and therefore include the funding of digital workshops for trying out and demonstrating new digital application options in the trades, the model transfer of “digital innovation paths” to vocational training centres and the establishment of a model “Learning factory 4.0 for the trades”.

Where do the trades stand compared to other federal states and countries in the area of digitisation?

According to a 2017 survey by the German Confederation of Skilled Crafts, one in five business proprietors regards digitisation as an opportunity with a high relevance for their own field of business, and only one in twenty sees it as a risk. There are also digital pioneers among the trades, who have long ad- dressed and are well up on the subject. Equally though, there are digital latecomers, especially in smaller businesses. And in the mid eld are businesses which are basically receptive to the idea and are already active, but so far have failed to pursue the subject consistently enough. The differences very much de- pend on the respective trade, and their need for support varies accordingly. Generally speaking, our support focuses on restructuring business processes, using IT-aided solutions in production processes and developing new digital business models.

According to a survey by management consulting firm Roland Berger, SMEs in particular are still lagging be- hind in the country. Is this also your opinion, and how can politicians help?

We see the subject of “economic digitisation” generally and not only in terms of “Industry 4.0”, but also of “Economy 4.0”. This is why besides industry, we also focus on the trades, the hotel and catering and service industries. Our approach towards this is the “Initiative Economy 4.0”, which I have already mentioned. It focuses on precisely these SMEs.
In the initiative we are trying out a digitisation bonus designed to support businesses across all sectors with practical steps towards digitisation. We will also be initiating regional digital hubs to increase our efforts to establish digitisation extensively throughout the region.

A prime motor of digitisation is broadband expansion. What is going on in this area? Do all regions have access to faster internet – and rural areas in particular?

Industry 4.0 or autonomous driving would be unthinkable without high performance data networks. And to do it, we need to massively expand the broadband infrastructure. In Baden-Württemberg, 77.3 per cent of households already enjoy broadband access with speeds of at least 50 Mbit/s and 93.3 per cent of household a LTE mobile network. These figures place Baden-Württemberg in the top group of area states in Germany.
Baden-Württemberg will be investing well over EUR 100 million in broadband funding again in 2017.

How much money is the state government and Ministry of Economic Affairs earmarking for the digital upgrade?

The EUR 100 million of state funding for broadband coverage will be flanked by around EUR 125 million from the Ministry of Economic Affairs to push ahead with digitising the region’s economy. This includes funding projects in our new “Initiative Economy 4.0”, and also sectorspecific measures like the application centre 4.0 or supporting companies with crosscutting issues like IT security and Work 4.0.

So the State of Baden-Württemberg and its economy are well-prepared for digital change in your opinion?

In Baden-Württemberg we are very well positioned and can therefore address the digital transformation confidently and optimistically in my opinion. A lot of things are already underway here. Our “Initiative Economy 4.0” is now aimed at going into top gear to boost Baden-Württemberg’s progress in the digital age.
So we have agreed on a “Roadmap Economy 4.0” with ten fields of action, which we aim to tackle jointly with our initiative partners. Digitisation can only work in close cooperation with all relevant regional stakeholders. And we are now well on way to doing so with our dynamic approach.

wm.baden-wuerttemberg.de