High Stakes, tremendous opportunity

Tremendous opportunity is the silver lining of a high stakes environment, and today there is none greater facing industry than digital disruption. In this first study of its kind, we have scrutinized the implications of the digital transformation on the European marketplace. Our extensive analysis reached into the industrial heart of Germany and Europe, finding ways for the first time to measure the overall effect of digitization on the German and European economy. Our findings reveal 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 will add up to 605 billion euros by 2025—equivalent to the loss of well over 10% of the continent's industrial base. However, 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. Concerted action must be taken in terms of digital maturity, common standards, powerful infrastructure, and pan-European coordination to turn these changes into fresh growth, prosperity for large parts of the population, and a source of greater resource productivity.

This will mean giving weight to the relevant issues, harmonizing the regulatory framework, and engaging both companies and governments in their global definition. With timely, well-targeted efforts, Europe can adapt to the new conditions of industry and prevail in the digital economy.

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