Digitization German experiences in the field of SMEs

Digitization German experiences in the field of SMEs Oliver Steinke, Deputy Head of Department; Organization for the Economic Development of Skilled Trades SMEs in North Rine. Westfalia (LGH) 1

Agenda I. German SMEs and digitization current status, challenges & solutions II. Support for SMEs by government & skilled trades organizations 2

I. German SMEs and digitization – current status Acceptance and current status of SMEs regarding Digitization 56% Digitization is a massive challenge for our company 29% Digitization is A threat to our existence We have difficulties dealing with digitization 23% Source: Bitkom Research; 2017 3

I. German SMEs and digitization – current status Acceptance and current status of SMEs regarding Digitization 81% We are generally open-minded about digitization 71% we are latecomers Source: Bitkom Research; 2017 21% we are early adopters 4

I. German SMEs and digitization – current status Digitization… 69% …is an opportunity 21% 9% …is a risk Source: Bitkom Research; 2017 …has no effects 5

I. German SMEs and digitization – current status Use of digital technology in SMEs 81% Source: Bitkom Research; 2017 6

I. German SMEs and digitization – current status What are the major barriers in the companies point of view? 81% Source: Bitkom Research; 2017 7

I. German SMEs and digitization – challenges & solutions Challenge: Costumer wants his fascade to be painted but doesn‘ t want to wait three days for an offer by the painter company… Solution: Painter uses smart mobile app for digital measurement and high potential ERP-software to calculate the costs. Makes an offer within 15 minutes! OFFER 8

I. German SMEs and digitization – challenges & solutions Challenge: A beer brewer rents his barrels to customers - but often has issues to get them back which leads to loss of time and money… Solution: The brewer equipped his barrels with an RFID/GPS chip which contains information about e. g. customer, rent duration and current localation of the barrel. Nearly all of his barrels come back in time! 9

I. German SMEs and digitization – challenges & solutions Challenge: If an elevator mechanically breaks down, it‘s often an emergency case and it‘s much more expensive to repair than to maintain in advance. Solution: Smart surveillance and diagnostic software checks data in real time and is able to predict and therefore prevent a potential mechanical break down two days in advance! 10

II. Support for SMEs areas of intervention 11

II. Support for SMEs Examples on National level („Digital Strategy 2025“): 20 centres of excellence – one dedicated to skilled trades four SME 4. 0 agencies Projects like „go-digital“ (financing for external advisory) Full coverage with high-speed Internet (glass fibre) until 2025 Examples on Federal State level (NRW): Parliamentary study-commission “future of SMEs” identified 21 recommendations in the fields of digitization that are currently in the state of planning or implementation NRW centre of excellence for skilled trades 12

Final thoughts on digitization Digitization affects all of us - not just in business but also in private Digitization is not a single task - it‘s a continuous process 81% Digitization is not an end in itself 13

Thank you! 14