Strategy consultancy Roland Berger estimates that if European manufacturing industry misses out on the digital transformation, it could forfeit as much as €605 billion in potential added value by 2025.

The Digital Transformation of European Industry: a €1.25 Trillion Opportunity

If European industry does not succeed in taking advantage of the opportunities held out by digital transformation, the 17 countries* investigated by strategic consultants Roland Berger could be losing out on €605 billion worth of value-added by the year 2025.

Conversely, if they succeed in making the necessary transformation, those countries could see their manufacturing industry create a total of €1.25 trillion worth of added value over the next ten years, say the Roland Berger experts.  

The term ‘industry’ is used to comprise a variety of different sectors for some of which – e.g. the automotive and logistics sectors – the use of digital tools is going to have a serious impact, with smaller impact in electrical and plant engineering, down to such sectors as chemicals and aerospace, where the digital impact is likely to be less important.   

Transformation digitale de l'industrie

     If Europe misses out on the digital transformation, it could forfeit €605 billion in lost value added

The Roland Berger report indicates that the digital transformation in European industry across the board is coming in three waves. In the first wave we find automobile manufacturers and logistics companies, which are now ‘reaching a watershed’. These industries are already well into the process of digital transformation, concrete examples being the autonomous vehicles and connected vehicles on display at the latest Consumer Electronic Show (CES) in Las Vegas. Nevertheless these two sectors still have some way to go in some areas, as witness the remaining need to optimise delivery systems.

Meanwhile a “digital upheaval” is underway in sectors such as medical technology (a major challenge being to ensure that the patient data collected is anonymised), electrical engineering (mainly as a supplier for the Internet of Things), mechanical and plant engineering (Industry 4.0 and the manufacturing plant of the future) and energy systems (distributed power generation and smart grids). For these categories of industry, innovation is essentially a ‘bottom-up’ process – emanating from the need for innovation among the products which they help to manufacture or the customers they serve.

The slowest wave of digital transformation is lapping over the chemicals industry and aerospace. For the latter of these two, it is security issues and problems around potential cyber-criminality that are putting the brakes on the digitisation process.

Potential added value engendered by the digital transformation, by industry category

The keys to success in the digital transformation

The Roland Berger report reveals that 43% of the top managers in German industry polled for the survey see cost-cutting as the most important benefit of the digital transformation, ahead of increased product sales, whether new-generation or existing. The Roland Berger analysts asked the respondents to stick their necks out and assess their own company’s digital maturity. The report underlines the fact that in the ‘big picture’ changes being brought about by digital transformation  go far beyond narrow manufacturing needs and act as a catalyst for new opportunities that are sure to have a far-reaching impact on the current industry business models.

The report also points to an area of best practice: knowledge sharing between different types of players along the lines of what the German Nationale Plattform Elektromobilität (NEP) – which brings together officials from the Ministries for the Economy and Industry, specialist research institutions, automobile manufacturers and technology providers, plus the trade unions – is doing.  Since the NEP was set up in 2010, these various partners have been working together to make Germany a world leader among electro-mobility product suppliers.

If the digital transformation of industry across the board is to be a success, it will be vital to create European-scale synergies of this kind, says Roland Berger. The Juncker Plan, which is providing an envelope of €315 billion for the purpose of financing strategic investments designed to re-launch German growth is another initiative worth emulating, argue the report’s authors.

*EU Member States Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the UK, plus non-Member States Norway and Turkey.  EU Member States not on the list were excluded due to a lack of available data on their industries.


By Pauline Canteneur