European Perspectives What is the future of industry?

Author / Editor: Roman Dvorak, Editor-in-Chief, Publisher, MM Industrial Spectrum, Czech Republic / Susanne Hertenberger

Czech Republic - Industrial production is changing its structure on a global scale. Europe is losing its standing and on the other hand, developing countries are increasingly playing a leading role.

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In 1991, the production in developing countries represented 21% of the volume of €3,451 bn. Twenty years later, 40% of the volume of €6,577 bn. comes from developing countries.
In 1991, the production in developing countries represented 21% of the volume of €3,451 bn. Twenty years later, 40% of the volume of €6,577 bn. comes from developing countries.
(Source: Roland Berger, consultancy agency, study)

During the last twenty years, the structure of industrial production has been changing radically. However, European countries are little by little losing their standing. Attention is focused on the emerging economies of China and Brazil that are gaining a continuously growing share of the market. Statistics of new and lost jobs in industrial spheres in individual European countries serve as a proof of the above statement. On the contrary, in China and Brazil, the increase of jobs available in the industry during the last twenty years are 39% and 23% respectively. However, in advanced European industrial countries, a long-time decline can be observed; France, with 20%, Great Britain, 29% and even the industrially strong country, Germany, experienced an 8% decline.

Automation will not save us

The reason that reduction of the number of jobs can be replaced by automation and that the reduction of employment will not cause a loss in the standing of the production of industrial products is a step in the wrong direction. Data on the added value of industry clearly show that the share of the market of emerging economies in the monitored period from the beginning of the nineties of the last century has doubled and on the contrary, the share of Western Europe has reduced from one third to one quarter.

What is the solution? Basically, a very simple one - to perform. Something that we are still able to compared with the developing world. That is namely, to fully apply new technologies that have a potential to reduce costs and make production more efficient. Firms that can in time integrate new technologies in their production process will have an appropriate advantage. The success is concealed in details that play a key role above all in the relations to the customer. For example, the 3D-printing technology presents the creation of customised products in a short time with zero additional costs compared to the change of a batch-produced component. Flexibility of production and reduction of fixed costs are also necessary.

The producer must know the requirements of his customers in detail. To them he must adapt his firm, its production process and offers.

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