Industry 4.0: The Future of Indo-German Industrial Collaboration

Industry 4.0 can be described as the fourth industrial revolution, a mega- trend that affects every company around the world. It envisions interconnections and collaboration between people, products and machines within and across enterprises. Why does Industry 4.0 make for an excellent platform for industrial collaboration between India and Germany? The answers lie in economic as well as social factors. Both countries have strengths and weakness and strategic collaboration using the principles of Industry 4.0 can help both increase their industrial output, GDP and make optimal use of human resources. As a global heavy weight in manufacturing and machine export, Germany has a leading position in the development and deployment of Industry 4.0 concepts and technology. However, its IT sector, formed by a labor force of 800,000 employees, is not enough. It needs more professionals to reach its full potential. India, on the other hand, is a global leader in IT and business process outsourcing. But its manufacturing industry needs to grow significantly and compete globally. These realities clearly show the need for Industry 4.0-based collaboration between Germany and India. So how does Industry 4.0 work? In a first step, we look at the technical pers- pective – the vertical and horizontal integration of Industry 4.0 principles in enterprises. Vertical integration refers to operations within Smart Factories and horizontal integration to Smart Supply Chains across businesses. In the second step, we look at manufacturing, chemical industry and the IT sector as potential targets for collaboration between the two countries. We use case studies to illustrate the benefits of the deployment of Industry 4.0. Potential collaboration patterns are discussed along different forms of value chains and along companies’ ability to achieve Industry 4.0 status. We analyse the social impact of Industry 4.0 on India and Germany and find that it works very well in the coming years. Germany with its dwindling labor force might be compensated through the automation. This will ensure continued high productivity levels and rise in GDP. India, on the other hand has a burgeoning labor market, with 10 million workers annually entering the job market. Given that the manufacturing sector will be at par with Europe in efficiency and costs by 2023, pressure on India’s labor force will increase even more. Even its robust IT sector will suffer fewer hires because of increased automation. Rapid development of technologies – for the Internet of Things (IoT) or for connectivity like Low-Power WAN – makes skilling and reskilling of the labor force critical for augmenting smart manufacturing. India and Germany have been collaborating at three levels relevant to Industry 4.0 – industry, government and academics. How can these be taken forward? The two countries have a long history of trade. The Indo-German Chamber of Commerce (IGCC) is the largest such chamber in India and the largest German chamber worldwide. VDMA (Verband Deutscher Maschinen- und Anlagenbau, Mechanical Engineering Industry Association), the largest industry association in Europe, maintains offices in India. Indian key players in IT, in turn, have subsidia- ries in Germany and cooperate with German companies in the area of Industry 4.0. Collaboration is also supported on governmental level. As government initiatives go, India has launched the “Make in India” initiative and the “Make in India Mittelstand! (MIIM)” programme as a part of it. The Indian Government is also supporting “smart manufacturing” initiatives in a major way. Centers of Excellence driven by the industry and academic bodies are being set up. Germany and India have a long tradition of research collaboration as well. Germany is the second scientific collaborator of India and Indian students form the third largest group of foreign students in Germany. German institutions like the German Academic Exchange Service (DAAD) or the German House for Research and Innovation (DWIH) are working to strengthen ties between the scientific communities of the two countries, and between their academia and industry. What prevents Industry 4.0 from becoming a more widely used technology? Recent surveys in Germany and India show that awareness about Industry 4.0 is still low, especially among small and medium manufacturing enterprises. IT companies, on the other hand, are better prepared. There is a broad demand for support, regarding customtailored solutions, information on case studies and the willingness to participate in Industry 4.0 pilot projects and to engage in its platform and networking activities. We also found similar responses at workshops conducted with Industry 4.0 stakehold- ers in June 2017 in Bangalore and Pune and in an online survey. What can be done to change this? Both countries should strengthen their efforts to create awareness for Industry 4.0, especially among small and medium enterprises. Germany should also put more emphasis on making their Industry 4.0 technology known to the Indian market. India’s IT giants, on the other hand, should make their Industry 4.0 offers more visible to the German market. The governments should support the establishing of joint Industry 4.0 collaboration platforms, centers of excellence and incubators to ease the dissemination of knowledge and technology. On academic level, joint research programs and exchange programs should be set up to foster the skilling of labor force in the deployment of Industry 4.0 methods and technologies

Catalyzing Capital for Invention: Spotlight on India

The Lemelson Foundation has observed first hand a number of obstacles limiting the impact of India's scientists, engineers, and inventors. The resources these entrepreneurs need, such as financing and mentorship, are limited and often difficult to identify. As a result, many of the invention-based ventures The Lemelson Foundation supports struggle to identify sources of funding and business assistance to suit their unique needs.To understand the scale of these challenges and how to meaningfully address them, the Foundation, with assistance from Enclude, undertook a field study to examine India's "impact ecosystem," which is what the Foundation calls the broad network of businesses, funders, and intermediaries that enable social enterprise. The study hones in on the "invention ecosystem," the Foundation's term for a subset of the impact ecosystem that includes "invention-based entrepreneurs."Detailed observations and data collected from interviews with more than 60 investors, entrepreneurs and intermediaries are presented in this report, along with actionable solutions for addressing challenges. While the study focused on India, lessons are applicable to evolving ecosystems in other developing countries

Fostering Efficiency in Information Systems Support for Product-Service Systems in the Manufacturing Industry

The ongoing shift towards stronger service orientation is leading to a rising number of industrial services offered in the manufacturing industry. In the attempt to fulfill ever-increasing service demands while at the same time reducing operating costs, manufacturing firms search for appropriate information technology (IT) solution for planning and execution. The industry has not yet reached a common understanding of product-service systems and the corresponding processes and IT systems. In order to holistically support such broad design and transformation tasks, we develop a maturity model capturing the key requirements for the information systems (IS) support of product-service systems based on a multiple case study. For a critical reflection on the extant literature, we compared those requirements with scientifically recognized maturity models and standard specifications. Being an integral part of the design science research approach, the model evaluation is organized in accordance with approved evaluation perspectives

Rural non-farm development in China and India

The dynamic rural nonfarm sector in China has been a major contributor to the country's remarkable growth, while in India the growth in output and employment in this sector has been rather stagnant. The paper argues that the observed patterns in the rural nonfarm development are the results of institutional differences between the two countries, especially in their political systems, ownership structure, and credit institutions. A review of the strengths and weaknesses of the rural nonfarm economy in China and India highlights the potentials and challenges of growth in the sector.Industrial policy ,Policy research ,Non-farm development ,

Korea's Fading Economic Miracle 1990-97

By the late 1980s Korea's interventionist and export-oriented development model had contributed to a number of serious structural weaknesses in the economy. Ongoing government involvement in the banking and corporate sectors, weak prudential supervision of financial institutions, and restricted financial market and corporate competition created moral hazard, as banks and corporates believed they would not be held accountable for their actions due to their close relationship with government. This resulted in financial sector risk mismanagement and highly leveraged growth of the chaebols. After 1988, when the new democratically elected civilian administration removed long-standing restrictions on union activity, rapid wage growth, in excess of productivity gains, eroded profitability. These structural weaknesses, and policy errors and mismanagement, made Korea increasingly vulnerable to external shocks during the 1990s. In mid 1995, a rapid depreciation of the Japanese yen and a world semi-conductor glut and price fall provided the trigger for a rapid slowdown in exports and industrial output, and an unprecedented wave of chaebol bankruptcies that undermined the solvency of financial institutions. Korea's long period of sustained economic growth, low inflation, strong investment and balanced budgets had lulled policy makers into complacency. They failed to act decisively to tackle the growing structural weaknesses. Korea's high exposure to short term foreign debt and loss of foreign exchange reserves through a vain and unsustainable attempt to defend the won further undermined foreign investor and creditor confidence. This paper discusses in some detail these developments and their contribution to the financial and economic crisis experienced by the country during 1997-98. It also identifies key lessons for countries contemplating similar rapid development, and key warning signs that need to be heeded to avoid similar happenings to that which occurred in Korea.South Korea, export-oriented development model, structural weaknesses, financial and economic crisis

Technological Capability Building in South Korea: Some Lessons for Pakistan

Recent economic upheavals raise important questions about the nature of the transformation that has taken place in the East Asian economics. Are these economics really catching up with the West? Is there growth process sustainable? Or will they suffer the type of systemic disintegration experienced by the East European countries during the 1990s—Paul Krugman (1994) and Young (1994) had demonstrated similarities in the East Asian and East European growth paths some time ago. Technological upgrading is an important element in the development of a sustainable growth strategy. This paper seeks to describe policies and initiatives taken by the South Korean government to stimulate technological learning during 1960–1990—the decades during which the South Korean economy achieved a “miraculous” transformation. The description relics mainly on Korean sources and is based on our own field research in that country. Section one describes the technological learning processes and Section Two presents a discussion of the policies that facilitated this learning. Section Three briefly addresses the question: Did this type of technological learning make a contribution towards enhancing the sustainability of Korean development processes? The concluding section briefly reflects on the lessons that seem relevant for Pakistan.

CPPS-3D: a methodology to support cyber physical production systems design, development and deployment

Master’s dissertation in Production EngineeringCyber-Physical Production Systems are widely recognized as the key to unlock the full potential benefits of the Industry 4.0 paradigm. Cyber-Physical Production Systems Design, Development and Deployment methodology is a systematic approach in assessing necessities, identifying gaps and then designing, developing and deploying solutions to fill such gaps. It aims to support and drive enterprise’s evolution to the new working environment promoted by the availability of Industry 4.0 paradigms and technologies while challenged by the need to increment a continuous improvement culture. The proposed methodology considers the different dimensions within enterprises related with their levels of organization, competencies and technology. It is a two-phased sequentially-stepped process to enable discussion, reflection/reasoning, decision-making and action-taking towards evolution. The first phase assesses an enterprise across its Organizational, Technological and Human dimensions. The second phase establishes sequential tasks to successfully deploy solutions. Is was applied to a production section at a Portuguese enterprise with the development of a new visual management system to enable shop floor management. This development is presented as an example of Industry 4.0 technology and it promotes a faster decision-making, better production management, improved data availability as well as fosters more dynamic workplaces with enhanced reactivity to problems

India's Outward Foreign Direct Investments in Steel Industry in a Chinese Comparative Perspective

Indian and Chinese enterprises have emerged as important outward investors in recent times with their involvement in a number of prominent Greenfield investments and acquisitions. The theory of international business posits that the ownership of some unique advantages having a revenue generating potential abroad combined with the presence of internalization and locational advantages leads to outward FDI. Conventional MNEs based in the industrialized countries have grown on the strength of ownership advantages derived from innovatory activity that is largely concentrated in these countries. It examines the case of steel industry that has become an important sector of overseas activity for Chinese and Indian companies with a string of major acquisitions of foreign MNEs for acquiring footprints and natural resources in order to identify the sources of ownership advantages and strategies of outward investments from emerging countries.FDI outflows, steel, India

Outward FDI and Knowledge Flows: A Study of the Indian Automotive Sector

In recent years developing countries have emerged as significant participants in the OFDI (outward foreign direct investment) activities having the strategic asset seeking motive. Such OFDI which is assets exploiting cum augmenting involves potential two way cross border knowledge flows. This study examines these issues for the Indian automotive industry that is currently transnationalizing at a rapid rate in terms of both exports and OFDI. The study traces the technological capability building and several dimensions of OFDI in this industry. The case studies of two major automotive Groups highlight their competence building, and knowledge seeking operations. This study undertakes a quantitative analysis of the influence of OFDI activities on the in‐house (domestic) R&D performance of Indian automotive firms during 1988–2008. As expected, the favourable impacts on R&D intensity appear to be stronger for developed vs. developing host nations, and for joint venture vs. wholly‐owned ownership OFDI. The study concludes with suggestions to promote particularly the strategic asset enhancing OFDI.OFDI; Strategic Assets‐seeking FDI; R&D; Automotive Industry

THE INTERNATIONALIZATION PROCESS AND THE ASSET-LIGHT APPROACH

Today, regarding all industries, nothing is meant to last forever. If we look at industry trends in terms of corporate strategy, we clearly notice that most major companies are gearing toward an asset-light approach to remain competitive. The internationalization process has determined companies worldwide to find solutions to minimize transaction costs and the expansions costs on foreign markets.In the maturity stage of the internationalization process, many companies from various business sectors, have chosen the ” asset light” approach, a business model focusing on minimizing “in-house” resources and maximizing usage of outsourcing opportunities.internationalization, asset-light approach