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Adriana Neligan / Edgar Schmitz IW-Report No. 3 6. February 2017 Digital strategies for greater material efficiency in German industry

This study delivers the first empirical findings on the relevance of digitisation to improving material efficiency based on the German company survey ‘IW-Zukunftspanel’.

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Digital strategies for greater material efficiency in German industry
Adriana Neligan / Edgar Schmitz IW-Report No. 3 6. February 2017

Digital strategies for greater material efficiency in German industry

IW Report

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German Economic Institute (IW) German Economic Institute (IW)

This study delivers the first empirical findings on the relevance of digitisation to improving material efficiency based on the German company survey ‘IW-Zukunftspanel’.

Traditional efficiency-raising measures that optimise manufacturing processes are still predominant in the manufacturing sector, but new techniques and materials are also used. In many companies the basic course for a modern circular economy is not yet set: saving materials on a grand scale as early as the product design stage, through materials cycle management or new business models are not very common so far. The material savings potential in industry has not yet been exhausted. In the companies’ view, they could save a further 3 to 4 per cent if they made optimum use of all technical possibilities. With reference to the value of Germany’s purchases of mineral raw materials from both domestic and foreign sources, this translates into a realisable savings potential of 2 billion euros.

German manufacturing firms have up to now only rarely digitised material efficiency measures to a great extent. If they are - particularly in large companies - they tend to be used for process optimisation. Around two fifths of the companies are at least moderately digitised in relation to the most important industrial efficiency measures, namely process optimisation and the use of new techniques, but there is still more than a third that is not at all. Companies have most frequently digitised cross-company materials cycles, but this instrument is only applied by two fifths of industrial companies.

There is still potential for more digitisation of measures relating to product design, materials cycle management and new business models. At least every second manufacturing company reuses residue and waste materials via internal circulation systems. Nevertheless, for two fifths of these companies digital networks do not play any part and in the case of a further two fifths, the part they play is minor. Only one in ten companies is heavily digitised. More than half of industrial companies use resource-saving measures that begin at the product design stage. To date, almost half of these companies are not digitally networked, or if they are, it is only to a small extent. One third of the industrial companies up to now have considered new business models as an efficiency-raising way. Of these, three out of ten have not been digitised yet with a further two fifths having only a minor level of digitisation. Companies that have already embedded digitisation in their strategy are frontrunners for greater material efficiency, since they more frequently use material efficiency measures intensively, are more likely to recognise further potential savings and their efficiency-saving approaches are also clearly more often highly digitised.

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Digital strategies for greater material efficiency in German industry
Adriana Neligan / Edgar Schmitz IW-Report No. 3 6. February 2017

Adriana Neligan: Digital strategies for greater material efficiency in German industry

IW Report

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German Economic Institute (IW) German Economic Institute (IW)

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Do Differences in Data Management Help to Explain Persistent Productivity Differences Between Western and Eastern Germany?
Jan Büchel / Klaus-Heiner Röhl IW-Trends No. 4 28. December 2022

Do Differences in Data Management Help to Explain Persistent Productivity Differences Between Western and Eastern Germany?

Since the mid-1990s the economies of the five states of ex-communist Eastern Germany have been converging only slowly with the rest of the Republic, though the process has not come to a complete halt.

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Jan Büchel / Barbara Engels Expertise 14. December 2022

Digitalisation Index 2022: Digitalisation of the Economy in Germany

The economy in Germany becomes only slightly more digital in 2022 compared to 2021: The Digitalisation Index rises from 107.9 to 108.9 points. Following the sharp rise in 2021, digitalisation can be said to stagnate in 2022.

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