The Utility of “Industry 4.0” for Economic Development and Industrial Structure Change in Germany

Abstract

Germany’s “Industry 4.0” strategy is a technological revolution that accelerates full penetration into industrial fields such as manufacturing, mainly based on the Internet of Things and the rapidly developing new generation of Internet technology as a carrier. This paper examines the implementation of Germany’s “Industry 4.0” strategy, focusing on R&D expenditures, capacity utilization rates, and CNC rates of key processes in the manufacturing industry. It also lays the groundwork for Germany’s economic development and the effects of industrial restructuring. We construct a regression model to analyze the impact of “Industry 4.0” on the German economy, using economic growth as a measure of economic development. We use the automobile industry as a representative to study the industrial restructuring and upgrading of Germany under the “Industry 4.0” strategy. The results demonstrate a positive correlation between the estimated coefficients of economic growth variables in each year from 2020 to 2022 and the industry’s value-added, passing the significance test at the 0.05 level. In the industrial restructuring, Germany’s automobile industry has realized the transformation from traditional manufacturing mode to intelligent manufacturing mode, and the 1387.2 billion euros of Volkswagen’s R&D investment also shows that Germany is still pursuing the technological upgrading of the industry.

Keywords

• regression model
• economic development
• industrial structure upgrading
• “industry 4.0”
• 91g50