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Industry 4.0: India Has Everything To Be Successful

Germany-based global engineering major Siemens AG, with revenues in excess of 83 billion Euro, has regrouped its industry verticals into three operating companies - Gas & Power, Digital Industries and Smart Infrastructure
twitter-logo PB Jayakumar   New Delhi     Print Edition: July 28, 2019
Industry 4.0: India Has Everything To Be Successful
Cedrik Neike, Member of the Managing Board of Siemens AG and CEO of Smart Infrastructure

Siemens is reinventing itself to face future challenges. What are the changes we are witnessing?

If you look at our past, we were a conglomerate in different areas. We want to be more focussed on key markets and be some sort of a king in those markets. Take renewable energy, for which we created Siemens-Gamesa. We want to be on top in the health care market and that's why we have listed the health care business. In mobility, we have a fantastic asset at the moment. We are looking for capabilities. Internally, we are focussed on tapping opportunities in fossil-based energy. Digital industries are all about making processes in manufacturing as efficient as possible. I am handling smart infrastructure, a happening segment. For example, if we look around, power grids have become more decentralised, decarbonised and digital. Buildings account for 40 per cent of all energy that we consume. So, there is a big connection between grids and buildings, and that is where a big shift is happening. Energy used to be centrally distributed and undigitalised. Now, you have smart grids to recharging of batteries, and all these elements need to be integrated to create smart building infrastructure.

The world of conventional manufacturing is changing. For example, Siemens has done numerous acquisitions in the past 10 years in technology and IT. How is the new world evolving?

Industries have to become more agile and flexible. If you want a specific shoe or a jeans or a sweater built for you, it is now possible. It is not about mass production. It is about making as efficiently as possible through technologies such as digital twin, in which the product is tested virtually and then put into production. It is changing industries, the way you make your food and beverage, cars, batteries, and so on. It is the smart idea of combining the digital twins of software and hardware and making it much more flexible which opens up opportunities you never had before. You can make T-shirts out of corn and build super-flexible packaging machines that are much more compact. If an industry wants to become much more efficient, it has to become much more flexible. For that to happen, you have to package your hardware and software together really smart.

Historically, the global economy has been dependent on manufacturing, mainly from America, Europe and China. How is this technological disruption going to change the global manufacturing space and what will be its impact on countries like India or China?

In every technology shift, there is redistribution. Labour is not good enough to be competitive in this world. You need to start building capabilities which enable your workforce to be a part of this industry shift. This is a chance for each country depending on how fast it is able to move, adapt and act. You need the right investment, the right talent. That is extremely important because changes are so fast and require the right digital expertise. If you have those three, you have a chance to be competitive. This is one area why I am a big fan of India. India has everything to be successful. Now it needs to prove and move in this direction. We are working with a lot of Indian companies. The interest is there. Either you participate in the game or be ready to be a spectator.

Which are those game-changing countries?

I believe Germany is doing extremely well just because we have very little workforce and we have to reinvent constantly to remain competitive. However, Germany knows we are not going to produce for the rest of the world. We are looking for technology partners. If you look at others, then I have to say Korea, China and Japan. Then there are countries like Vietnam. India is at the heart of digitalisation for Siemens. A lot of software R&D is based in India. It has everything to be successful and needs to go forward and act. Capital, people and regulations - they all need to be aligned. You have people with ability, but they need to be trained to understand not only the digital part but also the manufacturing part.

You can make in India as it is one of the countries with the most competitive manufacturing environment. If you can build something at the right cost, you can also export. Already, quite a few factories are exporting from India worldwide. The big difference is that you have a lot of young and talented great people. What is required is the right infrastructure, like access to good, renewable and clean electricity, and right mobility and logistics infrastructure. When it has the two, India can create a fantastic market. 4G is an example, and see how India has done in the last couple of years amid a hyper-competitive telecom environment.

You had a big role to play in that as part of your earlier professional assignment. How was that experience?

I have a personal history in it as part of my former role (Cisco) and was lucky to be a part of the Reliance Jio rollout. It was fantastic the way 4G network was thought of from scratch, changing the country's telecom market.

Now, lots of tech-based companies like Alibaba, Google and Microsoft are entering areas of your competency. What will happen in future?

There are B2B companies and B2C companies and we are definitely a B2B company. Our aim is to be successful in any business - energy producing business, food and beverage business, mining business. We want to be effective as possible in those businesses. We are working with Alibaba, Microsoft and we are also working with big cloud partners. We have partnered with Volkswagen. We believe in collaborations.

In the past, we have seen many game-changing companies coming up. For any manufacturing or services business, what could be the right direction to take? Should they combine all the technology or should they stay rooted to their competencies and build up on that? How should the future be, especially the jobs available?

There is no one answer for all the businesses. Right now, we are talking about digitalisation, connecting, collecting data and getting wisdom out of it. So, my take is, you have to rethink what you are doing in the world. Digitalisation gives you absolute information capability to understand what's going on. If you have it, you are ahead of the pack and if you don't, it will be very difficult to compete.

Ten years ago, there were no app developers, there were no Uber drivers. There are a lot of jobs today that didn't exist then. I cannot tell my kids what kind of jobs they will have in 30 years from now because the jobs will definitely change. What is important is that you build a system that enables continuous learning. Siemens spends heavily on its workforce, completely making them adaptable. I often joke that Siemens is the oldest German start-up created 170 years ago by an entrepreneur in a backyard because then we did not have garages and cars! Apart from the huge investments we are making for the change, we are also working with small and medium companies, with universities and start-ups.

@pb_pbjayan

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