Daniel Buhr on Social Innovation Policy and Industry 4.0

Event: Sustainable Growth Model

Daniel Buhr, Professor for Policy Analysis and Political Economics at Eberhard-Karls-Universität Tübingen in Germany, visited Shanghai and gave several presentations at academic and government institutions on a socially-sustainable innovation policy and Industrie 4.0 and exchanged opinions with Chinese experts and seminar participants.

Group picture after a round-table discussion at Tongji University
Group picture after a round-table discussion at Tongji University.

Over the past few years, representatives from industry and governments have been extolling the virtues of an IT-driven overhaul of industrial production, exemplified by concepts such as Industrie 4.0 and Industrial Internet. In these visions, information technology and manufacturing undergo deep integration via large-scale digitisation and networking of workflows, thereby reshaping the relationships between manufacturers, customers and suppliers. Due to the potentially enormous gains in efficiency and flexibility as well as new business models and opportunities, interest in the topic has exploded all over the world, particularly in Germany (where the term Industrie 4.0 originated), the United States and China.

Prof Daniel Buhr is the author of a recent FES study on how to foster innovation in this area as well as on the implications of these concepts for labour markets and society in general ("Social Innovation Policy for Industry 4.0" see below). During a July visit to Shanghai, he gave a series of lectures on this topic. Over the course of two days, Buhr presented a summary of his findings at Tongji University, the Shanghai municipal government’s Counselors’ Office (a scientific advisory body) and the Shanghai Services Federation (an association of local businesses). Among other aspects, he assessed both opportunities and risks inherent to the large-scale automation and digitisation of labour. An increase in networked machines and human-machine interaction might lead to a stronger demand for highly-skilled workers and could lead to many employees with only basic qualifications being laid off, Buhr explained. But machines with appropriately-designed user interfaces might just as well also assist employees in complex decision-making procedures, so that even low and medium-skilled workers could work productively. He warned however, that the current debate of these developments was overly technology-focussed and urged that the social aspects of innovation should be taken much more into consideration. In his view, the challenges arising from the trends of automation and digitisation had to be tackled by society as a whole.

In China, even as large manufacturers are pushing for a more robot-driven and automated mode of production, mass unemployment is a particularly dire scenario, due to the lacking social safety net. Accordingly, participants paid very close attention to Prof Buhr’s talk and asked many detailed questions afterwards. At Tongji University, Prof Chen Ming of the Chinese-German University of Applied Sciences (CDHAW) complemented Prof Buhr’s lecture with a presentation on China’s own strategy for bringing together manufacturing and IT: Under the Made-in-China 2025 strategy, China wants to overhaul its heterogeneous manufacturing sector over the next ten years and hopes to achieve a world-class level by 2045. While both strategies shared the integration of IT and manufacturing, Made in China 2025 was much more influenced by state actors, in contrast to the German concept of Industrie 4.0, which was (at least originally) very much driven by the industry itself, Prof Chen explained. He added that the hardware aspect was still dominating in China and that the necessary training (and re-training) of workers did not have a very high priority among the government, yet.

The many participants at all three events and the lively Q&A highlighted the considerable interest in the topic in China. During the debates, both opportunities and risks were discussed as well as mitigation strategies and best practices. Overall, while in Germany the debate on the social aspects of Industrie 4.0 as the next step in the country’s industrial evolution has already started, technological aspects still dominate the discussion in China.

Download of the study "Social Innovation Policy for Industry 4.0" by Prof Daniel Buhr

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