But behind the hype and headlines, a powerful transition is taking place. The digital revolution is changing our lives, informing how we build cities, travel and communicate. It’s also shifting the way we do business, creating new models and making existing ones obsolete. The capture, analysis and use of data is changing our world, quickly.
In our industrial world the digital revolution is in full swing. Automation is meeting digitalisation, devices are being connected and gaining the ability to store, share and analyse data to drive value. The way we design, test and manufacture is happening in the virtual world, but the results are very much real-world: Today you can walk into a Maserati showroom and buy a car that was brought to market 30 per cent faster using our own digital enterprise. This is the future of manufacturing.
For the Middle East, which continues to build increasingly diverse economies, industrialisation presents great opportunity. Globally, almost 80 per cent of financing for research and development is spent on the manufacturing sector, which also accounts for 70 per cent of trade. We can’t ignore these statistics. Nations with established industrial sectors are stronger, more resilient, highly skilled and better equipped to deal with economic volatility. Our future is industrialisation.
Being a relatively new player in global manufacturing and engineering has its advantages. The Middle East can swiftly embrace and implement new technologies and build expertise at a pace other regions may struggle to match. Digitalisation technologies are a differentiator, and we believe the Middle East has the potential to use them to leapfrog the third industrial revolution, becoming a world leader in Industry 4.0, or the Industrial Internet of Things.
Digital technologies such as 3D printing will enable the region to position itself with high-quality, medium cost, flexible manufacturing. We no longer need expensive machinery, tooling and time-consuming lifecycle management, or the space they take up. Software can build a virtual representation of the entire value chain for digital design, testing and production. We can make changes at any stage, and instantly see the effects. The days of the physical prototype are numbered; it can be done better and faster in the virtual world. This is the future of manufacturing in the Middle East.
At Siemens we have a tool for this – MindSphere is an open, cloud-based operating system for the Internet of Things, able to connect devices for the capture and analysis of data. We can use this intelligence to shorten development time, build higher-quality products and allow the flexibility to adapt to swiftly changing market requirements. Digital technologies like MindSphere will give local companies – and therefore countries – a competitive advantage on the world stage.
Fortunately, governments in the Middle East are already advanced in digital strategy and motivated towards industrialisation. We already see increased focus on supporting the regulation required to build a stronger, more sustainable sector and there will need to be more done to further define investment strategies. Research and development is also a key factor, and I can’t emphasise enough the importance of partnerships to drive this.
Identifying relevant global players and building platforms to localise technology and expertise is crucial to sustainable industrialisation and knowledge transfer. Recently we published a report which found that while there is widespread enthusiasm for digitalisation across GCC businesses, just 37 per cent have a relevant strategy and only three per cent view themselves at an advanced stage. Partnerships, along with defining a business strategy for the digital era and skill development, are a key part of the transition to digitalised businesses. Our ongoing partnership with Strata and Etihad to develop the region’s first 3D-printed part for aircraft interiors is a great example of how collaboration between the right global and local partners can advance digital manufacturing in a short space of time.
Ultimately, our challenge is to use digitalisation to build an industrial sector which benefits society as a whole. Every job in manufacturing creates up to two jobs in other sectors, and the conclusion here is obvious: If manufacturing is successful, our countries are successful. Education and training are key - there will be greater emphasis on digital skills, technology, innovation and skills for specific types of manufacturing. Crucially, these skills will need to be updated and upgraded throughout careers, building a highly competitive, local talent pool which drives jobs, prosperity and social balance.
This is a vital element of our participation as a founding partner of the Global Manufacturing and Industrialisation Summit (GMIS) earlier this year. Our vision for the future of manufacturing in the region is powered by digitalisation, but to be sustainable we need to have the right skills, expertise and mindset. Events such as GMIS provide us with the right platform to bring together global players in industrialisation, learn from our peers and seek best practices in order to tread our own path.
The Middle East has a long history of innovation, adaptability and an appetite for the new and exciting. We believe there is great potential for the region to drive sustainable economic and social growth, and using digitalisation it can become a leading global player in the industrial Internet of Things. We can’t be afraid to think big.