Using the Chances of Chemistry 4.0 for a Strong Location

Industrial Policy: Using the Chances of Chemistry 4.0

Arguments and Positions

Industry is the basis for Germany’s economic strength. Products and innovations from the chemical-pharmaceutical industry decisively contribute to success. But the environment for companies is changing rapidly: While competitive pressure is growing, the fourth industrial revolution has started – and sustainable management is gaining in importance.

Innovations are the prerequisite for a successful future of Germany; they are increasingly being developed in cross-sector networks. The chemical-pharmaceutical industry with its innovations can make decisive contributions to a sustainable development – by seeing digitalisation, sustainability and circular economy as an opportunity.

The new era "Chemistry 4.0" brings the fourth development stage in the 150-year long history of the industry. Through digitalisation, circular economy and sustainability the companies will change fundamentally their products, processes and business models. Here, linking chemical and pharmaceutical products with services will be the key for additional value creation. In chemistry, digitalisation means not only the use of internal and external data to optimise operational processes; it also means the development of new, digital business models. Furthermore, the companies are working on future-oriented solutions with impulses for a circular management style – with increasing resource efficiency, inter alia, through material cycles.

In the next years, the industry will invest over 1 billion euros in digitalisation projects and new, sustainable business models. Add to this several billion euros annually for developing sustainable innovations. The chemical-pharmaceutical industry is more and more turning from a supplier of materials into a provider of solutions and services

A good industrial policy strengthens industry
Companies need reliable and innovation-friendly framework conditions so that innovative ideas can fast become marketable products, processes and business models. Structual change succeeds best in a regulatory environment that encourages new products, services and investments instead of impairing them. But all too often, industrial policy relies on planned economy measures such as extra conditions, quotas or – as suggested by German federal economics minister Altmaier – state participations. Many measures have turned out inefficient. Moreover, openness for technologies is lacking. Industrial policy action is needed overall.


  • Strengthen sustainable development through better framework conditions
    Politicians should give impulses by way of the following: tackle urgent infrastructure investments, support the digitalisation of industry, make further efforts for trade liberalisation and a definition of international rules, and ensure that regulation is efficient and legally sound. Furthermore, Germany should face up to the international tax competition – while state participations in companies are the wrong way.
  • Make Germany fit for the digital future
    For further developing digitalisation, the public sector should expand the technical infrastructure, promote digital education, and scrutinize existing data protection rules. The required fast broadband infrastructure should be available by 2025 at the latest. In parallel, a high-performance security network needs to be created in Germany and Europe between public authorities, companies and research facilities.
  • Drive forward the circular economy under industrial policy
    In order to achieve progress in the circular economy, future and existing legislations should undergo an "innovation check" so that new business models are not obstructed. These points are recommended to stimulate more investment: research promotion for a wide range of technologies, well-funded project support, easier access to venture capital, encouragement of private-public partnerships for pilot projects. Also needed are a societal dialogue on the potential of the circular economy and suitable framework conditions under the industrial policy.

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Henrik Meincke