Czech Republic: What Is the Future of Industry?

European Perspectives Czech Republic: What Is the Future of Industry?

22.02.2017 | Author / Editor: Roman Dvorak, Editor-in-Chief, Publisher, MM Industrial Spectrum, Czech Republic / Susanne Hertenberger

Industrial production is changing its structure on a global scale . Europe is losing its standing and on the other hand developing countries are increasingly playing a leading role.

In 1991 the production of developing countries represented 21% of the volume of 3 451 bn. Euro. Twenty years later 40% of the volume of 6 577 bn. Euro comes from developing countries.
(Source: Roland Berger, consultancy agency, study)

During the last twenty years the structure of industrial production has been changing radically. However European countries are little by little losing their standing. Attention is focused on the emerging economies of China and Brazil which are gaining a continuously growing share of the market. Statistics of new and lost jobs in industrial spheres in individual European countries serve as a proof of the above statement. On the contrary in China and Brazil the increase of jobs available in industry during the last twenty years is in percent (China 39% and Brazil 23%). However in advanced European industrial countries a long-time decline can be observed – in France by 20%, in Great Britain by even 29% and even such an industrially strong country as Germany experienced an 8% decline.

Automation will not save us

Reasoning such as that reduction of the number of jobs can be replaced by automation and that reduction of employment will not cause a loss in the standing of the production of industrial products are a step in the wrong direction. Data on the added value of industry clearly show that the share of the market of emerging economies in the monitored period from the beginning of the nineties of the last century has doubled and on the contrary the share of Western Europe was reduced from one third to one fourth

What is the potential solution? Basically a very simple one and lies in all we are still able, compared with the developing world, to perform. To fully apply new technologies which have a potential to reduce costs and make production more efficient. Firms which can in time integrate new technologies in their production process will have an appropriate advantage. The success is concealed in details which play a key role above all in the relations to the customer. For example the 3D printing technology presents the creation of customized products in a short time with zero additional costs compared with the change of a batch produced component. Flexibility of production and reduction of fixed costs are also necessary.

The producer must know the requirements of his customers in detail. To them he must adapt his firm, its production process and offers.

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