The Machinery & Equipment Industry in Germany

Industrie 4.0 has become an international by-word for intelligent, networked production – with Germany consolidating its reputation as the world’s factory outfitter and a country capable of meeting the challenges of the digital age. International companies that come to Germany gain direct access to Europe’s biggest manufacturing market as well as a unique R&D and cluster landscape.

Industrie 4.0 R&D hotspot Germany

The online map shows where universities and research institutes, networks and clusters as well as SME support institutions are located in Germany. For a customized search, the following four search filters are available: SME support institutions, cluster & networks, universities and associated institutes as well as non-university research institutes. Click on the location for detailed information about the corresponding organization.

University/non-university research institutes

Internationally renowned non-university R&D institutes as well universities and associated institutes focus their research activities on digitalization, production technologies and Industrie 4.0 and cooperate closely with industry players.  These include various Fraunhofer Institutes, the German Center for Artificial Intelligence (DFKI) and the National Research Center for Applied Cyber Security (ATHENE). As well as conducting research and  promoting knowledge transfer with industry, universities also train the engineers of tomorrow.

Clusters & networks

Investors will find an impressive number of regional and national networks and clusters in Germany. Plattform Industrie 4.0 is the central network to advance digital transformation in production in the country. The initiative seeks to consolidate Germany’s leading Industrie 4.0 role by engaging in ongoing dialogue with partners and developing action recommendations for all stakeholders that serve as the basis for a common framework.

Further important national industry associations working in the field of Industrie 4.0 include acatech (National Academy of Science and Engineering), Bitkom (Germany's digital association), VDMA (Association of German Machinery and Plant Manufacturers), and ZVEI (German Electrical and Electronic Manufacturers Association).

In numerous regional clusters and networks, companies cooperate closely with R&D institutes and universities with a focus on automation and production technologies and Industrie 4.0.

SME support institutions

Small and medium-sized companies in particular can find a lot of support with their digitalization activities. Mittelstand 4.0 Competence Centers raise awareness about digitalization among companies and provide support including information, training and the opportunity to view and test new solutions in practice across the country. In addition, universities and research institutes provide test and demonstration labs for Industrie 4.0 applications.

Opportunities: Digitalizing German industry

A number of industries are increasing their digital efforts, with global businesses turning to digital services for the implementation of new business models that support increased productivity and the development of new products and services for increased customer and supplier engagement.

The Internet of Things

The Internet of Things ("IoT") is one of the most promising innovation accelerators for digital enterprises, with use cases spanning manufacturing, construction, retail, and transportation — almost all areas that utilize online devices or sensors. The short-term focus is on use cases and initiatives that can provide immediate and easy financial benefits with IoT enabling a new level of automation.

Big data

Germany is the fifth largest digital economy in the world. All major industries – automotive, electrical and chemical sector – rely on big data. Developments in the IT infrastructure are set to fuel further market growth: 5G networks see strong growth (86.5 percent of Germany covered in 2021; commercial launches of SA stand alone networks). Eighty percent of all companies in the manufacturing sector plan to digitalize their value chain up to 2024.

Besides big data, analytics and IT infrastructure,  additive manufacturing ("3D printing") is another very promising sector in the field of industry digitalization.  Around one in three large German industrial companies currently use 3D printing.

R&D support

Companies can count on generous Industrie 4.0 research support in Germany. The European Union supports technological innovation through the Horizon Europe program and Germany has established several funding programs in order to consolidate its status as an Industrie 4.0 leader.

Industrie 4.0 markets by industry sector

Industrie 4.0 as a project for the comprehensive digitalization of industrial production is being widely implemented in Germany as a leading industrial location. In Germany, 62 percent of companies utilize Industrie 4.0-related technologies and solutions (software, IT services and hardware) according to a Bitkom digital association 2021 study.  

The main application industries driving Industrie 4.0 solutions uptake are the automotive, mechanical and plant engineering, and electronics and high-tech sectors. Find out more about each and every major Industrie 4.0 sector below.

Automotive industry

Germany is the world's automotive innovation hub - making use of Industrie 4.0 solutions to create tomorrow's mobility solutions. The sector accounts for one third of the country's industry R&D spending.

ICT and software industry

Germany has one of the world's largest ICT markets and boasts the single largest software market in Europe. The country's ICT and software sectors are leading players in the deployment of Industrie 4.0 solutions.

Machinery & equipment industry

Germany is the world's leading supplier of machinery and equipment. The industry has invested more than EUR 10 billion in Industrie 4.0 solutions from 2015 to 2020, with smart manufacturing investment set to continue for the foreseeable future.

Microelectronics industry

Germany is a major microelectronics force, securing its place at the top of the international table as Europe’s leading semiconductor production location. The country plans to spend up to EUR 50 billion to consolidate Germany’s position as an attractive semiconductor production location.

• Automotive Industry
• ICT and Software Industry
• Machinery and Equipment Industry
• Microelectronics Industry

Learn more about Germany's Industrie 4.0 success story.

Digital farming in numbers

One in six companies in Germany expects to invest in digitalization in the immediate future according to digital association bitkom. Around four in five companies also see digitalization as an opportunity. Artificial intelligence and big data solution uptake currently remains low (around 14 percent), allowing innovative SMEs and start-ups alike to capitalize from the future demand from almost 60 percent of companies intending to implement such solutions in the near future.

The global digital farming market value is forecast to rise to USD 34 billion by 2026. Worldwide, the largest digital farming technology segments are:

• Internet of Things (IoT), 19 percent
• Robotics, 17 percent
• Artificial intelligence (AI), 14 percent

According to forecasts, the global IoT agricultural market is set to grow by more than 90 percent to around USD 7 billion by 2025 – with Europe and North America representing the largest markets. Smart farming and agricultural robotic (“agri-robotic”) solutions are also expected to become significant agricultural trends in the near future.

Agriculture transformation in Germany

Agriculture in Germany is undergoing a structural transformation. The absolute number of farms and labor force has fallen as agricultural product demand has increased. In 2022, Germany was Europe’s second-biggest agricultural production nation with production value of more than EUR 74 billion.

Nearly half – 16.6 million hectares – of domestic land mass is used for agricultural purposes. Bavaria, Baden-Württemberg, Lower Saxony, and North Rhine-Westphalia are the federal states with the most agricultural land use. Arable farming accounts for over 70 percent of land used. Livestock husbandry is focused in the areas of beef, pork and poultry production.

The popularity of organic food in Germany has been growing exponentially in recent years in the EU’s most populous nation. And now Germany has set concrete targets for sustainable farming for the rest of this decade. In our video we take a look at what’s up down on the farm in Germany and how your business could benefit.

Digital farming market opportunities in Germany

Germany provides a plethora of exciting market opportunities to companies active in the field of digital agriculture. Below we list just a few of the segments where new opportunities are presenting themselves to SMEs and start-ups alike.

Agricultural machinery manufacturers meet digital product and service providers

Germany is the world’s third biggest producer of agricultural machinery and is home to a domestic market valued at over EUR 7 billion in 2022. Agricultural machinery manufacturers diversifying into autonomous farming, alternative powertrains and ICT solutions require cooperation with digital product and service providers. Data collection and processing and intelligent automation technologies are also important focal points in new machinery development. Agricultural businesses tend to source machinery from an array of producers, creating a marked preference for solutions that allow digital connectivity between machines.

Commercializing autonomous field robots 

Global market volume for agricultural robotics (“agri-botics”) is expected to grow to almost 36 billion units by 2030 according to an Agricultural Robots Market study. Small-machine autonomous field robots (AFRs) represent one promising solution to the chemically treat crop and plant diseases with pesticide microdoses. Autonomous systems increase work safety by reducing contact to substances and free up labor for the cultivation of specialty crops for example. Autonomous field robots could enter into commercial production as early as 2030. 

Artificial intelligence and precision farming

Precision farming allows domestic farms to respond in real time to changes in the weather, soil and soil conditions, water supply and other quality characteristics that impact upon crop growth. The implementation of AI and software precision farming solutions frees up resources and improves product quality. The Federal Ministry of Food and Agriculture is supporting EUR 44 million funding to 36 collaborative AI research projects. Of these projects, 24 are crop production related, with a further four projects investigating the use of AI in animal welfare.

On the investment agenda: sensor technologies  

Sensor technologies for animal husbandry use are currently high on the investment agenda of companies in the sector, with almost half of all domestic farms planning future investment according to bitkom. Sensors can also be deployed to determine crop biomass levels for the appropriate use of fertilizer and crop protection measures.

Digital solutions for organic farming 

Germany is Europe’s largest organic food market. European Union and German federal regulations restrict the use of herbicides and promote the use of sustainable livestock husbandry. Demand for organic and sustainably farmed produce creates new opportunities for companies providing digital solutions to promote animal welfare and herbicide use reduction.

Location advantage: R&D in Germany

Germany’s world-class R&D institutes and universities are helping shape the future of digital farming. Working closely with industry and the farming community, Fraunhofer-Gesellschaft and Leibniz Association institutions are bringing innovations to market. Internationally active companies, small and medium-sized enterprises and start-ups are all at home in different industry clusters across the country.

Digital farming funding

Germany supports digitalization in agriculture through a number of initiatives and programs. Specialized R&D funding programs have been created to promote the development of digital agriculture technologies. Research and development programs can provide up to 70 percent of eligible costs subject to company size and area of research activity.

Clusters and industry associations

International companies active in the digital farming sector enjoy ready access to agricultural technology clusters where farmers, machinery manufacturers, agrotech start-ups, universities, and research institutes work together. Stakeholders are organized in regional networks including the Agrotech Valley in northwestern Germany, Agronym in Saxony, and Competence Network Digital Agriculture Bavaria in Bavaria. 

Our R&D cluster map provides you with an overview of important actors across Germany.