Results of a comprehensive analysis of pertinent literature conducted by the MMB Institute

What type of competencies will Industry 4.0 require?

As part of the "Factory of the Future" project, the MMB Institute conducted a study regarding skill requirements in the digitalised world of work. Managing partner and expert for media and competence research Dr Ulrich Schmid presents the key findings of the study.

Roughly 30 percent of companies in Germany consider “inadequate qualifications of the employees” a major problem for the transition to Industry 4.0 (I 4.0).[1] Looking at the pertinent research literature, there is no doubt that the operation of digitally networked manufacturing methods and systems based on data-driven processes will, above all, require new, cross-functional IT skills – skills that touch all professional fields and activities.[2] Digital transformation needs more than new skills, though: it also produces entirely new professions and job profiles as well as changes in didactic methodology and forms of qualification.

IT + specialist knowledge x soft skills = competencies4.0

To answer the question of how the developments bundled under the keyword of “Industry 4.0” would impact professional qualifications and what type of competence expectations this would generate specifically, the MMB Institute analysed a total of 26 studies, analyses, and research reports from the past 2 to 3 years and compiled the results in a structured visualisation. In sum, this produced the following findings:

  1. Many studies differentiate among multiple competency levels (with these levels receiving different designations in some cases), which are:
  • Technical skills: Basic and specialist knowledge from a person’s own specialty/discipline
  • Data and IT skills: Control, use, checking of data-based systems, data analysis, data security/data protection, etc.
  • Social competence: Interdisciplinary cooperation, project management, communication skills, organisational and leadership competence, decision-making competence, etc.
  • Personal skills: Self-initiated learning skills, analytical thinking, problem solver mindset, capacity for abstract thought, openness, flexibility, etc.
  1. The subject of “competences” is described as a high-priority in nearly all I 4.0 publications, but the analysis and presentation often remain rather abstract, cursory, and speculative. In many cases, the description is example-based and illustrative or limited to a given industry. Predominantly the studies listed below treat the topic in a more differentiated manner that is based on empirical methods:
  2. While the special relevance of data and IT skills will surprise no-one in view of the technological challenges of I 4.0, it is the urgency with which many studies point out the importance of the social and, above all, the personal skills that is truly remarkable: the readiness for life-long learning, creativity, or analytical thinking, for example, are of essential significance in the eyes of many observers. Naturally, this is directly linked to the question how especially such “soft” skills and mindsets can be systematically developed within the framework of personnel development and professional qualification.
  3. Also, there is a widespread consensus that continuing professional development will have to tread new paths to achieve a workplace-based and process-oriented, customisable, and informal learning process encompassing the use of digital learning technologies.[3] In this context, the social aspect of I 4.0 above all also involves the problem of “upskilling” low-skilled workers and of the devaluation of automatable activities looming in many jobs. The fact that the qualification of older, less digitally versed employees must be sensibly formulated and that I 4.0 must also be utilised as an opportunity for improving the quality of today’s activities and job models is considered a major challenge in this regard – in short, employees must be encouraged to support new (digital) education, work, and career models and transformed into autonomous “life-long learners”.

Upgrade or downgrade?

According to the VDMA study on industry 4.0 and qualification in 2025 mentioned above, there are rather widely diverging scenarios concerning future qualification needs – the following will give a brief overview of two plausible assumptions:

  1. In the “General Upgrade” scenario, a “digital” qualification need that is growing across the board for almost all fields of activities is expected, for example – albeit linked to a certain devaluation of traditional skilled-worker qualifications: “Since”, as Marion Weissenberger-Eibl of the Fraunhofer Institute for Systems and Innovation Research ISI explains, “many activity profiles at the man-machine interface are becoming more and more similar in the digital world of work,” this would result in “more cross-discipline requirements or such that are independent from disciplines emerging across industries – technical knowledge could thus move increasingly into the background, general digital base competences and universal skills could gain a significantly higher status.” (Cf. Weissenberger-Eibl, Marion, 2017: Wie wir morgen arbeiten werden. Und was. In: “Brand eins”, issue 3/2017, p. 76 – 77 (“How we will be working tomorrow. And what we will be doing.”).
  2. The “Central Link” scenario, on the other hand, emphasises the growing relevance of digitally competent skilled workers – in other words, the definition of the so-called grey-collar workers. Permanent State Secretary at the Federal Ministry of Labour and Social Affairs Thorben Albrecht phrased this as follows: “Among the German skilled worker community, an “upskilling” effort is required, for their activities, too, will continuously become more knowledge-intensive, and the share of routine jobs will decline.” (See Huffington Post article, 05 Oct. 2015; see also Koch, Christoph, 2017.)

If and to what degree qualifications will be devaluated or have to be newly developed in the future will depend predominantly upon the question how comprehensively a company will automate the data processing for its logistics and production, service, and sales processes, and what level the pressure caused by the need to be highly flexible and effective will reach. Where the new technologies play more of an assistive role – as would be the case in large parts of the aviation industry – it is a more likely assumption that existing skilled-worker qualification profiles that are upgraded with IT related knowledge will become consistently more significant (“Central Link” scenario). Skilled workers will then be forced to assume more control, quality assurance, and checking roles than before. However, if the “cyber-physical systems” take over the leadership role in a production organisation and the production process is thus nearly fully automated, remote controlled, and networked, this may also result in an increased number of skilled workers with a moderate qualification level being replaced with employees skilled in IT using digital tools.

The I 4.0 competence matrix

The analysis of the studies with regard to the competence expectations mentioned therein produced the following overview; the skills stated first and printed in bold characters were mentioned several times and in at least five different studies:

Competence expectations

Analysis of the study of pertinent literature: competence expectations (MMB Institute, 2017)

Without being able to address the individual items in detail, the following can be stated:

In the technical skills segment, it is becoming evident that the skills named here are, in the broadest sense, involving the control, monitoring, and handling of disturbances, i.e., assuring normal operations and high quality. Naturally, this requires comprehensive knowledge of the processes and systems, but also the willingness to take independent responsibility for making decisions on the basis of the analysed data. Thus, the basic focus is on technical skills plus data analysis and independent actions.

The second group, data and IT skills, is dominated by skills involving the handling of data-based systems – with the emphasis on user-level knowledge – although skills related to the conception and development, programming, and design of systems are addressed, as well. Thus, the core focus is on the development and application of computer-based systems. A related additional aspect is the overall topic of data security and data protection.

The third group, social skills, is dominated by skills that involve cooperation and collaboration in a wide variety of constellations, be they interdisciplinary or international, multi-hierarchical, or virtual. Highly qualified teams who work together in different locations under their own responsibility with flexible and result-oriented ways of working demand advanced leadership and management qualities as well as, in general, strong communication skills – naturally, also involving the application of modern media and platforms.

Skills that are closely related to this – and can potentially not be unambiguously delineated from them in everyday situations – are summarised under personal skills, here. As mentioned above, many studies see this group as the one with the greatest need for action. This may be related to the fact that important competences stated here, e.g. independent responsibility, analytical thinking capabilities, problem solver mindset, self-organisation, etc., are difficult to teach with conventional training, education, or further training measures. If you have spent half your professional life in tight hierarchical structures with clearly defined tasks, you may not start to think and act creatively and systemically and with independent responsibility, even after you complete such training. In other words, these are personality developing characteristics (attitudes), which must be individually developed in a lengthy process and require continued fostering.

Reorientation of vocational training and (digital) continuing education

Against this background, corporate vocational training and professional development must be reoriented as a whole, with the application of modern digital learning technologies and formats taking on a more prominent role. Further training and life-long learning, video tutorials, and micro-learning, etc. will, however, not, and many observers are in agreement on this, suffice to develop such qualifications. Rather, the question arises how the educational system as a whole must be transformed to make the requisite IT qualifications available on an adequate level with the academic foundations needed. A study conducted by Boston Consulting Group from 2015, for example, stated that “[e]ducation systems must address the significant shortfall in IT skills required for Industry 4.0. For example, considering German manufacturers’ staffing requirements relating to Industry 4.0, we estimate a potential shortfall by 2025 of approximately 120,000 university graduates with degrees in IT and computer engineering. These skills require in-depth university training and often cannot be acquired by current members of the workforce on the job or through requalification.” For one, the study concludes that universities and colleges must amplify their efforts in cooperation with industrial partners to build high-quality academic IT expertise. Dual studies and vocational training options seem to be the means of choice, here. For two, new forms of life-long learning encompassing even more digital educational resources are demanded: according to the BCG experts, “[a]cademic leaders should prepare the education system to support the ongoing requalification of the industrial workforce, recognizing the need for training to take place in more settings than only the traditional off-site locations“.[4]

[2]  Cf. Fidler, F. (2015). Entwarnung: „Keine Angst vor Industrie 4.0“. Industrie 4.0 und die Folgen (“All-clear: ‘No fear of Industry 4.0’. Industry 4.0 and its consequences). Part 5

Berufsbilder im Wandel (the evolution of professions), Der Standard, 21/22 March; (22 March 2017) and (22 March 2017)

[3]  Cf. Industry-Science Research Alliance / acatech (ed.) (2013): Deutschlands Zukunft als Produktionsstandort sichern (Assuring Germany’s future as a production centre). Umsetzungsempfehlungen für das Zukunftsprojekt Industrie 4.0 (implementation recommendations for the Industry 4.0 future project). Abschlussbericht des Arbeitskreises Industrie 4.0 (Final report of the Industry 4.0 working group). Frankfurt/Main. (22 March 2017), p. 59; Kärcher, B. (2014): Alternative Wege in die Industrie 4.0 – Möglichkeiten und Grenzen (alternative paths for Industry 4.0 – possibilities and limitations). In: BMWi (ed.): Zukunft der Arbeit in Industrie 4.0 (future of work in the Industry 4.0);

Spath, D., Ganschar, O., Gerlach, S., Hämmerle, M., Krause, T., Schlund, S. (2013): Produktionsarbeit der Zukunft – Industrie 4.0 (production work of the future within the Industry 4.0). Fraunhofer Institute for Industrial Engineering IAO, Fraunhofer Verlag, (22 March 2017), p. 126 and 54.

Author: Dr Ulrich Schmid

Dr Ulrich Schmid is working as a partner and managing director of the “MMB Institute for Media and Competence Research”. His responsibilities there include the “Monitor Digitale Bildung” study on digital education, which is performed by MMB for the Bertelsmann Stiftung foundation. Aside from additional studies for foundations, companies, and ministries, Ulrich Schmid also advises companies and public institutions on digital education matters.

MMB Institute – Gesellschaft für Medien- und Kompetenzforschung mbH

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What are the competence requirements in a digitalised world of working? Dr Schmid’s presentation will answer this question.