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Automation Technologies 2/2016

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Automation Technologies 2/2016

Rise in american

Rise in american manufacturing A study carried out by the Boston Consulting Group indicates that “Made in America” is looking increasingly attractive. Currently, China’s industry is encountering competition from the U.S. Rising Chinese wages, higher U.S. productivity, and the weak dollar could soon close the gap between China and the U.S. According to a study by the Institute of Supply Management ISM (USA), in 2010, the cost to generate a dollar in sales was about 12 % lower in a factory in China than in the U.S., but in the year 2015, the difference in cost decreased to 7 %. TTIP, Germany and the partner country USA NEWS AND MARKETS Sushen Doshi Rising tensions with Russia, the Ukraine conflict, tackling the climate change, the refugee crisis and the Iran peace deal…Germany and the U.S. are working hand in hand to discover solutions to these global problems. Despite the storms due to the spying scandal, the relationship between Germany and the U.S. remains strong. And it looks to be further strengthened when President Obama arrives in Germany to meet Chancellor Merkel, to mark the opening of Hannover Messe, world’s leading industrial trade fair. Every year in April, the city of Hannover is lit up with the arrival of trade visitors from around the globe. Last year the partner country at the Hannover Messe was India, with its colorful and vibrant ‘Make in India’ campaign, the Indian delegation made quite an impression and opened the flood gates for foreign investment coming into India. This year things will be different and stakes will even be higher as the world’s largest economy and the EU’s largest trade partner the United States of America as the partner country. Heading the American delegation will be the President Obama himself. The purpose of his visit is primarily to jointly inaugurate the Hannover Messe and to discuss further the Transatlantic Trade and Investment Partnership between the U.S. and the EU, which underscores the growing importance of U.S. – German relations over the past decade. Author: Sushen Doshi, correspondent India for AUTOMATION TECHNOLOGIES USA as Partner country at Hannover Messe Over the years, the Fair has been a host for some of the most innovative American companies. Now, for the first time since the fair was established, the United States will be the Partner Country. This will offer the U.S. delegation exposure and opportunities to connect to the global industrial technology marketplace and discover new business prospects. With more than 250 companies participating, the size and scope of the U.S. delegation means attendees and exhibitors from foreign Without a doubt, the global digitalization of manufacturing , robotics, 3-D printing and other areas of technology, all of which will be on display in Hannover – is transforming the societies and economies on both sides of the Atlantic. The much talked about fourth industrial revolution will affect every industry – in new and unforeseen ways. Learning how we can benefit from this revolution, while acknowledging and addressing the challenges it poses, is of crucial importance for businesses and workers around the world. Industry 4.0: job creator? Historically, technological advances have created new jobs and the need for new and different roles, even as it renders others obsolete or redundant. As in the past, some jobs will evolve, some will be eliminated, and others will be created – including jobs in entirely new industries that we cannot even imagine today. Back in the 70s there were no cellphones, let alone smartphones or the Internet. Just two decades ago, occupations such as app developer, social media manager, search engine optimization specialist, and big data analyst did not exist. In terms of opportunities and challenges of innovation, American and German companies have a special role to play, and great prospects to seize. For the United States, innovation is totally in its interest. Through open platforms and systems that invite innovators and encourage risk-takers, USA has cultivated startups that became leg- AUTOMATION TECHNOLOGIES 2/2016

ends like Microsoft, Google and Apple amongst many more. But let’s also not forget how many German companies, both large and Mittelstand, began as startups. Innovation is in Germany’s DNA. Both these powerhouses of innovation and technology have a tradition of tackling new challenges, adapting to new circumstances, and seizing new opportunities. TTIP, what is it, what are its advantages and disadvantages At this point in time, the EU and the U.S. account for almost half of the world’s economic output and 40 % of global trade. Well, in the 21 st century, the world has become even flatter, more connected, and interdependent. And in the face of the urgent headlines of today, the importance of economic cooperation in this interconnected world is much more significant. This is why the Transatlantic Trade and Investment Partnership agreement is so important. On both sides of the Atlantic, it is important to strengthen the economies by ensuring long-term stability into the future. TTIP aims to provide the economic and strategic framework for that. For thousands of globally-minded companies at the Hannover Messe, unnecessary barriers to trade and investment – tariffs, red tape, delays, and uncertainty over product requirements – stand between entrepreneurs and potential customers. Removing these barriers makes sense. It will pave the way to innovate and meet the needs of communities and consumers. It’s an advantage for the entrepreneurs, who are ahead of the curve with cutting-edge ideas, to implement systems that encourage interoperability through transparent and market-driven processes. A study by the Centre for Economic Policy Research, a leading independent pan-European economic research organization provides some assessments of the sectors that are likely to benefit most from TTIP, metal products (exports up 12 %), processed foods (+9 %), chemicals (+9 %), other manufactured goods (+6 %), other transport equipment (+6 %), and especially motor vehicles (40 %). The expected benefits of TTIP are lower engineering, development and manufacturing costs, increased manufacturer/supplier confidence, reduced time from factory to market. This is the kind of strategy needed to thrive in the cost-competitive markets of today, and of the future. TTIP will not only create jobs in the near term, it will also create an environment for sustained economic growth and opportunity in the long term. What are the areas of concern regarding TTIP? One of the major reasons is the covert nature of the deal being discussed by the EU and the U.S officials. Some factors concerning the European society in particular are: n The food and environmental safety n The banking regulations n Privacy n ISDS (Investor-State dispute settlement) What is ISDS (Investor-State dispute settlement)? One of the main aims of TTIP is the introduction of Investor-State Dispute Settlements (ISDS), which allow companies to sue governments if those governments’ policies cause a loss of profits. In effect it means unelected transnational corporations can dictate the policies of democratically elected governments. ISDSs are already in place in other bi-lateral trade agreements around the world and have led to concerns as in Germany where Swedish energy company Vattenfall is suing the German government for billions of dollars over its decision to phase out nuclear power plants in the wake of the Fukushima disaster in Japan. Conclusion for TTIP Economically and strategically the choice is clear. By lowering barriers to trade and investment, TTIP will reinforce the position of American and EU industries. But the challenges, like the ones mentioned above are deeply concerning as well. At the end of the day, the decision will have to be made whether the societies on both the side of the Atlantic are better off with TTIP or without TTIP. Photographs: teaser Deutsche Messe, fotolia z USA’s 2015 economic situation (The 2016 Economic Report of the President) Economic situation Germany’s 2015 economic situation (German Federal statistics office) 1. Modest and steady growth, GDP grew by 1.8 % 1. Solid and consistent growth, GDP grew by 1.7 % 2. Fastest job growth since the 1990s and the fastest decline in the unemployment rate since the 1980s 3. Consumer confidence high, hence domestic demand & consumption is on the rise 4. The slow foreign demand hurting US exports and GDP growth, which slowed to 1.8 % in 2015, down from 2.5 % in 2014 5. Low oil prices boosted the economy only by 0.2 % and oil consumption by 0.5 %, it hurt drilling related in the oil & gas sector, dragging down the economy 0.3 % in that area 2. Germany notched up an surplus of 0.6 % of overall GDP (€ 19.4 billion) in 2015 3. Positive impulses came primarily from high domestic demand 4. The foreign trade had a dampening effect as the exports and imports slipped slightly 5. Low oil prices ought to be good for Germany, in the short term. But in the long term, they have negative effects, as the oil-exporting countries, who are important trading partners for Germany, can now not afford to spend enough on German goods as before, hence hampering the over-all German exports AUTOMATION TECHNOLOGIES 2/2016


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