With over 300,000 employees, the machine, electrical and metal industry (MEM) is Switzerland's largest industrial employer. Despite the strong Swiss franc, the sector is internationally successful thanks to its high standards in terms of quality, precision, safety and reliability.

Despite its strong position in global competitiveness, the MEM industry is facing various challenges, such as an increasing competition from emerging markets, significant market shifts, demographic changes, shortages of skilled labour, unoccupied apprenticeships and political uncertainties such as the bilateral agreements with the EU.

Furthermore, regulatory changes, disruptive technologies and resources’ shortages become key drivers for new business models.

The energy strategy and the expected CO2 legislation are some of the regulatory changes affecting the industry today. The Industrial Internet of Things (IIoT), Artificial Intelligence and Robotics offer opportunities to increase efficiencies within companies as well as possibilities for new services, products and offerings (e.g. performance-based integration in the customers’ value chains). The recent rise in prices of strategic resources calls for reassessing the end-to-end value chain.

Specifically regarding disruptive technologies, our preliminary investigations suggest the role of digital technologies in shaping the future of the workplace in MEM companies (Arbeitswelt 4.0). Furthermore, three clusters of MEM companies seem to emerge in this study, with regard to their business model, use of industry 4.0 enablers, and therefore workplace:

• “Business-as-Usual”: Niche players with a strong market position; deeply embedded in customers’ value chains
• “Compression”: Companies under price pressure; less integrated in customers’ value chains
• “Expansion”: Deeply embedded in customers’ value chains; leveraging digitization for new business opportunities

Up to now, most MEM companies view Industry 4.0 as a possibility for process optimization. Other companies have already identified the opportunity for a deeper integration into customers’ value chain, and/or the possibility for generating new revenue with data-driven services.

Witnessing the recent significant strategy changes in globally leading industrial companies such as GE, Siemens, ABB and service providers such as Amazon Web Services, Microsoft Azure and or IBM Watson, IIoT possibly also holds the risk for machine manufacturers of losing part of their value chain to international competitors and newcomers.

Due to the growing interconnectivity of machines and the use of machine learning and AI for data analysis, some of these companies will be offering condition monitoring and related services. Thus, existing machine companies risk in the future to merely remain in the role of machine and spare-parts providers.

To face these challenges, CIIS provides applied research tailored to the need of companies to pursue continued international competitiveness and profitability.