Opportunity from Crisis

The coronavirus pandemic has created new arenas and chances for investors interested in German businesses. The openings are particularly apparent in robotics, 3D printing, data protection and e-learning.

October, 2020

ZenZoe works at night. When things calm down in the corridors and examination rooms of the Burgos University Hospital in northern Spain, the sanitation robot autonomously cleanses surfaces of pathogens, possibly including the coronavirus that has claimed so many lives. Instead of using disinfectants, ZenZoe bathes them in UV light, preventing patients and hospital staff from being exposed to potentially harmful chemicals.

ZenZoe was developed by Berlin-based InSystems Automation after the small high-tech firm was acquired by Spain’s ASTI Mobile Robotics in October 2019. At the height of the Covid-19 outbreak, InSystems’ orders shot up – just one of many examples of the corona-influenced opportunities in the German robotics and automation sector.

ZenZoe is a disinfection robot developed by Spanish ASTI Mobile Robotics and Berlin-based InSystems Automation, together with BOOS Technical Lighting. It emits an ultraviolet light that penetrates all areas of rooms, killing 99.9 percent of the Covid-19 virus in the air and on surfaces and objects. Its effectiveness has been proven in hospital settings.

© ASTI TechGroup/InSystems Automation

In 2019, the industry generated EUR 14.7 billion in revenue, with integrated assembly solutions and robotics contributing 8 billion and 4 billion, respectively, and machine vision making up the remainder.

“The merger with ASTI allowed us to scale up quickly, enough to take on such orders, while for ASTI it brought a foothold in the German market,” says Andre Schmiljun, ASTI InSystems’ officer for media affairs. “There is a lot of demand in German industry for intelligent transport robots, a field we have been heavily engaged in for nearly a decade.”

“Covid-19 has shown us that supply chains can snap and that we need more automatization to make repetitive yet crucial work tasks feasible in high-cost countries like Germany,” Schmiljun adds.

Australians take the plunge

Another company to view the challenges of coronavirus as an opportunity is SPEE3D. In April, at the height of the lockdown, the Australian manufacturer of 3D printers pressed on with its expansion plans in the northern German city of Lübeck.

SPEE3D printers enable the world’s most affordable metal-additive manufacturing process and can coat surfaces with copper to repel viruses.

© SPEE3D Europe

The company’s 3D printers can work at three times the speed of sound and are aimed at industries such as shipbuilding, aerospace, electronics and defense. Their specialty is “cold spray” technology, which significantly expands the array of metals that can be processed by 3D printing while opening up new industrial uses as well. SPEE3D’s printers can also coat surfaces with copper, making them better able to repel and help kill viruses.

Many observers think 3D printers will be key to safeguarding German manufacturing’s global competitiveness, since the technology can remove the necessity of mass producing at economies of scale. Germany generated around EUR 1 billion in additive-manufacturing-related revenues during 2019, making it the world’s largest single market, ahead of the U.S. and China.

»Overall, I see positive effects of the pandemic.«

Stephan Fricke
CEO of the German Outsourcing Association

“Covid-19’s supply chain disruptions showed us that manufacturing must become more autonomous and agile, and 3D printing with its ability to produce parts ad hoc facilitates this shift,” says SPEE3D’s European managing director Stefan Ritt. “We see major potential deriving from the German economy’s robustness as well as the country’s strong focus on metal engineering.”

Data, data and more data

Smart manufacturing involves ever-greater data volumes exchanged between devices, and here, too, the coronavirus has accelerated existing trends and created new needs and niches for businesses.

For example, the German government has long been committed to building a nationwide 5G network, and the GAIA-X project kicked off by France and Germany in October 2019 has been working toward creating a secure data infrastructure system in Europe. But the accompanying requirements for secure data infrastructure increased incrementally because of corona, as countless businesses turned to video conferencing tools, only to find that some of them had data security issues.

Cloud&Heat: Marius Feldmann, COO;  Nicolas Roehrs, CEO; Jens Struckmeier, CTO

© Cloud&Heat

 “Covid-19 has boosted demand for cloud solutions, and that, in turn, is forcing Europe to get its security approach up to date,” says Ronny Reinhardt, innovation manager at Cloud&Heat, a Dresden-based IT service provider involved in GAIA-X.

Oliver Köth, CTO of NTT DATA DACH, a subsidiary of Nippon Telegraph and Telephone Corporation (NTT) and another contributor to GAIA-X, sees particular needs in heavily regulated sectors such as aviation, financial services and insurance. Due to the especially sensitive nature of their data, public cloud computing simply is not suitable for businesses in these areas. Moreover, NTT DATA’s clients are keen to manage costs.

Since 2011, Cloud&Heat Technologies has been revolutionizing the global cloud and data center market with its sustainable technology. It evolved from the idea of using the waste heat from Internet servers for heating.

© Cloud&Heat

 “In times of crisis, company data must be dealt with swiftly using real-time analytics as opposed to weekly or monthly reports,” Köth says. “NTT DATA is taking part in this trend, among other things, by investing heavily in artificial intelligence (AI), which is crucial to cost reduction, and in cloud technology, which is a very dynamic market with a fluid, competitive landscape.”

Excellent times for e-learning

Finally, the pandemic has also opened up space for innovation in digital learning. In early May, with many educational institutions shuttered down, the German government allocated EUR 100 million for the establishment of new e-learning platforms and the upgrading of existing ones. This was in addition to the “DigitalPakt Schule,” which made EUR 5 billion available for the digitalization of Germany’s schools until 2024.

»In times of crisis, the economy relies on digitalization to keep going.«

Thomas Jarzombek
Commissioner for the digital industry and start-ups at the Ministry for Economic Affairs

These measures mean new opportunities for SMEs like VOCANTO, which provides tools for vocational training for everyone from bankers to electricians. Since the beginning of the pandemic, license sales have tripled, with Bosch, for instance, recently adding nearly 2,000 licenses.

“Learning via interactive 3D animation is so much more attractive than using conventional textbooks,” says VOCANTO CEO Johannes Schulte. “That means apprentices are more motivated and better prepared.”

With around 400 German universities and more than 40,000 schools facing an uncertain future this autumn, e-learning is another sector worth some intensive study.

Lasting Change: Three Megatrends Increasing Germany’s Pulling Power

Covid-19

Covid-19 has been a wake-up call to decision-makers in global corporations and SMEs alike.
It has shaken up the way we work, accelerating the shift to automatization, driving forward digitalization plans and compelling companies to shorten their supply chains.

61%

Automatization: 61% of production processes have been automatized. German manufacturers are the world leaders in the machinery and equipment sectors.*

51%

Digitalization: 51% of German SMEs saw digitalization as a strategic project in 2019, up from 45% in the previous year.**

73 %

Supply Chains: 73% of German SMEs experienced supply chain issues due to Covid-19; 43% of them plan to modify their supply chains.***

Sources: * GTAI; **Digitalisierungsindex Mittelstand 2019, Deutsche Telekom; ***McKinsey survey, mid-May 2020