A choir sang “Don’t stop” by Fleetwood Mac during the opening ceremony of Hannover Messe 2022. Maybe it’s because the present demands so much more from companies that they can forget they have to also “thinking about tomorrow”. Nothing here resembles a pre-pandemic period. “Yesterday is gone.”
Over 1,000 Chinese organizations are absent from the 2022 show due to the COVID-19 pandemic and their country’s strict zero COVID strategy. The fair is only half its pre-pandemic size.
Many European and German companies are among the 2,500 exhibitors who returned. Companies have adapted their messaging to focus on energy amid soaring prices and uncertainty due to the ongoing war in Ukraine. Their presentations show how their products can contribute to energy, using it efficiently and sometimes more sustainably.
According to Jochen Köckler of Deutsche Messe, which organizes the event, the current focus on energy does not prevent companies from taking on other challenges to prepare for the future.
“Without energy, you can’t run a factory,” he explained. “It’s a prerequisite…you have a sustainable and reliable way to use energy 24/7 in the new situation.”
Challenges on several fronts
While digitalization, automation and AI are touted as solutions that could help businesses deal with energy efficiency and supply disruptions amid the pandemic, the technology has its limits.
“You need to have the physical layer,” says Georg Kube, who heads software giant SAP’s industrial manufacturing unit.
“Scanning is a mirror of the physical layer. Of course, you have to have a means of transport,” he explained. “You have to have production, you have to have sources.”
Companies are facing major challenges on several fronts. The “new situation” isn’t just about energy, it’s about how they literally run their businesses.
“Export-oriented companies need to rethink their strategy,” said Thilo Brodtmann, executive director of the German Association of Engineers (VDMA).
Supply chain disruptions amid the pandemic have led many companies to re-examine their reliance on Chinese suppliers, he added. And human rights and democracy were playing an increasingly important role in decisions about trading partners, as the war in Ukraine had demonstrated that undemocratic countries like Russia were unreliable trading partners, explained Brodtmann.
Technological solutions to reduce CO2 emissions feature prominently at the 2022 Hannover Motor Show
A pivot towards new markets?
It’s a new world where European governments and businesses will have to deal with what German Chancellor Olaf Scholz calls “the multipolar reality of the 21st century”.
“We must bring with us emerging and developing countries, whose demographic and economic dynamics are turning them into new centers of power,” Scholz told Hannover Messe attendees at the opening ceremony on Sunday.
The solution is to invest in production and research in other regions “to become independent and have a completely different value chain,” explains Brodtmann.
German companies will therefore look to countries in other parts of Asia, Latin America and Africa to diversify their value chains. Something other industry representatives would agree with.
“I’m sure that [German] companies are ready to invest in any of these countries,” said Wolfgang Weber of the Association of Electrical and Electronic Industry (ZVEI).
But companies will need the support of policy makers to achieve this, he adds, because it is their responsibility. They must ensure that companies have the ideal conditions to do business elsewhere.
“It’s very important that policymakers and industry come together to open up new markets around the world,” Weber said.
The “new markets” are not so well represented at Hannover Messe. This is the case for a large part of Asia, Latin America and Africa. More work will be needed from policymakers and businesses to bring them into “the multipolar reality of the 21st century”.
Edited by: Hardy Graupner