Digitalisation means opportunities and challenges for all sectors in the federal state, i.e. for industry, crafts, commerce, hospitality and services as a whole. However, Business 4.0 does not restrict itself to the technological aspects of networking and digitalisation along the entire value chain of products and services. Business 4.0 also includes changes at process level as well as non-technological innovation in the sense of smart services and interconnected work structures, new leadership concepts, changes in company culture as well as new business models.
Against this background, the ‘Business 4.0 Initiative’ is a roof that allows existing activities of Business 4.0 across sectors while creating added value for all stakeholders. By connecting existing and new activities, additional momentum can be generated for digitalisation by exchanging experience and sharing knowledge between different industries and sectors. An industry-spanning approach is to be applied in order to address and handle cross-section topics. The ‘Business 4.0 Initiative’ roof therefore spans across several industry pillars, such as the ‘Industry 4.0 Alliance’, Crafts 4.0, Freelance Professions 4.0 and Services 4.0 and could also include other initiatives, for instance, for the construction and health sectors. Information and communication technologies and software are key enablers for the digitalisation of the economy. Further qualification, Labour 4.0, Technology and Science Transfer 4.0, IT security, new digital companies and start-ups, new business models, financing and internationalisation are important foundations and cross-sectional areas for the ‘Business 4.0 Initiative’.

It is clear that the level of digitalisation varies between companies and industries and that this will continue in the future. On the one hand, there are digital newbees who, for various reasons, are rather hesitant to embark on the digital transformation. On the other hand, there are digital pioneers – often young companies from the IT sector whose business models are already largely digitalised. In between, there is the digital middle with many companies who, despite being open to digital change, still have a long way to go towards digitalisation.
In order to support the digitalisation of the different groups of businesses, support measures must be tuned to the different target groups. Digital newbees, for instance, also require suitable consultancy support, whilst the digital middle needs support when it comes to transferring knowledge and securing the supply of skilled labour. Digital pioneers, on the other hand, require support from academia, with venture capital and for market access.

Digitalisation will transform the working world fundamentally, both with a view to future employment prospects and with regard to individual workplaces and activities. The joint aim of the Ministry of Economic Affairs, Labour and Housing, of the social partners, chambers, associations and academia is to successfully design this transformation process, to protect employment and to create good and safe jobs.
The opportunities for work and employment that result from digitalisation can be best exploited if employees and their representatives are involved in the introduction and design process at an early stage. Co-determination and collective agreements are an appropriate way to develop good and fitting solutions that consider the economic interests of companies as well as the interests of employees in good working conditions.
The availability of skilled employees with sufficient digital expertise is an important criterion for the success of the digitalisation of the economy. The ‘Baden-Württemberg Skilled Labour Alliance’ (Fachkräfteallianz Baden-Württemberg) is doing much to jointly create the preconditions to secure the availability of skilled labour for the digital economy. Good working conditions, a workplace design conducive to learning and professional development are important factors when it comes to securing the availability of digital experts.
The digital transformation creates additional options for achieving equal opportunities, and company culture 4.0 by increasingly enabling flexible, employee-specific work and career models. Changed requirement profiles and working structures, especially in the MINT professions, offer opportunities to make these professions more attractive and to increase the share of women in jobs.

The qualification and professional development of employees have a key role to play in the transformation process. The framework conditions for determining demand for offers as well as the use and selection of these offers must be improved for both employees and employers. With a view to demand for skilled personnel during the digital transformation, media competence and computer lessons already in schools are already becoming increasingly important. More importantly, however, digital education must be strengthened in the field of vocational training and professional development in order to improve employment opportunities for those currently in jobs and for future employees. Today’s vocational training and professional development schemes must consider the working world of tomorrow. In this context, special attention must also be paid to the development of digital skills of people without an official school leaving qualification and of semi-skilled and unskilled workers. What’s more, suitable measures must be implemented in order to strengthen the digital skills of women and to attract them to MINT professions and specifically digital jobs.
In order to strengthen digital skills in vocational training and professional development, the partners of the education alliance agreed to respond to the current need for action, develop realistic solutions and to communicate the topic of digital change to employers offering training jobs. In this context, it is also important to use the potential of digitalisation as an opportunity to intensify co-operation between vocational schools and employers as places of learning.

A powerful broadband infrastructure is a key precondition for successful digitalisation and hence the future of Baden-Württemberg as a place for medium-sized businesses and innovation. A precondition for the implementation of the gigabit society is an ideally nation-wide optical fibre infrastructure that permits equally powerful Internet access using both land lines and mobile devices. With its broadband initiative, the federal state government therefore supports the development of powerful, reliable and sustainable mobile and cabled networks for its entire territory as well as hybrid solutions as technology mixes to bring the optical fibre closer and closer to the user. In this context, the federal state government also ensures the maximum possible coverage for both urban and rural spaces in order to avoid a digital divide between urban and rural areas.
In the coming years, it is not just millions of smartphones and computers that will be interconnected, but also billions of devices world-wide will communicate with each other. 5G, the mobile radio and network technology of the future, will improve communication significantly. By multiplying data capacity and dramatically cutting response times, 5G will fulfil the future communication requirements of a completely interconnected society to a much greater extent than currently possible. 5G thus creates a vital basis for new applications in smart mobility, industry 4.0, the Internet of things and services in general.

Baden-Württemberg needs digital lighthouses with international reach in the fields of business and research too. These lighthouses are vital with a view to both national and international digitalisation competition and the profile of the federal state of Baden-Württemberg. Digitalisation of the economy is a tremendous opportunity to ensure the federal state’s economic success for the future and to maintain and expand Baden-Württemberg’s currently leading role in international competition. Digital solutions from Baden-Württemberg, for instance, in the fields of Industry 4.0, mobility as well as information and communication technology, are trademarks that can ensure the federal state’s international competitive edge in the future.
However, digitalisation must cover the entire territory of the federal state if the federal state is to be made fit for the future. It is therefore important that the federal state’s enterprises are supported in their digitalisation efforts throughout the state’s territory. This includes access to research institutes, knowledge transfer institutions and suitable consultancy and advisory bodies, not just for existing companies, but also for start-ups.

The digitalisation of the economy means that innovation will become ever more important. This applies to both technical and non-technical innovation (service innovation, new process, organisation and marketing concepts or business models and platforms) and equally to social innovation, i.e. solutions to master urgent social challenges.
New digital technologies, digital business models and new innovation processes, such as open innovation, will become increasingly important. It is also essential to develop and communicate a sovereign approach towards the use of digital solutions. With its well-developed research infrastructure, especially in the field of business-near research, and its dense network of institutions for knowledge transfer, Baden-Württemberg is in a perfect position to support businesses in their digital innovation. The federal state also benefits from its existing cluster structures.
The technology commissioner appointed by the federal state government has the specific task of supporting businesses in their digital innovation efforts.

Baden-Württemberg is famous for the outstanding quality of the federal state’s start-ups which is reflected by higher survival rates of young entrepreneurs compared to their counterparts in other federal states. However, greater start-up momentum is becoming increasingly important as the digitalisation of the economy proceeds. In the digital age, it is more and more young and agile companies with disruptive business models who are driving innovation. However, Baden-Württemberg’s start-up scene cannot be compared to cities like Berlin; instead, it is made up of several regional ecosystems with different technological orientation.
Fierce competition for the best start-ups has long since begun at national and international level. Baden-Württemberg must assume an even more aggressive role in this competition, focus and market its strengths as a start-up federal state and achieve international standing in the development, support and financing of scalable business models.

Numerous surveys confirm that many enterprises still consider IT security to be a major obstacle in the process of digitalising the economy. A state-wide outreach effort is needed now to inform small and medium-sized enterprises and to improve the knowledge transfer from research and between companies. Research in the field of IT and data security must be pursued with determination.
Baden-Württemberg has good preconditions for this, with institutions and initiatives, such as the IT Security Competence Centre, the Digital innovation Centre (DIZ) and the Competence Centre for Applied Security Technology (KASTEL) whose effect will have to be strengthened further. The assessment and transfer of existing security technologies from research to practical application are of particular importance. On top of this, there is considerable demand for qualification measures for employees who as IT users should have security technology skills as well as for special IT security experts. At present, there is a lack of personnel with skills in data protection and security.

The digitalisation of the economy calls for framework conditions that are conducive to investment and innovation, that ensure efficient support for research and development and create sufficient incentives for investment in digital solutions at companies. Especially when it comes to driving digital innovation at medium-sized enterprises, the introduction of tax benefits to promote R&D could be crucial. What is also important is a regulatory framework that ensures fair competition between young start-ups and established companies in the field of labour, tax and competition law as well as consumer and data protection and data use. This is the only way to master the challenges of the sharing economy, for instance, in the hospitality, transport and crafts sectors, and to benefit from the opportunities of a ‘platform economy’. What’s more, an adequate legal framework is also necessary for certain other applications, such as digital mobility and automated driving. Policymakers are called upon to design the economic and legal conditions (for instance, in tax and labour law) together with partners from the business sector, unions, associations and society as a whole in a manner that ensures maximum use of the opportunities of digitalisation with minimum risk.