NRW mechanical engineering under pressure: The new study shows the need for action, opportunities and clear recommendations for companies and politicians – for innovation, competitiveness and sustainable growth.
Need for action and opportunities – recommendations for companies and politicians
The study shows: With around 200,000 employees, 40 global market leaders and an annual turnover of around 54 billion euros, mechanical and plant engineering is the largest industrial sector in North Rhine-Westphalia, but the industry is under considerable competitive pressure and faces operational and strategic challenges in order to maintain its role as a growth driver. The EU, federal and state governments must ensure reliable framework conditions.
Key findings of the IW study
Between 2015 and 2023, the mechanical and plant engineering sector in NRW grew more slowly than the national average. Employment declined slightly and foreign sales developed below average. At the same time, the industry is highly innovative and technologically strong, but many potentials remain untapped. Mechanical engineering companies are affected by locational disadvantages in international competition, such as high costs, bureaucracy and infrastructure deficiencies.
Recommendations for action for the mechanical engineering sector in NRW
The study identifies four future trends that the mechanical and plant engineering industry must overcome:
- Changes in the world of work
- Challenges and opportunities through digitalisation
- Transformation towards decarbonisation, energy efficiency and sustainability
- Global competitive pressure (trade policy conflicts and Chinese competitors)
The study provides companies with specific recommendations for successfully addressing these future trends:
- Actively shape the supply of skilled labour: Companies should adapt their HR strategies, invest in training and further education and cooperate with educational institutions in a targeted manner.
- Use digitalisation strategically: Accept the challenge of digitalisation actively and not wait and see. Develop targeted business cases for digitalisation. Manufacturing-X offers opportunities for data-based business models.
- Exploit the potential of green tech: Sustainable products and processes offer new market potential. The industry should make greater use of existing funding programmes for ecological innovations and become involved in circular economy networks.
- Rethink export strategies: Identify new markets and adapt competitive strategies.
Recommendations for action for the EU, the federal government and the state of NRW
Companies need favourable, reliable and competitive framework conditions. In order to strengthen the competitiveness of the sector, the EU, the federal government and the state are therefore called upon to organise the economic framework conditions in such a way that barriers are removed and companies can better develop their potential:
EU
- Continue to push ahead with trade agreements to strengthen access to foreign markets
- Strengthen the EU single market
- Implement a reduction in bureaucracy
Federal government
- Limit or reduce cost burdens for companies (taxes, social security contributions, bureaucratic costs)
- Improve transport infrastructure, speed up planning procedures
- Further develop funding instruments
NRW
- Reform trade tax (structure municipal financing so that high rates of assessment are no longer necessary)
- Structure funding landscape (bundle programmes, increase transparency)
- Strengthen innovation ecosystem (better network research institutions and companies)
Role of Cluster ProduktionNRW
As part of the state’s regional innovation strategy, there is a cluster strategy in which the ProduktionNRW cluster supports mechanical engineering. The study recommends that the cluster plays a central role in securing the future of mechanical engineering, as an
- Information guide: target group-orientated information for the industry,
- Networking platform: initiate cooperation. Making partners visible,
- initiator: recognising trends and deriving and developing recommendations for action,
- service provider: Provide tools for export analyses, funding advice and innovation support.
You can view the complete study here: