Digitalization is increasingly finding its way into the skilled trades. But what role do digital applications and virtual processes already play in skilled crafts businesses? In the aconium interview “5 Answers”, Dr. Alexander Barthel, Head of the Economy, Energy and Environment Department at the German Confederation of Skilled Crafts, explains the challenges and opportunities of digitalization for day-to-day operations and how well thought-out e-government can increase the efficiency of processes.
aconium: What role does digitalization currently play in the skilled crafts sector? In which areas is it already being used in craft businesses?
Dr. Barthel: Firstly, the skilled crafts sector is very diverse. It includes the following areas: Construction and finishing as well as plant engineering, the automotive sector, the food and healthcare trades, industrial suppliers as well as trades for personal use, ranging from hairdressers to goldsmiths. The market relationships between these sectors differ greatly, as do the respective craft services and the technologies used. This has a major influence on the way in which digital tools can be and are used.
On the other hand, the concept of digitalization is also very broad. Here are just a few examples in the skilled crafts context: Almost every trade business uses digital communication such as emails or, in many cases, online stores for sales. Digital measurement, for example using a drone, has become an important digital tool in the construction sector. The construction sector as a whole is also increasingly being shaped by building information modeling. Here, the construction project is digitally modeled throughout and the actual construction activities are then linked to this. 3D printing is used, for example, in model making, in the plant engineering trades, the healthcare trades or even in confectioneries – where new chocolate molds can be created quickly. Some joineries use robotics. 3D scanners are increasingly being used in the healthcare trades, but also by cobblers. “Augmented reality and virtual reality are increasingly being used in electrical and heating engineering and plant construction, for example, as well as in the painting trade and by interior decorators. These are just a few highlights of an extremely diverse reality!
The use of the respective new digital tools depends very much on the respective trade and its value creation processes and the resulting requirements. In contrast, software programs that help to optimize operational processes, for example, are often independent of the trade. This applies, for example, to accounting, order management or the management of personnel, vehicle fleets or warehouses. Digitalization is also making significant inroads into the skilled trades sector in these areas.
Highly innovative new digital approaches are also increasingly coming into focus in the skilled trades: the Internet of Things, blockchain technology and artificial intelligence will be of decisive importance for the future of many skilled trades. Important keywords here are predictive maintenance and remote maintenance. To do this, skilled trades companies need access to the relevant data from cars, agricultural vehicles or technical building systems. This data must be collected, systematized and processed accordingly so that the relevant information can be obtained from the data. At the beginning of the year, the legislator fortunately clarified with an amendment to the Act against Restraints of Competition that craft businesses can obtain access to such data relevant to their business models – of course always in strict compliance with data protection regulations.
aconium: Are there differences in digitalization between large, medium-sized and small companies? What are the challenges of digitalization for small and medium-sized companies?
Dr Barthel: The larger a company is, the greater the specialization of employees is possible, right up to the establishment of separate departments or staff that deal specifically with digitalization issues. The average size of a skilled trade business is around five employees, while a total of 80 percent of all skilled trade businesses have up to 20 employees. In these companies, the business owner has to take care of “everything”, so to speak. In many cases, they only have very limited time to deal with specific digitalization issues in addition to their original work as a craftsman and “boss of the whole thing”. In addition, they often lack the specific detailed skills required to make far-reaching digitalization decisions, such as setting up a suitable company network, ensuring adequate IT security or developing digitally supported new services. Some tradespeople also sometimes lack an understanding of the opportunities and relevance of new digital tools and processes for the future competitiveness of their business.
This is precisely where the Mittelstand-Digital Zentrum Handwerk comes in. This is a BMWi-funded project as part of the “Mittelstand digital” initiative. There are currently digital “showcases” in Oldenburg, Krefeld, Koblenz, Bayreuth and Dresden. Together with the ZDH and the Heinz Piest Institute in Hanover, these are developing materials and other information formats as direct points of contact for skilled trades businesses, with which skilled trades businesses are both made aware of digitalization issues in general and provided with concrete information and specific training opportunities. These offers and concrete operational support in digitalization issues are made available nationwide via the skilled crafts organization with the chambers of skilled crafts and the trade associations as well as via the consultants working there – the technical and business consultants and the innovation and technology transfer officers, some of whom have a special focus on digitalization issues. A look at the website of the Mittelstand-Digital Zentrum Handwerk provides a good overview of its methods, content and activities.
aconium: To what extent can digitalization contribute to improving business processes and communication in craft businesses? What support and information services can companies use to digitize these processes?
Dr. Barthel: In any case, relevant software solutions can help to improve operational processes and internal communication. This is at least the case if they are not isolated solutions, for example for personnel management, but instead the different organizational areas of the company are networked with each other so that, for example, when an order is accepted, the required materials are automatically identified – possibly together with the order from the supplier – and the work plan for fulfilling the order is created. Complete digital construction site management is another sophisticated example.
The great advantage of such comprehensive digital approaches is that the information relevant to decision-making can actually be made available to everyone involved in the respective process and the necessary work steps can be initiated. However, as tradespeople are often active on construction sites or at customers’ premises, this also requires the use of mobile devices.
The major challenge for many companies, however, is that they first need to gain clarity about the operational work steps with their ramifications and interdependencies, information flows and respective participants before the respective software is then set up: Who needs to know what, when and where, and in what context? Even in this conceptual phase, the planned digitization of organizational processes can often reveal some internal optimization potential.
aconium: To what extent are training courses on digital applications, such as management software, already being offered and used in craft businesses?
Dr. Barthel: Local chambers of crafts, trade associations and guilds offer numerous training courses on how to use new digital tools: These range from drone driving licenses to the use of CAD/CAM solutions, for example in metalworking or carpentry businesses. The business consultants of the skilled trades organization are also continuously trained so that many of them can offer practical support to companies. It is also important to remember that training and further education in the skilled trades sector is always geared towards teaching the latest new technologies.
In the case of software solutions aimed at digitally supporting and optimizing operational processes, on the other hand, it is usually the respective software houses that have developed the corresponding program solutions and bring them to market. As a rule, they are the ones who provide their customers with the necessary information or training so that their products can be used in a targeted manner on site.
aconium: What is your vision of e-government in the skilled trades of the future?
Dr Barthel: The answer here should really be about e-government in the literal sense, i.e. innovative processes and methods for digitizing the administrative activities of the public sector, especially in relation to skilled trades businesses. Digitalization also offers considerable efficiency and acceleration benefits here. However, the development of this area has often suffered, at least to date, from the fact that there is no real common understanding among the various federal levels or at the individual levels – and especially at state and municipal level – as to whether and how this should be done. In this context, we have high hopes for the Online Access Act planned for next year.
Unfortunately, the coronavirus pandemic is currently making it very clear that the level of digitalization in public administrations is still far from meeting the requirements of day-to-day operations and business activities, for example when processing building applications, scaffolding permits, vehicle registrations or death certificates. In many cases, this impairs the service provision of craft businesses. The digitalization of administrative activities therefore urgently needs to be expanded and strengthened – in terms of technology, procedures and the expertise of those working in the administration.
For eGovernment to actually work, appropriate nationwide standardization is also necessary, as well as suitable interfaces with each other and with the “administrative customers”. It must also be borne in mind that the introduction of new digital processes and methods in administrative activities must actually make things easier for companies. Under no circumstances should new requirements be defined for companies in e-government that lead to additional burdens compared to the status quo.
One more thing about the coronavirus crisis and the digital innovation boost it has triggered: the skilled trades organization – i.e. the chambers of skilled trades and the skilled trades associations, the guilds and the local district skilled trades associations – is itself currently working hard to implement digital solutions in the area of securing skilled workers for the skilled trades. This concerns new formats and methods of digital learning, digital examinations, digital career guidance and employee recruitment.
This goes hand in hand with the digital “upgrading” of our inter-company training centers, both in the classrooms and in the training workshops. The skilled trades see themselves as the “trainers of the nation” and also want to be pioneers in this area.