Managing the Knowledge Deficit in the German Automotive Industry

Abstract

The combined effects of decarbonization and digitalization have had a significant impact on the German automotive industry, with different business models emerging that often involve new business alliances with other automotive companies and technology companies. This rapid and dramatic change momentum has resulted in a “knowledge deficit” in the industry, as regards the skills and know-how required to operate successfully in the digital economy. Using an inductive, qualitative research methodology, based on in-depth interviews with industry experts and practitioners, this article identifies the main areas in which skills, knowledge and competencies are lacking, and assesses the main ways in which the industry is trying to address the problem. A number of emergent issues are also discussed. The article finds that many years of technology outsourcing have left the industry deficient in core technology skills for software development, data management and architecture design, and that new competencies in cybersecurity, platforms and ecosystems, and sourcing management are also urgently needed. The industry is addressing this challenge through a combination of strategies, including major partnership arrangements with the big tech companies. The article concludes that entrepreneurial innovation and radical digital leadership will be required to adequately address the knowledge deficit in the digital era.