Artificial intelligence: IW study sees great potential in AI for Germany’s industry

The use of generative artificial intelligence (AI) could bring high profits to the manufacturing industry in Germany. This emerges from a study by the research institute IW Consult on behalf of Google. According to this, gross value added in the manufacturing sector could be increased by up to 7.8 percent through generative AI, which corresponds to a total increase of 56 billion euros. Gross value added is the added value created in the production process, i.e. the total value of the goods and services minus intermediate payments.

Generative AI is a variant of artificial intelligence that can be used to create (“generate”) new, original content. With the help of algorithms and so-called language models, content such as texts, images and videos, but also music or program codes, can be generated. The specifications for the AI ​​system do not have to be programmed, but can be transmitted in natural language.

Jobs of academics and office workers are particularly affected

According to the study by the subsidiary of the German Economic Institute (IW) in Cologne, academics and office workers in particular have to prepare for major changes in their work caused by AI. In the manufacturing sector, there are around 0.6 million employees for whom AI is expected to have a strong impact on their work. For another 4.1 million employees, generative AI could support their own work, for example in optimizing program codes or stimulating ideas in product design.

However, AI will be used much less frequently in everyday classic industrial jobs such as repair or maintenance work. According to the study, these approximately 3.3 million jobs cannot be automated or can only be automated with difficulty using AI. This affects around 41 percent of all jobs in the manufacturing sector.

The manufacturing industry is one of the most important economic sectors in Germany. According to IW, the added value in this area is 781 billion euros and almost eight million employees. Compared to other industrialized countries, the manufacturing sector’s share of overall economic value creation in Germany is significantly higher at more than 20 percent and is almost twice as high as in Great Britain or the USA. For the entire economy, the possible value creation using AI is estimated at 330 billion euros.

This article will continue to be updated.