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Uwe Winkelhake
The Digital
Transformation
of the Automotive
Industry
Catalysts, Roadmap, Practice
Second Edition
The Digital Transformation of the Automotive
Industry
Uwe Winkelhake
The Digital Transformation

of the Automotive Industry
Catalysts, Roadmap, Practice
Second Edition
Uwe Winkelhake
Heidelberg, Germany
ISBN 978-3-030-83825-6 ISBN 978-3-030-83826-3 (eBook)

https://doi.org/10.1007/978-3-030-83826-3
Originally published in German language by SpringerVieweg, Wiesbaden, 2021
Translation from the German language edition: Die digitale Transformation der Automobilindustrie by
Uwe Winkelhake, © Uwe Winkelhake 2021. Published by SpringerVieweg. All Rights Reserved.
1st edition: © Springer International Publishing AG 2018
2nd edition: © Springer Nature Switzerland AG 2022
This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of
the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation,
broadcasting, reproduction on microfilms or in any other physical way, and transmission or information
storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology
now known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication
does not imply, even in the absence of a specific statement, that such names are exempt from the relevant
protective laws and regulations and therefore free for general use.
The publisher, the authors and the editors are safe to assume that the advice and information in this book
are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or
the editors give a warranty, expressed or implied, with respect to the material contained herein or for any
errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional
claims in published maps and institutional affiliations.
This Springer imprint is published by the registered company Springer Nature Switzerland AG
The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
Preface to the Second Edition
More than three years have passed since the publication of this book’s first edition,
also in English and Mandarin languages. From a digitalisation perspective and in
times of exponential development, this is a quite considerable period of time during
which the transformation of the automotive industry has made advances in numerous
projects and initiatives. Unfortunately, climate change has also progressed massively.
Very hot summers in Central Europe, devastating bush fires in Australia and melting
ice on the polar ice caps made it clear to everyone that the set climate targets can only
be achieved through a fundamental change in the entire economy and private habits.
Climate change is also challenging the car industry with targets for climate-neutral
production, company operations and particularly low vehicle emissions, which, in
turn, are accelerating electric drives and new mobility concepts as well.
Tesla continues to be the benchmark in the transformation of the automotive
industry, for example, in online retailing, over-the-air software updates and the
coupling of vehicle mechanics with IT. Many companies have started initiatives
to catch up. Every manufacturer is offering electric vehicles, looking for a new
approach to vehicle retailing and pursuing projects to digitise business processes.
The development of autonomous driving led by Waymo and Baidu is accelerating,
along with the growth of mobility services with Didi and Uber at the forefront and
an integrated ecosystem with new business areas around data and artificial intelli-
gence. In aftersales, these trends are reducing the traditional business base and we
can expect platforms to form the basis of new business structures in this sector too.
The disruption of the industry is gathering momentum.
Manufacturers and suppliers have to counteract and change comprehensively in
order to survive. The basis for transformation should still be an integrated roadmap
for a profound change programme, supported by a powerful IT environment and
a corporate culture characterised by entrepreneurship and a start-up mentality. All
these topics are addressed in this book. The structure of the first edition has proven
itself and has been retained. In terms of content, all chapters have been completely
revised and in large parts supplemented with current practical examples, studies and
references. The outlook at the end of the book beyond the year 2040 has been adapted
and the expected changes in the world of work have also been looked at.
v
vi Preface to the Second Edition
I received a great deal of support in the preparation of this book, for which I would
like to express my sincere thanks. Unfortunately, my long-time mentor and initiator
of the book, Prof. Wiendahl, has meanwhile passed away. He was an enthusiastic
supporter of the structured and comprehensive recommendations for action and had
in his lifetime still encouraged me to write this update. So, I have been thinking
of him frequently while working on it and thank him again for his impulses. Mr.
Thomas Lehnert of the Springer-Verlag publishing house also promoted the new
edition unconditionally and I thank Ms. Ulrike Butz, the editor, for her diligent
supervision of the production. I also thank Peter Albert and his team from AVALON
Linguistic for the great translation support in the preparation of this book.
The automotive industry is under massive pressure for change. In order to manage
this successfully, the established companies must lead the way with speed, agility,
innovativeness and a willingness to take risks. In view of the increasingly rapid devel-
opment, implementation should be accelerated in order to maintain competitiveness
and the hesitant approach that still frequently occurs must be stopped. Hopefully, this
would prevent some of the predictions according to which the “established Goliaths”
do not stand a chance in the face of disruptive changes and that therefore it might
always be the David who emerges as the winner.
Heidelberg, Germany Uwe Winkelhake

May 2021
Contents
1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Digitisation—A Hot Topic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 IT Development—The Exponential Function Explodes . . . . . . . . 3
1.3 Transformation of the Automotive Industry . . . . . . . . . . . . . . . . . . 4
1.4 Structure of the Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.5 Defining Focus and Readership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2 Information Technology as Driver of Digitisation . . . . . . . . . . . . . . . . . 9
2.1 Moore’s Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.2 Exponential Growth also for Digitisation . . . . . . . . . . . . . . . . . . . . 11
2.3 Energy Requirement of IT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.4 IT Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.5 Handling of Personal Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.6 Powerful Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.7 Technology Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.7.1 3D Chip Architectures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.7.2 Flow Batteries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.7.3 Carbon Nanotubes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.7.4 Neuronal Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.7.5 Quantum Computer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.8 Technological Singularity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3 “Digital Lifestyle”—Future Employees and Customers . . . . . . . . . . . 29
3.1 Always on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.2 Mobile Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.3 “Real Time” Expectation in the Mobile Ecosystem . . . . . . . . . . . . 34
3.4 Sharing Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.5 Start-Up Mentality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3.6 Innovative Work Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.6.1 Digital Nomads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.6.2 Crowdsourcing and Liquid Workforce . . . . . . . . . . . . . . . 40
vii
viii Contents
3.6.3 Wikinomics—New Ways of Cooperation . . . . . . . . . . . . . 41

3.7 Google—The Goal of the Digital Natives . . . . . . . . . . . . . . . . . . . . 42
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
4 Technologies for Digitisation Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.1 IT Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.1.1 Cloud Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.1.2 Big Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4.1.3 Mobile Applications and Apps . . . . . . . . . . . . . . . . . . . . . . 55
4.1.4 Collaboration Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
4.1.5 Cognitive Computing/Artificial Intelligence . . . . . . . . . . 59
4.1.6 Quantum Computing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
4.2 Internet of Things . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
4.3 Industry 4.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
4.4 3D Printing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
4.5 Virtual and Augmented Reality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
4.6 Wearables and Beacons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
4.7 Blockchain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
4.8 Robotics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
4.8.1 Industrial Robots . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
4.8.2 Process Robots . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
4.9 Drones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
4.10 Nanotechnology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
4.11 Gamification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
5 Vision Digitised Automotive Industry 2030 . . . . . . . . . . . . . . . . . . . . . . 85
5.1 Development of the Automotive Market . . . . . . . . . . . . . . . . . . . . . 87
5.2 Future Customer Expectations in the Passenger Car Area . . . . . . 88
5.3 Digitisation Status in the Automotive Industry . . . . . . . . . . . . . . . . 92
5.4 Vision Digitised Automotive Industry . . . . . . . . . . . . . . . . . . . . . . . 96
5.4.1 Mobility Services Instead of Vehicle Ownership . . . . . . . 98
5.4.2 Connected Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
5.4.3 Autonomous Driving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
5.4.4 Electromobility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
5.4.5 Centralised Embedded IT Architecture . . . . . . . . . . . . . . . 111
5.4.6 Prototype-Free Processor-Based Development . . . . . . . . 117
5.4.7 Internet-Based Multichannel Distribution . . . . . . . . . . . . . 119
5.4.8 Digital Transformation in Aftersales . . . . . . . . . . . . . . . . . 123
5.4.9 Digitised Automotive Banks . . . . . . . . . . . . . . . . . . . . . . . . 127
5.4.10 Flexible Production Structures/Open
Networks/Industry 4.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
5.4.11 Automated Business Processes . . . . . . . . . . . . . . . . . . . . . 132
5.4.12 Cloud-Based IT Services . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
5.5 Case Studies—Strategy and Approach to the Digital
Transformation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
Contents ix
5.5.1 Status of Transformation at General Electric . . . . . . . . . . 137

5.5.2 The Volkswagen Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
6 Roadmap for Sustainable Digitisation . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
6.1 Digitisation Roadmap as Part of Company Planning . . . . . . . . . . . 147
6.1.1 Assessment of Market Potential and Customer
Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
6.1.2 Adaptation of the Company Strategy . . . . . . . . . . . . . . . . 152
6.1.3 Business Model and Lean Enterprise . . . . . . . . . . . . . . . . 156
6.1.4 Digitisation Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
6.2 Roadmap for Digitisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
6.2.1 Roadmap Connected Services and Digital Products . . . . 165
6.2.2 Roadmap Mobility Services and Autonomous
Driving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
6.2.3 Roadmap Processes and Automation . . . . . . . . . . . . . . . . 181
6.2.4 Roadmap Customer Experience, Sales
and Aftersales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
6.3 Overview Roadmap and KPIs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202
7 Corporate Culture and Organisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207
7.1 Communication and Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208
7.2 Agile Project Management Methods . . . . . . . . . . . . . . . . . . . . . . . . 213
7.2.1 Design Thinking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215
7.2.2 Scrum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217
7.3 Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219
7.4 Resourcing for Digitisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221
7.4.1 E-learning as the Base for Digital Education . . . . . . . . . . 222
7.4.2 New Ways of Learning . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224
7.4.3 Knowledge Management . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
7.4.4 Hiring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
7.5 Forms of Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229
7.6 Open Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231
7.7 Organisational Aspects of Digitisation . . . . . . . . . . . . . . . . . . . . . . . 235
7.7.1 CDO—Chief Digital Officer and Chief Data
Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236
7.7.2 Adaptation of the IT Organisation . . . . . . . . . . . . . . . . . . . 239
7.7.3 New Job Roles and Career Models . . . . . . . . . . . . . . . . . . 242
7.7.4 Change Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245
7.8 Transformation IBM—Continuous Transformation . . . . . . . . . . . . 247
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251
x Contents
8 Information Technology as an Enabler of Digitisation . . . . . . . . . . . . . 257

8.1 IT Transformation Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258
8.2 Building Blocks of an IT Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . 259
8.3 Cost and Benefit Transparency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262
8.4 Transformation Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263
8.4.1 Evolution of Application Environment . . . . . . . . . . . . . . . 264
8.4.2 Microservice-Based Application Development . . . . . . . . 269
8.4.3 Data—Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272
8.4.4 Strategy for Mobile Devices . . . . . . . . . . . . . . . . . . . . . . . . 275
8.4.5 Infrastructure Flexibilisation Through
Software-Defined Environment . . . . . . . . . . . . . . . . . . . . . 278
8.4.6 Multicloud Structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280
8.4.7 Computing Centre Consolidation . . . . . . . . . . . . . . . . . . . . 282
8.4.8 Business-Oriented Security Strategy . . . . . . . . . . . . . . . . . 284
8.4.9 Security of the Factory IT and Embedded IT . . . . . . . . . . 287
8.5 Case Studies on IT Transformations . . . . . . . . . . . . . . . . . . . . . . . . . 291
8.5.1 Transformation Netflix . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291
8.5.2 Transformation General Motors . . . . . . . . . . . . . . . . . . . . . 295
8.6 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299
9 Examples of Innovative Digitisation Projects . . . . . . . . . . . . . . . . . . . . . 305
9.1 Digitisation Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 305
9.2 Connected Services/Digital Products . . . . . . . . . . . . . . . . . . . . . . . . 307
9.3 Mobility Services and Autonomous Driving . . . . . . . . . . . . . . . . . . 315
9.4 Efficient Processes and Automation . . . . . . . . . . . . . . . . . . . . . . . . . 320
9.5 Customer Experience—Marketing, Sales, Aftersales . . . . . . . . . . 330
9.6 Corporate Culture and Change Management . . . . . . . . . . . . . . . . . 336
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341
10 Car Mobility 2040 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347
10.1 Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348
10.2 Electric Drive and Autonomous Driving . . . . . . . . . . . . . . . . . . . . . 349
10.3 Market Shift . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350
10.4 Mobility Services and Vehicle Equipment . . . . . . . . . . . . . . . . . . . . 351
10.5 Innovative process- and Production Structures . . . . . . . . . . . . . . . . 352
10.6 Day-in-a-Life of a “Liquid Workforce” . . . . . . . . . . . . . . . . . . . . . . 353
10.7 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 357
Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359
Chapter 1
Introduction
The topic of “digital transformation” substantiates the fundamental change in private

and business processes, driven by the exponentially increased performance of infor-
mation technology. For the automotive industry as one of Germany’s key industries,
this results in an existential challenge both for the strategic orientation towards new
mobility services as opposed to vehicle ownership and for new ways of distribu-
tion. In addition, there are also highly efficient business processes such as Industry
4.0-based production, which are briefly outlined. Finally, there is an explanation of
the essential elements which lead to a successful transformation of the automotive
industry and determine the structure of this book.
1.1 Digitisation—A Hot Topic
The subject of “digitisation” is a key issue in all companies—often driven by the fear
of overlooking a potential attack on the traditionally established business by new
entrants from Silicon Valley based on the platform economy. Who would like to be
just left behind like Kodak, Nokia, or the many video stores? Such attacks—bringing
“disruption” to established business models—are to be repulsed. The challenge is to
recognise the potential of new digitised business models as early as possible and to
integrate them into the own company in a transformation process. Responsiveness
and creativity are of the essence. Even if it does probably not involve a completely new
business model right away, digitisation should at least though achieve a noticeable
increase in process efficiency and help to sell more products, for example through
deepened customer insight and comprehensive evaluation of social media data, or also
availing of new digitised distribution channels providing a new customer experience.
The need to survive, as well as the prospect of higher profits and revenue, rightly
put the subject of digitisation at the top of the agenda in today’s businesses. This is
underpinned by Fig. 1.1 which shows the results of a survey [Sto16].
© Springer Nature Switzerland AG 2022 1

U. Winkelhake, The Digital Transformation of the Automotive Industry,
https://doi.org/10.1007/978-3-030-83826-3_1
2 1 Introduction
Fig. 1.1 Cross-departmental corporate objectives for Digital Transformation (Transformation-

swerk 2016)
In addition to these objectives, many companies consider the potential of digi-

tisation as a means of improving customer satisfaction and thus increasing sales
opportunities, opening up new markets and implementing product innovations. Thus
it is obvious to all parties and stakeholders in the companies that something is to be
done—yet what is it? Many engage with the issue of digitisation and launch initia-
tives and projects. However, there is a lot of uncertainty about how to proceed, what
to do and how deeply and comprehensively to implement changes. Occasionally, at
this stage already doubts are cast which suspect “old wine in new wineskins” behind
the keyword of digitisation and recommend calm in the form of compact projects. To
demonstrate at least some actionism, for example, the replacement of paper-based
order documents is addressed by iPad-based visualisation.
Based on the author’s considerable experience, it is profoundly wrong to just
garnish existing processes “as is” with some IT and aim to get on top of the subject
of digitisation this way. We are at the beginning of a “tsunami” that will strike all
industrial enterprises—associated with high risks, but also with immense new oppor-
tunities. It is safe to assume that everything which can be networked and automated
with the help of digitisation, will in fact be penetrated—it is just a matter of time.
Therefore, with any idea of digitisation, it is imperative to begin by fully scrutinising
present and so far well-proven business models, processes and the organisation. The
topic of digitisation is then to be approached in-depth and in a sustainable way based
on a compelling vision and business strategy derived from this—not simply as a
single project, yet rather as a continuous process of transformation.
1.2 IT Development—The Exponential Function Explodes 3
1.2 IT Development—The Exponential Function Explodes
The digitisation will affect all companies vehemently simply due to the fact that
more and more powerful and inexpensive information technologies become available
as drivers. This kind of explosion can best be explained by a brief review of the
development of IT. The performance and thus the penetration of business and private
processes with information technology (IT) solutions follows an exponential function
[Kur06]. Reminder: an exponential function goes first in a gradual, almost linear
increase and then after a curve assumes a massive surge within a short time, the
exponential growth.
During the first linear climb, after the Second World War until the 1970s, company-
specific software programmes written by specialists in FORTRAN or COBOL were
implemented via punch cards on the computer systems in the corporate data centres.
Selected users, specialists of their business function, were trained for the operation of
the programmes. In the first increase in growth, which saw the spread of computers in
the 1980s and ‘90s, almost all jobs in business management and administration were
equipped with IT solutions and typewriters were replaced by word processor appli-
cations and printers. Standard software solutions to support processes spread as
well. Originally, IBM had dominated the market for the production industry with
COPICS, then SAP evolved into the de facto standard in the area of ERP solutions.
Almost all private households used Windows PCs for word processing or spreadsheet
programmes for private administration tasks.
In the late 1990s, the use of the Internet expanded, eBay became a platform for
private and increasingly also the professional trade and Amazon in the last decade
within a short time first became the world’s largest bookseller and then also the
dominant retailer, today is a leading cloud services and logistics provider as well.
Solutions were used widely to book overnight stays or theatre seats and the term of the
so-called platform economy became popular. Many have already booked new forms
of accommodation via Airbnb. The development of digitisation, from the author’s
point of view, at that time already entered the “curve” of the exponential function,
in enterprises as well as in private households.
With Apple’s introduction of the iPhone in 2007 and its extremely rapid worldwide
penetration and acceptance, the above mentioned exponential function of IT enters
the phase of a massive surge. This is underpinned by the introduction and high
acceptance of other mobile devices such as Android smartphones and the success of
tablets which are gradually replacing PC’s and notebooks as full-fledged computers.
An impressive example of virtually leapfrogging developments is the rapid spread
of the Chinese TikTok application. Launched in 2016, this short video platform now
has more than two billion downloads at a market capitalisation of 75 billion dollars
[Lob19].
4 1 Introduction
1.3 Transformation of the Automotive Industry
This development which is just briefly outlined here, will continue at an accelerated
pace and cause substantial upheavals in all companies and also private processes.
The automotive industry is being affected in particular. This industry is facing several
changes at the same time:
• Electric drive technology
• Autonomous driving
• Transformation of the business model from a vehicle manufacturer to becoming
a mobility provider
• Digitisation of the vehicle—Connected Services; Software-oriented configuration
• Evolution of cars into a driving IoT device, “always on” and connected to the
environment, as well as fully integrated into the “digital experience” of the
customer.
• Multiple distribution channels—from the centric importer/distributor to customer
centric direct sales partners
• Use of the digitisation for process automation
• Overarching value chains: intermodal transport—electricity supplier—service
provider
• Change of market behavior with focus from vehicle ownership to mobility on
demand.
In addition to these already very complex topics, there is another massive challenge
facing us all. Since the publication of the book’s first edition, the issue of climate
change has gained outstanding importance. Very hot summers in Central Europe,
devastating bush fires in Australia and melting ice on the polar ice caps have made it
clear to everyone that the climate targets set can only be achieved with a fundamental
change in the entire economy and private habits. Details on this extreme situation,
risks and impacts are detailed in many studies [Wef20, Woe20]. Climate change also
challenges the car industry with targets for climate-neutral production, company
processes and particularly low vehicle emissions, which in turn accelerate electric
drives and new mobility concepts to increase the utilization rate of cars.
These foreseeable changes highlight that the automotive industry is currently
having to reinvent itself. Namely, the established manufacturers are being challenged
and under intense time pressure in the transformation, because new competitors push
into the market, which is free of any “inherited burdens” and can have a fully digitised
flying start with new structures “born on the web”. The aggressive new entrants often
focus on new technologies, such as the electric drive based on a “lean car-IT set-
up”. The established companies find it particularly hard to aggressively implement
the new requirements because this often comes at the expense of existing products
and established structures [Wes12]. The initial success and the market response of
Tesla Motors which was founded in 2007 are quite impressive. After the produc-
tion ramp-up in the main plants has been successful, even with a broader model
range in the USA, the first Tesla plant is now in production in Shanghai and Elon
1.3 Transformation of the Automotive Industry 5
Musk after a record time build-up is pushing for the start of production of a new plant
in Potsdam. Further companies are already forming in the shape of the Alphabet
subsidiary Waymo in California and especially in China with the entry of the online
retailer Alibaba and the search engine provider Baidu into the car business. These
companies have announced to offer driverless cars. It certainly remains to be seen
how these newcomers will develop, however, these challengers definitely represent
a threat to established car manufacturers with their current business model. In addi-
tion, new competitors cavort in the future business focus of mobility providers, which
will make it extra difficult to producers to make a difference in the market and still
dominate it. All automotive providers will be aware of this challenging situation so
that the results of a KPMG survey of mayor industry trends as shown in Fig. 1.2 do
actually not surprise.
As in the 2016 KPMG survey cited in the first edition of this book, the current study
also rates digitalisation and alternative drive technologies as key trends. There is no
alternative for the automotive industry to vigorously embracing the impending funda-
mental changes with momentum and to turning potential threats into opportunities
through proactive action. In doing so, current and aggressively prognosticated tech-
nological possibilities are to be involved, operating hand in hand with modern, highly
flexible and efficient IT structures. It is precisely in this synergetic approach where
the highest optimisation potentials are found. Nevertheless, digitisation projects are
Fig. 1.2 Global automotive executive key trends until 2030 (KPMG)
6 1 Introduction
currently often approached just one-dimensionally as islands. Further obstacles lie

in the traditional project management and budgeting methods and, in many cases,
also in a lack of change culture and the incomplete expertise of the team.
In the future, Industry 4.0 for instance will be part of the digitisation strategy with
the aim of highly automated production processes, in which robots directly cooperate
with employees. The requirements for modern IT structures to be derived from these
thematic fields lead to hybrid cloud architectures in order to achieve digitisation in a
targeted and cost-effective manner. The required talents to handle these projects are
often not available.
The topic of digitisation must also be looked at from the product angle of
view. What does autonomous driving or the conversion of vehicles into “driving
IP addresses” mean as part of a global “Internet of Things”? How can you master
the masses of data from the vehicles, business processes and customer activities in
order to turn these into business benefits and competitive advantages? How should
you protect yourselves against new market participants from the IT environment,
use long-standing traditional experiences and thus emerge stronger from the trans-
formation? How can vehicle mechanics and more and more IT be amalgamated?
Volkswagen, for example, has set up an organisation known as CARIAD to promote
this fusion and to exploit the resulting opportunities. This organisation is responsible
for making cars the most important “mobile device” in the future, in order to help
turn the Volkswagen Group into a “digital tech group” that will have a promising
future [Die20].
1.4 Structure of the Book
Against this background, this book addresses many of the common shortcomings
in implementation and problems and a methodically sound and well-tried guide
to the implementation of digitisation in the automotive industry is developed, thus
ensuring the competitiveness of this key industry in the long run. Comprehensive
and pragmatic recommendations for action in the automotive and supplier industries
are pointed out to shape the transition from the discrete vehicle-focused business
model to a continuous and mobility-oriented model. The path to automatic, highly
efficient handling of lean, integrated business processes is discussed, as is addressing
the massive change in sales, aftersales and marketing structures and the new way of
managing customer relationships. Under this objective, the book is divided into 4
blocks:
Block 1 with Chap. 2–4: Drivers IT Technology, Digital Natives, Technology for
Digitisation
To understand why there is no alternative to dealing intensively with the topic

of digitisation and also to assess future potentials, starting from Moore’s Law on
Nanotechnology up to Singularity, an outlook is given on the future development
1.4 Structure of the Book 7
of IT technology. It is important to understand future customers and at the same

time future employees in their behaviour, their expectations and interaction. This
topic is explained in one chapter as well as in the following chapter the technologies
important for future consideration, both on the IT side and complementary such as 3D
printing, Wearables, or new concepts such as additive manufacturing and Blockchain
for instance.
Block 2 with Chaps. 5 and 6: Vision Automotive 2030; Roadmap Digitisation
In this block, a vision or rather an outlook on the automotive industry in the year
2030 is developed. For this purpose, “software defined vehicles”, Internet-based
sales and also service platforms for administrative services are highlighted. This
provides a comprehensive background from which to make recommendations for the
development of a concrete roadmap on how to implement a targeted digitalisation
strategy, drawing on a brief review of the current situation. The recommendations
are derived from concrete project experience and case studies.
Block 3 with Chaps. 7 and 8: Corporate culture; Flexible IT structures
Prerequisite for a successful implementation is a transformation culture with lead-

ership exemplarily communicated by the board, accompanied by appropriate incen-
tives as well as the necessary basic training of employees and the use of innovative,
agile implementation methods in the projects. Another important prerequisite for
successful implementation of digitisation strategies is efficient and flexible IT struc-
tures. These have to be designed in such a way that they meet the needs of the business
appropriately and react swiftly. Hybrid cloud architectures as well as the consider-
ation of open standards along with effective security concepts and requirements for
data storage are the basis for successful digitisation projects.
Block 4 with Chaps. 9 and 10: Implementation Examples, Outlook 2040,
Conclusion
In the fourth and final block of the book, current implementation examples are
presented, challenges of the implementation pointed out and a short outlook on
the automotive industry in the year 2040 is given.
1.5 Defining Focus and Readership
The book provides recommendations for the development and implementation of

digitisation strategies for the automotive industry with a focus on manufacturers and
distributors of cars and vans. This means that the largest market or rather enter-
prise sector of this industry is addressed. With some limitations, the advice is also
relevant to other manufacturers (trucks, commercial vehicles, special machines,
manufacturing) and suppliers. Within the covered segment, both make-to-stock
producers, who are mostly found in the USA and Japan and contract manufacturers
8 1 Introduction
are addressed. The second field in particular will see growth in the course of more
refined customer segmentation and increasing individualisation.
The book is aimed at executives from all business sectors of the automotive and
supplier industries, as well as research institutes and consultancies, plus students
of production and business science who are interested in taking up the topic of
digitisation.
References
[Die20] Diess, H.:Volkswagen steht mitten im Sturm (Volkswagen is in the centre of a storm).
Manager Magazin, 18 Jan 2020. https://www.manager-magazin.de/unternehmen/autoin
dustrie/volkswagen-wortlaut-rede-herbert-diess-16-01-2020-radikal-umsteuern-a-130
4169.html. Drawn: 20 Jan 2020
[Eld19] Eldracher, M.: Digitale Agenda 2020 - Unternehmen Zukunft (Digital Agenda 2020—
Enterprise Future); DCX Studie 2019. https://assets1.dxc.technology/de/downloads/
DXC_Digitale_Agenda__Deutsch_Druck_final.pdf. Drawn: 20 Jan 2020
[KPM19] KPMG: KPMG’s Global Automotive Executive Survey 2019. https://automotive-ins
titute.kpmg.de/GAES2019/downloads/GAES2019PressConferenceENG_FINAL.PDF.
Drawn: 20 Jan 2020
[Kur06] Kurzweil, R.: The Singularity Is Near: When Humans Transcend Biology. Vicing
Penguin, New York (2005)
[Lob19] Lobe, A.: TikTok ... hinter den lustigen Videos tickt eine Datenbombe
(TikTok ... a data bomb is ticking behind the funny videos); Medien-
woche 12.11.2019; https://medienwoche.ch/2019/11/12/tiktok-hinter-den-lustigen-vid
eos-tickt-eine-datenbombe/. Drawn: 20 Jan 2020
[Sto16] Stoll, I., Buhse, W. (Hrsg.): Transformationswerkreport 2016 (Transformation Work
Report 2016), http://docplayer.org/37404976-Transformationswerk-report-2016.html.
Drawn: 20 Feb 2020
[Wef20] Global risk report 2020; Insight report 15th edition; https://www.weforum.org/global-
risks/reports. Drawn: 20 Feb 2020
[Wes12] Wessel, M., Christensen, C.M.: Surviving disruption. Harvard Bus. Rev. (2012)
[Woe20] Woetzel, J., Pinner, D., Samandari, H., et al.: Climate Risk and Response. McKinsey
Global Institute (2020). https://www.mckinsey.com/business-functions/sustainability/
our-insights/climate-risk-and-response-physical-hazards-and-socioeconomic-impacts.
Drawn: 20 Jan 2020
Chapter 2
Information Technology as Driver
of Digitisation
Driven by the extreme increase in the efficiency of information technology (IT), the
digitisation wave keeps approaching us unstoppably and ever faster. The so-called
Moore’s Law, which more than 50 years ago has already described a doubling of
the capacity of integrated circuits over a period of 12 months [Moo65], has been
synonymous with the ongoing massive increase in the performance of IT. If the
basic technology was not changed, this law would no longer be valid. However,
due to technological leaps, the principle of exponential growth in performance still
applies. There don’t appear to be technological limits and it is only a matter of time
until human intelligence will be overtaken by “machine intelligence” and so-called
singularity be reached.
In order to understand this situation and to prove why digitisation is proceeding at
an unstoppable pace and will dramatically change our private and business processes,
this chapter first explains the fundamentals of IT development. Subsequently, the
subjects of IT security and energy demand are highlighted as potential develop-
mental impediments. The conclusion of the chapter is the concept of technological
singularity with a somewhat more visionary outlook.
2.1 Moore’s Law
In April 1965 Gordon Moore described in an expert article an observation on inte-

grated circuits [Moo65]. He noted that the number of transistors on a silicon chip regu-
larly doubled with minimal component costs at a fixed time interval. As a result, the
computer performance increases exponentially without the costs increasing as well.
The underlying period has since then been adjusted several times due to changes in the
technological framework conditions. The basic explanation for exponential growth,
however, continues to apply—nowadays usually within a period of 18–24 months.
The basic context is illustrated in Fig. 2.1 which shows the number of transistors in
different process types in logarithmic representation and thus as a straight line over

https://doi.org/10.1007/978-3-030-83826-3_2
10 2 Information Technology as Driver of Digitisation
Fig. 2.1 Packing density of processor types in the course of time (Schau et al.)
time [Mar19]. Causes for this immense increase in packing density are the continuous
reduction of component sizes and improved manufacturing processes.
The component size and density on the chips are directly related to their perfor-
mance—the smaller the size and the denser the pack, the greater the performance.
When in 2005 the mass production of chips with structures from 130 down to 90 nm
was established, 7 nm structures are already in practical use in 2020 [Bei20]. Labo-
ratories began to work on first prototypes with even smaller structural sizes down
to 4 nm. This technology is expected to become the standard in mass production by
about 2022 and thus further confirm Moore’s Law.
Moore’s Law is based on observations and is not scientifically substantiated.
Nevertheless, it has established itself as the standard of the digital revolution in
industry and the industry is defining milestones by it for its planning. This is why
it is also referred to as a self-fulfilling prophecy, which is in fact the drive to the IT
power increase. To link the performance of a processor directly to the number of
transistors is a simplification which is however sufficient for a basic understanding
of the strongly growing IT performance, which is the focus here. In today’s high-
performance chips, not all transistors directly serve the computing power, but also, for
example, the temporary data storage (so-called Cache). The aspect of multi-processor
architectures and their influence on computer performance is also not outlined here.
Elaboration or deeper understanding of these details is not required for the purpose
of this book.
2.2 Exponential Growth also for Digitisation 11
2.2 Exponential Growth also for Digitisation
It is much more interesting than the basic context of the exponential growth as
observed and identified by Moore for integrated circuits, has already been applied
to IT technologies used before the arrival of chips [refer to Fig. 2.2; Kur06]. The
computer power per second or per $1000 of value was subject to an exponential
course at the times of punch card technology as well as in the following technology
phases of mechanical relays, electron tubes and individual transistors.
Further analysis shows that this development applies to all information technology
parameters, such as bandwidth, storage capacity, clock rate and the prices of the
corresponding technology components [Cha03]. This development applies to all
information technology parameters, such as bandwidth, storage capacity, clock rate
and the prices of the corresponding technology components [Cha03]. In this regard,
the discussion is obsolete in which temporal distance a doubling of the respective
performance parameter may take place. Be it 12, 18 or 24 months—in any case,
there will be large-scale increases, even across technological frontiers. The resulting
dynamic developments are shown in Fig. 2.3 by the example of different IT-relevant
fields of application [Mee19] and Fig. 2.4 for the number of network nodes in an
automobile [Reg16].
Fig. 2.2 Development of processing power (Kurzweil)

China Cellular Internet Data Usage & Growth Y/Y Total Host / Guest Reviews on Airbnb Amazon Echo installed base
Fig. 2.3 Exponential development in different fields of application (according to Meeker)
Fig. 2.4 Development of internal network power when adapting bus technology in vehicles (Reger)
The growth of internet-based data usage in the dynamic China market, the rise
of Airbnb overnight stays, the use of Amazon Echo, as well as the performance of
the network in automobiles, are subject to exponential growth in analogy to Moore’s
Law. For the networks in automobiles, the bus technology is being developed further
to achieve growth, extending from CAN to Lin via CAN derivates to Ethernet. As
supplementary information, Fig. 2.4 shows an example of the dimensions of a car
network. It consists of over 300 components, the wiring has a length of 2 km and
overall the network weighs 30 kg (as of 2017).
Generalising this trend, it can be assumed that the penetration of digitisation
into enterprises is also subject to exponential growth and will therefore take up
speed significantly. These dynamics contrast with rather leisurely time horizons in
traditional processes of the automotive industry. The development time for a new
car at established manufacturers, for example, is still four to five years today and the
planning and construction of a new vehicle plant take place in similar time periods.
2.2 Exponential Growth also for Digitisation 13
Fig. 2.5 Linear volume growth versus exponential development in IT-related areas (T. Schlick)
Figure 2.5 illustrates this situation strikingly [Sch19]. While the volume of vehicles
worldwide is increasing linearly, IT is developing exponentially, as is Uber use and
the number of electrically powered vehicles.
Based on the exclusively offered electric drive, with “update over the air” of the
vehicle software and an innovative distribution channel, Tesla Motors has placed itself
at the top as a transformation benchmark in the industry. The challenges of ramping
up mass production at the main plants have been overcome, Tesla battery production
is up and running and the first plant in China was commissioned in record time.
However, all established manufacturers got the “Tesla wake-up call” and in addition
are now embracing the threat from climate change. Challenging programmes have
been launched for digital transformation and for the transition from combustion
engines to electric vehicles. Of the German manufacturers, Mercedes and BMW are
almost equal in implementation in the upper vehicle segment, followed by AUDI.
In the volume segment, Volkswagen is convincing with a comprehensive strategy
for electric drive. Somewhat behind in the race to digitalisation are the French and
American manufacturers, while FIAT and Toyota can be seen rather as followers.
The announced transformation programmes require immense effort and investment.
Additional pressure on the established OEMs is exerted by innovative companies
such as Waymo, Uber or Baidu, which are new to this industry and which operate
from the outset with a high degree of digitalisation and thus high process efficiency
and strong customer orientation.
The derivation of the necessary measures for this transformation is the goal and
main part of this book. First, potential drivers as wells as obstacles to continuous IT
performance improvement or a digitisation initiative are looked at briefly. Essentially
these are the energy consumption of the IT, security and the lawful handling of
personal data.
2.3 Energy Requirement of IT
The growing energy consumption of IT and the associated issues of heat generation
and environmental pollution in recycling are increasingly coming into focus. Hard-
ware producers and IT providers are thus required to constantly improve the energy
efficiency of their solutions. The energy requirements of IT are taken into account
in the life cycle assessment of car manufacturers and hence also have to contribute
with suitable measures to the achievement of the targeted emission neutrality. All car
manufacturers have their own computing centres (CC) as the heart of the required
information technology. Comprehensive consolidations of the server and storage
systems into one “global mega-CC” are not established so far, yet “regional CC’s”
distributed across the continents are common due to latencies. These are located, for
example, in North and South America, Europe, Asia, China and possibly the ASEAN
countries and are often linked in order to guarantee availability (refer to Sect. 8.4.7).
The demand of the automotive industry for computing capacity is growing contin-
uously. The drivers are growing business volume, finer vehicle segmentation and a
broader product portfolio and, in particular, the digitalisation trend with more and
more IT solutions accessed via mobile devices and smartphones. For instance, the
use of simulations in product development and videos in marketing as well as the use
of “digital process robots” is leading to a massive increase in structured and unstruc-
tured data. Also the Internet of Things (IoT) and the increasing digitisation of the
production as a result of the Industry 4.0 implementation increase the requirements
for computing performance. This increases the need for IT hardware and the energy
required for operation, data networks, air-conditioning systems, emergency power
units and transformers.
The power consumption for the technical building services of a computing centre
is nowadays about 50% of its total power requirement, so currently, only half of the
energy is used to operate the actual IT infrastructure. The ratio of CC total energy
demand to the power requirement of IT constitutes an industry standard for the energy
efficiency of a CC. While the installed CC’s operate with a characteristic value of 2 on
average, new mainframe computing centres achieve values of significantly less than
1.3 [Hin19]. This is achieved on the one hand by the higher efficiency of the technical
building equipment and the IT technology and on the other by improved organisation,
methods and air-conditioning technology concepts [Wei20]. For example, hot water
cooling, shifts in room temperatures and also the housing of servers and storage are
common improvement measures.
At the same time, the energy efficiency of the IT infrastructure is being improved
continually. As early as at the beginning of the 2010s, standard PC’s required more
than 100 W of power consumption, while today’s systems are less than 30 W and
smartphones are less than 3 W. This is certainly a pleasing development which
will continue. However, two aspects are contrary to this improvement: The power
consumption per computing transaction remains almost the same since the computing
speed has increased massively. The number of end devices (PC’s, notebooks, smart-
phones) is on the rise. The applications on the end devices are connected to central
2.3 Energy Requirement of IT 15
systems and cause increasing power consumption in the networks and the CC’s. As
an example, instead of downloads, the streaming of videos, manuals, etc. is contin-
uously increasing with corresponding loads on the networks and IT infrastructures.
It is therefore not surprising that the energy demand in the CC’s continues to grow,
despite improved efficiency. As a result, the capacity of CC’s often is not deter-
mined by the footprint for server and storage systems, yet rather by the necessary
energy supply and cooling. A forecast of the energy demand of computing centres
worldwide, measured in terawatt hours, is shown in Fig. 2.6 [Jon18].
In 2030, ICT (Information and Communication Technology) is expected to
consume a total of almost 9000 TWh of electricity per year. This corresponds to
almost twenty times Germany’s total annual consumption. Computing centres and
networks are involved with roughly equal shares and an exponential increase, with
rising growth. In 2019, a study by Stanford University assumed that computing
centres would account for one per cent of global electricity consumption [Mas20].
Long-term forecasts can only be found in wide ranges due to many uncertain influ-
encing factors and for the coming decade, a three- to fourfold increase is estimated.
In addition, recent studies project the share of digitalisation technologies in global
greenhouse gas emissions at 3.7% in 2019, which is significantly higher than the
share of civil aviation. Further estimates suggest that the global “digital share” will
rise to over 8% by 2025, higher than the impact from cars and motorbikes [Mat19].
These developments underline the importance of measures to increase the efficiency
of CC’s.
In addition to the outlined technological aspects, conceptual, organisational and
business policy options as well play a role. The utilisation factor of the servers
employed is still at a relatively low level. As an example, the results of a comprehen-
sive study are being mentioned here [Koo15]. According to that, servers operate on
average at a 6% utilisation factor and 30% of servers in the US in both virtualised and
Fig. 2.6 Forecast of the energy consumption of IT technology (Jones)

non-virtualised environments are in a “comatose state”, i.e. they are fully installed and
consume power however did in the past 6 months deliver neither processing perfor-
mance nor data. These values point to a considerable potential for improvement
and energy savings which must be consistently realised. Extensive consolidations
and cross-segment virtualisation as well as the shutdown of obsolete applications
and servers are recommended. Virtualisation means the combination of different
servers under a consolidating software layer which optimises the distribution of the
performance requirements to the individual servers, thus improving the respective
utilisation. To support these projects, tools are available on the web [Koo15].
The optimisation of the utilisation of storage systems is also to be promoted with
every emphasis. On the one hand, as the data volume is increasing rapidly in the
enterprises—rates of increase of 60% per year are quite common—and on the other
hand, since the virtualisation in the storage area, compared to these approaches in the
server area, only began to be used later and consequently, there is pent-up demand.
The concept of the so-called Software Defined Storage (SDS) offers considerable
utilisation and performance benefits. Here, a software layer is laid over existing
storage systems by even different manufacturers, so that free memory can be recog-
nised quickly and used by several different systems. This results in the advantage of
common efficient use of existing hardware, freedom of choice in the use of additional
storage units and the common management of the connected system as a whole. The
improved utilisation in turn leads to savings in energy consumption for data storage.
These were just some notes on energy saving for computing centres. Further
flexible usage concepts using so-called hybrid cloud architectures as a platform for
digitisation projects will be discussed in Chap. 8.
The energy consumption of their computing centres is important for automo-
tive manufacturers, in addition to the aspects of operational safety and profitability,
also from an ecological point of view. Of course, the environment is always about
consuming as little energy as possible and getting the required energy from envi-
ronmentally friendly sources preferably. The energy consumption of a computing
centre is at the same time part of the overall eco-balance of the automotive manufac-
turers. Many companies have embedded environmental objectives in their strategy,
covering the entire life cycle of the vehicles. The established parameter for this is
the “CO2 -Footprint per Vehicle”. This has to include the proportionate CC energy
consumption—in fact, a further reason to pay attention to the energy efficiency of
the IT.
2.4 IT Security
In the context of digitisation, IT security and proper handling of personal data are to
be addressed similarly to the subject of energy consumption. Traditionally, Germany
is dealing intensively and particularly sensitively with these topics. This certainly
is appropriate indeed. However, this should not lead to any obstacles to meaningful
digitisation projects, as the author repeatedly experienced in practice. Both topics are
2.4 IT Security 17
challenging, comprehensive and complex and are dealt with in detail in the relevant
specialist literature. For this reason, they are not discussed in-depth here, rather it
follows an overview to provide a basic understanding and problem-consciousness as
the basis for planned digitisation projects.
Basic principles for the proper execution and the corresponding audits of IT secu-
rity are laid down in numerous laws, standards and instructions. The most important
and comprehensive regulations are provided by the ISO 2700x series of standards.
These cover, for example, identity management, authentication, encryption incl. key
management and monitoring as well as implementation instructions for the detection
and reporting of intruders. In addition, there are numerous special standards such as
DIN EN 50600 for computing centre setup and infrastructure and the IEC62443 for
the certification of IT security in industrial automation and control systems.
These standards offer a suitable basis and a coherent framework of action. A
full discourse or even an enumeration of all standards and guidelines relevant to the
subject of safety would be beyond the scope of this book. For this reason, please
kindly refer to the relevant technical literature. A very good technical overview
and a compilation of many further sources are given, for instance, in the “IT-
Grundschutzkompendium”, published on behalf of the Federal Office for Informa-
tion Security [BSI20]. In this compendium, comprehensive implementation instruc-
tions are also listed in the sense of “best practices” with respect to more than 70
fields of action pertaining to IT security. This guide is continuously adapted and
expanded in view of upcoming challenges, especially in relation to digitalisation. In
addition to technological aspects, further studies focus on organisational and legal
issues, particularly with regard to digitalisation in production or Industry 4.0 and
pragmatic suggestions for action are also given for the automotive industry, among
others [Bac16]. A broad overview of legal requirements, current research priorities
and funding programmes can also be found there.
The recommendations for action listed in the studies are discussed in more detail
in Sect. 8.4.8. It is important to understand the importance of IT security, especially
in the context of digitalisation. The growing proportion of IT in vehicles, the Internet
of Things, the integration of processes along with the comprehensive networking of
all partners involved in the value creation process across national borders and the
automation of processes, as well as the growing number of mobile devices, Big Data
and the Cloud, increase the potential IT security risks and thus the importance of the
topic.
The scale and complexity of threats are growing heavily with the increasing
dissemination and relevance of IT. The main threats are the infiltration and the
infection with malicious software via the Internet or rather via storage media and
external hardware, more and more also via smartphones. The growing use of artifi-
cial intelligence solutions also forms the basis of security problems [Bec19]. Human
wrongdoing and sabotage continue to be among the greatest risks. According to a
Bitkom study in 2020, 75% of all companies were the target of a cyber attack in the
last two years and of these, over 48% were considered successful, i.e. these attacks
were linked to data and IT theft [Bit20]. This subject is of immense importance and
belongs to be included in every digitisation roadmap and must be implemented in

careful and close cooperation with the respective projects.
2.5 Handling of Personal Data
The protection of personal data is as important as IT security, namely in Germany. The

handling of such data, i.e. the collection, saving and the processing in the various
working steps of change, transfer, lock and delete, as well as the data use, has to
be done in Germany according to the provisions of the Federal Data Protection Act
‘Bundesdatenschutz-Gesetz’ (BDSG). The comprehensive regulation of this topic by
the General Data Protection Regulation ‘Datenschutz-Grundverordnung’ (DSGVO)
[NN18] also applies. Personal data is deemed to be personal if it is possible to
establish any kind of personal reference on the basis of the data. The aim of the
legislation is to protect citizens from disadvantages arising from the handling of
their data. In principle, personal data may only be collected, processed and used
if it is permitted by special laws or if the data subject expressly consents to this
voluntarily. Prior to this consent, information must be provided on the purpose of
the use and the type of processing. This consent shall then apply exclusively to the
agreed purpose and shall be renewed in the event of further or different use. If the
purpose of use is no longer given, the data must be deleted. There is certainly room for
interpretation in the implementation of this specification, as the following example
may show.
A customer configures his new car online with individual features such as sunroof,
metallic paint and special finish of the steering wheel. This configuration is further
processed in the manufacturer’s back-end systems, for example, for material dispo-
sition, order control and logistics and detailed information on the order is then sent
electronically to the component suppliers. Body-in-white and painting are carried out
according to the configuration and the components go exactly to the final assembly.
After completion, the vehicle is delivered to the customer in accordance with the
specification. In this example, from configuration to delivery it is time and again
about the processing of customer or personal data. With respect to all work steps
consent must have been given, as otherwise it may be a breach of the Federal Data
Protection Act and trigger a fine.
This simplified example highlights the relevance of the topic for digitisation
projects. This becomes even more challenging in regard to cross-border logistics
chains or the transmission and storage of these personal data, for example in Cloud
computing centres abroad. There is considerable legal certainty in the transfer and
processing within the EU, however, the United States, or so-called third countries
such as Japan, India or China, which are subject to less stringent protection laws,
raise complex legal questions. In a similar way as with IT security, it is important
not to postpone this issue, but rather to involve the relevant experts, such as the data
protection and security officer of the company, right from the outset in the digiti-
sation projects in order to establish regulations and security at an early stage. This
2.5 Handling of Personal Data 19
should happen in tandem outside of the specialist projects in order to avoid uncer-
tainty from this discussion or to probably lose time in special discussions. Clear,
pragmatic and timely guidelines for IT security and the handling of personal data
facilitate successful project implementation.
2.6 Powerful Networks
In addition to IT security and the adequate handling of personal data, powerful

networks are an important prerequisite for the implementation of digitisation. For
example, Industry 4.0 programmes require reliable communications within the plant,
comprehensive integration into the enterprise IT and connections across enter-
prise boundaries as well. The scope and intensity of communication are rising
considerably.
The available bandwidths of the underlying network infrastructure will no longer
be able to satisfy this demand and measures must be taken at an early stage to ensure
that the subject of communication does not become the “bottleneck” of digitisation.
Currently, 10 Gbit networks are installed in the enterprises, while computing centres
already use 40 Gbit lines and even have plans for 100 Gbit bandwidth. In addition
to the bandwidth expansion, the latency times are being improved continuously in
order to achieve the required high transmission performance in combined effect.
When setting up high-performance networks in production, instead of special
fieldbus systems, more and more use is being made of Ethernet technology, which
has been tried and tested over many years. However, for production-related use, the
previous transmission methods need to be adapted in order to achieve the required
real-time capability. There are different alternatives and no uniform solutions so far.
Currently, Time-Sensitive Networking (TSN) is gaining importance as a standard
for real-time Ethernet in combination with the widely used OPC UA protocol (Open
Platform Communication Unified Architecture), especially in production. In the TSN
process, network components are synchronised in time with high precision. Based
on this, information packets are transmitted with a known transmission speed using
a special procedure and the latest arrival time at the recipient can be predicted. The
IEEE (Institute of Electrical and Electronics Engineers) is working intensively on
TSN standardisation [Emd19]. High transmission speeds and the ability to secure or
predict the receiver dialogue are the basis for the use of high-performance Ethernet
in vehicle IT. This is discussed in more detail in Sect. 5.4.5.
In mobile communications, 5G technology will bring significant performance
improvements, based on transmission rates of 10 Gbit/s, through very short latency
times and through the use of high frequency ranges. The fast 5G-based connections
will then support, for example, the implementation of autonomous driving and also
communication between vehicles, so-called C2C (Car2Car) communication. Interest
groups and consortia have also formed in this area of application, for example, the
CAR2CAR Communication Consortium (C2C-CC) or the 5G Automotive Associ-
ation (5GAA). Many manufacturers and suppliers are involved in these committees
so that a high level of acceptance of the developed standards is achieved. For more
details, please refer to the corresponding internet portals.
To optimise communication across locations, companies rely on so-called Multi-
protocol Label Switching (MPLS) technology, which can use different protocols to
send information packets through the network. In this process, labels are assigned
to the data packets as simplified addressing, with the help of which defined network
paths are maintained. Low-cost internet connections are increasingly being used for
access. In this field, so-called “All-IP” technologies will prevail. This means the
bundling of different transmission technologies on the basis of the Internet Protocol
(IP). Thus, different services such as telephony, multimedia mails and data are routed
via one technology. This one-stop service results in cost and service advantages,
for example, through uniform access for users from any location [NN15]. The
next step in development is called Next Generation Network (NGN), which also
provides for bundling, however not on the basis of IP technology, but rather using
manufacturer-specific protocols.
Further developments in the field of networks envisage the use of virtualisation.
The future technologies “Software Defined Networking” (SDN) and “Network Func-
tions Virtualisation” (NFV) are designed for exactly this purpose. These methods
decouple the infrastructure from the communication requirements through a soft-
ware layer and optimise the use of resources through coordination at this level. Since
these technologies have already proven themselves in computing centres, the tech-
nical details will not be discussed any further and the reader is instead referred to
available studies. The future implementation of software-based procedures also in
the Wide Area Network (WAN) holds further potential for securing communication
for digitalisation in the future.
2.7 Technology Outlook
The following is a look into the future with the question of whether and how the steady
growth in IT performance can continue and whether Moore’s Law continues to apply
on the basis of new technologies. The benchmark for this, respectively the immense
progress in IT performance, is illustrated by the following comparisons: In 2016, a
commercially available smartphone had 120 million times the computing power of
the control computer of NASA’s Apollo programme [Gru16]. Modern mobile phones
and mobile devices have computing power that puts them rather much in the same
league as supercomputers.
2.7.1 3D Chip Architectures
The basis for the previous performance increase of the chips was a continuous reduc-
tion of the chip structures and an increase in the packing density of the transistors.
2.7 Technology Outlook 21
Limitations are looming here though. Current research is carried out on chip struc-
tures in the size of under 4 nm. There is still some effort needed to achieve economic
production. Nevertheless, it can be assumed that these will be in mass production
within a few years’ time. However, this path of miniaturisation is likely to encounter
physical limitations, since a silicon atom has a diameter of approx. 0.3–0.5 nm and
thus only a few atoms fit in the structures next to each other. In these dimensions, safe
atomic or line actions are no longer possible and so-called quantum effects occur
[Ruc11]. In addition to these physical challenges, there are further limitations in
energy supply and control of heat problems. If the development of chip technology
were to continue with the same basic conditions of energy requirement, systems
with 30,000 times bigger computing power would be achieved within some decades,
although this would require today’s total world production of electricity.
In this way, an end to achieving further performance increases through continuous
miniaturisation based on silicon technology seems to be near. One option is now to
build the chips in multiple layers in 3D architectures instead of the existing two-
dimensional 2D structure. In doing so, the electronic components are located on a
number of wafer plates which are arranged one above the other. Figure 2.7 shows
the principle, scalable from structures to boards up to board groups [Ruc11].
The high spatial packing density of these 3D chip architectures allows further
performance increases since with smaller chip bases the distances between the
modules can be shortened and the data transmission can be optimised. However,
there are two new challenges with these compact architectures: For one thing, there
is an extreme heat generation of several kWh per cm3 in the chip stacks, which far
exceeds the heat generation of a combustion engine and for another, the necessary
power supply must be ensured via the connection pins. But these challenges are also
manageable and the first 3D chips are already being used in computers [Sta19].
Fig. 2.7 Construction of 3D chips (Ruch et al.)

2.7.2 Flow Batteries
To control the heat problems in the chips or boards, liquid runs through subtle cooling
channels, which pass through the chip stacks. IBM researchers from the Zurich
laboratory had already made great progress with the use of hot water cooling at the
beginning of the 2010s. Their use in supercomputers resulted in significant energy
savings. In line with this, another innovative approach is also being pursued using
liquids. The basis for this is so-called redox flow batteries, which are already in
practical use, in the field of renewable energies for instance. With this technology, the
energy is no longer transported via cables, but rather by means of an electrochemically
active liquid. At the heart of these batteries is a central reaction chamber through
which two differently charged electrolyte liquids are pumped, which then exchange
charge via a membrane [Roe19]. The storage capacity of these batteries depends
on the tank volumes of the liquids. Currently, intensive work is being done to use
low-cost chemicals for the electrolytes that also allow a high number of charging
cycles. Furthermore, the power density and miniaturisation need to be progressed
further.
This fluid could also be called electronic blood and there is an analogy to the
brain, which, as Fig. 2.8 shows, is clearly superior to today’s technologies in terms
of efficiency and power density [Ruc11]. Our brain is currently 10,000 times more
efficient than established IT technology. Like the brain with its energy supply and
cooling via blood, researchers see a similar potential in the flow battery approach.
They are therefore convinced that within just a few years they will be able to build
a supercomputer with a computing power of 1 PetaFlop/s (that is 10 exp15 floating
point operations per second). Furthermore, flow batteries for storing large amounts
of energy are considered a cost-effective alternative to lithium-ion batteries. For this
Fig. 2.8 Power density and

efficiency of supercomputers
compared to biological
brains (Ruch et al.)
reason, they are already being used to balance peak loads in wind and solar energy.
While direct use in electric vehicles is not foreseeable, the flexible, high buffer power
could well absorb charging peaks at fast charging stations and is consequently also
of interest to the automotive industry.
2.7.3 Carbon Nanotubes
In order to exploit further options for the increase in performance, research is also
carried out on material alternatives to silicon, for instance on so-called carbon
nanotubes for some years. These are tiny tubes whose wall consists of a single
layer of carbon atoms, connected in a honeycomb structure. These tubes can be used
to conduct electrons with minimal resistance. The tube diameter is between 0.5 and
50 nm. The problem is that bundles of several intertwined fibres develop during
production [Shu13].
MIT scientists have by now solved these problems and presented a first chip based
on nanotubes [Hil19]. The wall thickness of the 14,000 tubes placed side by side is
in the atomic range. The 16 bit microprocessor can process standard instructions in
32 bit format, proven with the legendary “Hello World” programme. This prototype
is seen as an important milestone and scientists predict that in a few years it will
be possible to build extremely powerful computers on the basis of nanotubes, thus
continuing the principle of Moore’s Law with an exponential increase in performance.
2.7.4 Neuronal Networks
Another way to increase the performance of chips is the architecture. Today’s

computers are all based on the so-called von-Neumann principle, in which transistors
generate binary switching states specifically for binary data processing. Furthermore,
the processor and storage are separate since transistors can not store information.
Via the processors, the switching current is conducted back and forth between the
arithmetic unit, the logic unit and a buffer store. This process is very complex and
energy-intensive.
An alternative to this, also in analogy to the human brain, are neuronal networks.
These consist of nerve cells (neurons) which are connected to one another via commu-
nication channels (synapses). Information is processed within the network by neurons
via non-linear functions, taking into account further neurons or rather switching
points. This linkage results in a highly parallel processing of the input information
and very complex non-linear dependencies in the input information can be imaged
quickly. Neuronal networks are able to learn these dependencies and further extend
their experiences [Rey10, Smh15].
In a new chip architecture, the so-called neuromorphic chips, neuronal networks
are imitated in silicon circuits and the storage and processor are combined. In this
way, the human brain is mimicked with its nerve cells and thus makes it possible
to solve certain problems, such as pattern recognition or prediction and recognition
of contexts, more quickly and with considerably greater energy efficiency than with
today’s computer systems. In view of the promising potential, intensive research is
being conducted in this area and the very first prototypes have already been presented
in this field as well [Tet20]. These systems are currently geared towards special
fields of application from the areas of artificial intelligence and neuroscience, where
they are proving their high performance and energy efficiency, often in interaction
with conventional computers. The first generic systems are also under development.
Neuromorphic chips and computers based on them are also relevant to the automotive
industry, for example in rapid pattern or image recognition to enable autonomous
driving.
2.7.5 Quantum Computer
Finally, a brief look at the topic of quantum computers is given for the consideration of
future technologies or possible approaches to achieve further massive IT performance
increases. This idea has been researched for years [Mat13]. Instead of today’s binary
system with the two clearly defined states of a bit, these computers use quantum
mechanical effects. Comparable to the bit, there are so-called qubits (derived from
quantum bits), which can, however, assume all possible intermediate states. A nice
analogy is a rapidly rotating coin that falls on heads or tails via many intermediate
states. Several qubits can be brought together, in quantum physics this is called
entanglement, in which case the common state overlaps all the individual states. If
several qubits are entangled to form so-called quantum registers and the information
is distributed on these registers, a very large number of values can be processed
simultaneously, thereby facilitating the solving of very complex problems [Sch15].
Through the parallelism of the calculations achieved in this way, high performance is
achieved. However, quantum computers are not universal computers, but instead are
more suitable for problems that can make good use of quantum mechanical effects.
These are, for example, the simulation of superimposed magnetic fields, searching
unstructured databases or also the decomposition of prime numbers and thus useful
for solving decryptions based on prime number concepts.
Many large research and development organisations are engaged in the further
development of quantum computers. The challenges are miniaturisation and the
reproducible production and entanglement of registers with very many qubits.
Promising approaches and first prototypes have already been presented. Under
laboratory conditions, isolated from environmental influences and at just over
minus 273 °C, current systems calculate 100 million times faster than conventional
computers when given suitable tasks [Mei19, Sch15]. First potential applications in
the automotive industry are discussed in Sect. 4.1.6.
This may suffice as a brief look at future technologies, which will enable further IT
performance growth. In addition, many other ideas are pursued, from photonics (light
effects), spintronics (electrons as medium of two bits) and biologic DNA computers.
Also under the aspect of these further options, it is obvious that Moore’s Law will
continue to be valid, possibly transferred to other technologies. Along with this effect,
the growth of digitalisation will certainly develop exponentially.
2.8 Technological Singularity
The following is a short overview on a futuristic topic which the now 20-year-olds
will be able to experience in their lifetime: the so-called Technological Singularity.
Originally a term from mathematics, this refers to a point at which a function is
not defined, such as 1/x at the point of x = 0. At this point, all the curves for X
go towards infinity. In physics, singularity refers to a situation in which no scien-
tific laws are applicable, as presumably in a black hole [Rie11]. With these rather
gloomy definitions, the transfer of the concept to information technology becomes
exciting. The so-called technological singularity is understood as a point in time
at which the worldwide processing power of machines or rather high-performance
computers will overtake the summed performance of human brains. From this point
onwards, computers can continue to further improve independently [Kur06, Sha20].
This situation is illustrated in Fig. 2.9 which shows the computing power of all today’s
computers, as well as of all mouse, elephant and human brains.
The point of intersection and ergo the point of the singularity according to this
will be in the year 2050 approximately [Rie11]. Assuming exponential growth here
Fig. 2.9 Development of computer performance in comparison to the brain of living beings [Kur06]
as well, two exponential processes will come together from this point on, namely the
development of IT technology and the independence of computers. On the assump-
tion of the resulting incredible acceleration, it is fascinating to estimate what conse-
quences this will have for all areas of life. The digitalisation of companies will then
probably also become independent.
This means that revolutions are taking place in medical technology, nanotech-
nology and robotics and that these areas will change permanently. In nanotechnology,
manufacturing takes place at the atomic level. In combination with robotics, this
leads to miniature robots whose intelligence is at a superhuman level and which, for
example, permanently circle in our bloodstream and monitor health parameters. As a
result, these robots can automatically take corrective action when diseases develop.
Similar applications are conceivable with miniature service robots in automobiles.
Overall, the massive increase in total intelligence will drive the exponential growth
of information technology at an unprecedented pace. Exciting visions are emerging
combined with many questions: How do we possibly couple human and technical
intelligence? Who will then steer and control whom? How can we prevent computer
intelligence from spilling over into unplanned areas? What is the role of humans?
Many questions are obvious, although they do not fit into the context of this book.
At this point, the interested reader is again kindly referred to the specialist literature
[Sha20].
Important to the author is to underpin the need to deal with digitalisation in
a targeted and holistic way, also from a technical perspective. Digitalisation is
approaching with massive momentum and is unstoppable—which is why it is impor-
tant for every company to be able to control these new forces and deploy them in a
targeted manner.
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Chapter 3
“Digital Lifestyle”—Future Employees
and Customers
In the previous chapter, it was shown that information technology will drive digitalisa-
tion with an exponential increase in performance. Digitalisation will penetrate society
and companies comprehensively and massively change processes and organisations
there. These changes will encounter a very heterogeneous buyer and employee popu-
lation with different education and experience regarding digitalisation. An increasing
number of customers and all of today’s young professionals in companies belong to
the generation of so-called digital natives. These are people who have grown up with
IT-based offerings such as computer games, the Internet and Facebook as well as
smartphones. Dealing with these digital solutions is a matter of course for them and
has shaped their behaviour. This chapter explains what expectations the natives have
as car and mobility customers and also how they act as employees in companies and
what new forms of work are developing from this, such as Sharing, Crowdsourcing,
Open Innovation and Wikinomics.
In addition, so-called digital immigrants work in companies, who have often
only learned to deal with these new topics in adulthood long after their training
or studies. This group is also characterised by certain behaviour as well as value
systems and habits. Today’s working world and its organisational forms, collabora-
tion models, workplace design and established communication procedures are often
still geared towards the “immigrants”. In a few years, however, “natives” will make
up the majority of employees in companies and of future customers. Now it is up to
the companies to recognise this situation in their workforce and to set up measures
that will lead the digitisation efforts to success with the inclusion of all employees.
Prior to dealing with the chapter topic in detail, the author would like to reflect on
a personal experience that authentically illustrates the environment of digital natives.
The son completed a Master’s degree abroad. His entire studies, especially the labs
and seminar papers, were built on collaboration tools provided by the university.
These are software tools available on a secured platform that make it much easier
for groups to collaborate, e.g. through audio and video conferencing systems, instant
messenger services, project management tools, etc. over the Internet. The cooperation
with his fellow students from different countries worked smoothly and flexibly on

https://doi.org/10.1007/978-3-030-83826-3_3
30 3 “Digital Lifestyle”—Future Employees and Customers
different tasks with different teams. After completing his studies, his first step in
his job search was to research international online platforms. The comments in the
social networks were decisive in evaluating the respective offers.
In contrast to many of his fellow students, who were looking for the culture of
young start-ups, he started his career in a management consultancy in order to gain
insights into many companies with different tasks. Frankfurt was chosen as the place
to live with the main argument being the good transport connections. The room
in a shared flat with two other career starters of approximately the same age, who
were previously unknown to him, was quickly found via social media platforms.
Although each member of this community earns above average, none of them owns
a car and is not planning to buy one. For shorter distances, they use a bicycle, a
scooter or the offers of mobility platforms and for longer distances, public transport
offers, preferably low-cost long-distance buses—also because of the stable internet
connection on board. Required overnight stays are booked flexibly via sharing plat-
forms, for example via Airbnb. The topic of climate catastrophe and sustainability are
omnipresent in this age group. Therefore, unnecessary air travel is avoided as much
as possible and considerable value is placed on healthy nutrition with significantly
reduced meat consumption. Sport and “work/live balance” are as well important
criteria in the choice of occupation and location.
A little anecdote to round this off: While drinking coffee during the first visit a
few months after moving in, unknown ring tones disturbed the conversation. After a
long search, the source was finally found. There was indeed a traditional telephone
still stuck to the landline connection in the storage room, which was probably ringing
due to a misdirected call. None of the residents had used it before or would have
known the number of this traditional phone.
This personal example exemplifies the challenges for companies to properly
address digital natives both as future employees and as potential customers. For
this reason, the following chapter will point out the background and attitude to life
of the natives in more detail and derive recommendations on how companies should
position and organise themselves today in order to attract, motivate, develop and
retain natives as new employees for the long term. Ideas and suggestions on what to
do in order to win them as customers are also presented. At the same time, of course,
it is important to keep the immigrants on board and motivated.
3.1 Always on
In 2019, a total of 4.1 billion people worldwide, or 53.6% of the world’s population,
used the internet, while as much as 93% of the world’s population has network access,
with 82% using at least LTE standard [ICT19]. Already in the previous year of 2018,
over 2 billion of the internet users were from the Asia Pacific, of which more than
800 million users were from China [Mee19]. The usage behaviour of adults in the
USA is illustrated in Fig. 3.1. Daily online time averages 6.3 h, of which more than
3 h, or 57% of this time, is accessed via a smartphone, while only 2 h of access
3.1 Always on 31
Fig. 3.1 Daily online time of adults in the USA in 2018 (Meeker)
is PC-based. Daily online time is thus now higher than daily TV time, even in the
US. The same study goes on to suggest that in terms of global usage, Facebook,
YouTube and WhatsApp are the most used, closely followed by WeChat and, with
increasing importance, Instagram [Mee19]. As expected, these offers address the
three main areas of use: Social networking, entertainment and communication. In
addition, commerce platforms are established and video and sharing services are
expanding unstoppably. These findings and representative trends also apply in a
similar way to other countries. In Brazil, the USA and China, local offers continue
to play an important role in internet use. In Latin America, for example, the delivery
platform Rappi is growing very fast, in India the commerce solution Reliance Jio
has more than 500 million users and in China, in addition to the global providers
Baidu, TikTok and WeChat, some local offerings such as Pinduoduo or the commerce
platform Meituan Dianping are also established with high growth rates.
An interesting and also for companies relevant differentiating background on the
usage behaviour of young people in the age group of 14–24 years is provided by
another comprehensive study [Bor18], which was carried out to coincide with the
second edition of this book. Compared to the first corresponding study four years
ago, the main difference is that the “mindless hype” of Internet use is over. However,
there are no more “offliners” in this age group. All young people are online and deal
with the medium of the Internet in an objective and responsible manner. Even digital
natives do not acquire IT knowledge just like an innate trait, they rather have to spend
a lot of time and effort to learn how to deal with and use online applications. They do
not do this in traditional forms of learning, rather through trial and error, by reading
up on social media and through direct exchange in communities.
Fig. 3.2 Behavioural patterns in Internet use related to the age group of 14 to 24-year-olds (Borstedt
et al.)
Different patterns of use, behaviour and basic attitudes can be distinguished in

Internet use, summarised in the so-called Internet milieu of the study, shown in
Fig. 3.2.
The vertical axis divides the educational level of the group studied into low,
medium and high and the horizontal axis divides their basic orientation into three
classes: traditional, modern and postmodern. In this field, six characteristic behaviour
patterns could be distinguished. The two groups with a blue background, altogether
more than a quarter of all users, tend to approach the Internet sceptically and respon-
sibly, i.e. rather cautiously and defensively. The pragmatic and unconcerned user
groups, together 39%, act rather pro-actively and curiously and would like to be
part of it. They are open to change and belong to the middle and higher educa-
tion levels. This is followed by the group of enthusiasts (23% of respondents), who
is easily inspired and are on the Internet with little risk awareness. The groups of
sovereigns make up a total of 12% of the respondents, come from higher educational
levels and are there with an experience-oriented open attitude, although definitely
risk-conscious.
This deeper analysis of the “always on” mentality with the presented groupings
on behavioural patterns represents a useful approach that companies can project
onto their employees in order to derive, for example, communication and training
programmes for digitalisation projects. In these programmes, it is important to
involve the digital natives with their creativity and their knowledge of contempo-
rary communication, forms of learning and the creation of current software solutions
and thus make them the drivers of the transformations.
3.2 Mobile Economy 33
3.2 Mobile Economy
Mobile devices are increasingly becoming the standard tool for IT use and this is not
just among digital natives. Forecasts predict that in 2020 the number of smartphones
worldwide will rise to 3.5 billion devices and that 77% of all Americans in the USA,
for example, will own such a mobile device [Dey19]. While the number of PCs will
remain at the current level or decline in the long term, the number of smartphones
will continue to increase significantly, thus the gap will continue to widen. Since as
early as 2015, smartphone-based Internet use has exceeded access via PCs or laptops
[ICT19].
It is important to understand that this smartphone hype is not only replacing the
PC as an access device to the Internet and IT solutions, rather a completely new
culture of use has been established with these devices. With smartphones, always on
is no longer a conscious decision of use, it’s the standard. This opens up a completely
new economic system with immense opportunities. The dawn of this new business
generation is also illustrated by Fig. 3.3 [Eva16].
The computer generations have shown with their installed device volumes, as
validated in further individual studies, also each stand for a typical form of business.
The era of mainframes, workstations and PCs represents traditional corporate struc-
tures. Companies were and for the most part, still are, hierarchically organised, first
locally oriented and later on also at the global level. Mainframes and workstations
are the engines of comprehensive application software, such as ERP and engineering
solutions, which up to now are accessed during office hours by employees from their
fixed workstations using PCs.
With smartphones, digitalisation is now entering all areas of businesses as well as
daily private life. They have the potential to see literally everyone in the world own a
smartphone. These mobile devices make it possible to access the so-called backend
systems at any time and from different, even mobile workplaces. This leads to an
intertwining of the private and working worlds. A rapidly growing number of special
smartphone solutions (apps) are becoming established both in the work environment,
which functions complementarily as a front end to the company solutions and in the
Fig. 3.3 Computer generations and numbers of units worldwide (Evans)

private sphere, such as the popular weather, travel or stock market apps. These apps
are easily and flexibly financed at low cost or often free of charge indirectly via
advertising and downloaded from shop platforms. If these apps pass the first quick
test after considerable loading time, they usually remain on the device for further
use.
At the same time, more and more digital natives are working in companies and new
corporate cultures and often also changed organisational forms, collaboration models
and business structures are developing. This transformation towards a digitisation
culture is discussed in detail in Chap. 7 as they are essential success factors for
digitisation projects.
With the so-called “always on, mobile first” culture, user behaviour is changing
drastically. The Internet with its countless offers is turning into an integral part of life.
There is no longer a distinction between on/off times. This becomes obvious when
you look around in trams, cafés or even restaurants. Everywhere, young people and
increasingly older digital immigrants as well can be seen looking at their smartphones
and interacting with the device for short periods of time. Various studies confirm this
observation. The findings of one analysis are summarised and interpreted here as an
example [Mee19]. An interaction with the smartphone often lasts less than 2 min on
average. With an Internet usage time of roughly 6 h, this means approximately 180
accesses per user in a day. Some further interesting aspects of Internet dynamics:
approx. 93% of all search queries are carried out with Google, Google processes
100 billion search queries per month, 1 billion hours of YouTube videos are watched
every day. The average user spends about 40 min a day on this [Smi20].
Based on these findings, the question arises as to how productive concentration
can be maintained despite this dynamic in order to achieve targeted work results.
But this is exactly what young people and digital natives are increasingly training.
They will bring this ability to “speed multitask” with them to work in companies,
though not only the skills but also the expectations derived from these. Those who
are constantly online and communicate in a highly reactive manner will also expect
the same from their colleagues in the company, in their cooperation with suppliers
and business partners and as customers. Responses in dialogue are not only expected
within a day but rather within hours up to “real time”.
3.3 “Real Time” Expectation in the Mobile Ecosystem
Working on the web does not require real time, but web page load times should be
below 1 s to meet user expectations. The expectation for fast response behaviour
will increase even more as IT performance improves. Short loading times are an
important acceptance criterion to continue working from a screen page or to accept
the apps as a solution on smartphones. This also applies to loading times of the user
screens of application software in companies. Furthermore, the applications should
be self-explanatory and intuitively easy to use and thus quickly deliver desired results.
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wings come to the edge of this circle, and at a signal a whole house
whirls around and shows its other rooms or its garden. Sometimes
the coolies turn too quickly, and the actors are rolled out of sight
gesticulating and shouting. The scenery is painted on wings that
draw aside, or on flies hoisted overhead. Curiously enough, the
signal for opening the curtain is the same as that used at the
Comédie Française—three blows on the floor with a big stick.
The Japanese theatre of to-day is given over to realism and the
natural school, and Jefferson and Coquelin are not more quietly,
easily, and entirely the characters they assume than Danjiro, their
Japanese fellow-Thespian. The play is a transcript of actual life, and
everything moves in an every-day way, though Japanese manners
and customs often seem stilted, artificial, and unnatural to the
brusque Occidental, with his direct and brutally practical etiquette.
Pathos is always deep and long drawn out, and the last tear is
extracted from the eyes of audiences quick to respond to emotional
appeals. Tragedies are very tragic and murders very sanguinary.
Death is generally accomplished by edged tools, and the antics of
the fencers, the wonderful endurance of the hacked victims, and the
streams of red paint and red silk ravellings that ooze forth delight the
audiences, who shout and shriek their “Ya! Ya!” and “Yeh! Yeh!” The
swordsmen are often acrobats and jugglers in disguise, who enliven
the extended slaughters with thrilling tours de force. Seppuku, the
honorable death, or hara-kiri as it is most commonly known, is
always received with breathless interest and wild applause, and the
self-disembowelling of the hero, with a long last oration, still seems
to the Japanese something fine and heroic and the most complete
revenge upon an insulting foe.
The detail and minuteness with which everything is explained, and
the endless etiquette and circumlocution, are thoroughly Japanese.
Little is left to the imagination in their dramatic art, and an ordinary
play has more sub-plots and characters than one of Dickens’s
novels. With the rapid adoption of new customs, the theatre is
becoming the only conserver of the old life and manners.
If the Japanese stage has its blood-and-thunder and its tank
drama, it has also its millinery play. The costumes alone are often
worth going to see, and the managers announce the appearance of
historic brocades and armor worthy of museums. Danjiro owns and
wears a sacred coat of mail that belonged to one of the Ronins, and
his appearance in it is the signal for the maddest applause. Such
treasures of costume and of armor are bequeathed from father to
son, and from retiring star to favorite pupil. As tokens of high
approval rich and noble patrons send to actors rare costumes,
swords, pipes, and articles of personal use. Excited spectators even
throw such tributes upon the stage. One approving foreigner, seeing
the rain of hats, coats, obis, and tobacco-pouches, once tossed his
hat down. Later the manager and the actor’s valet returned the hat
and asked for ten dollars, as those seeming gifts from the audience
were merely pledges or forfeits, to be afterwards redeemed by
money under the star’s regular schedule of prices. As protests
availed nothing, and the whole house only roared in derision when
he said that he had wished Danjiro to keep the battered derby as a
souvenir, the enthusiast paid his forfeit.
DANJIRO, THE GREAT ACTOR
The audience is as interesting a study as the players, each little

square box being another stage, whereon the picturesque drama of
Japanese life is enacted. Trays of tea and sweetmeats and single
teapots are constantly supplied to the spectators by attendants, who
tread the narrow partition rails between the boxes like acrobats.
Whenever the curtain closes there is a swift scurrying of these
Ganymedes to the boxes, while the children climb upon the partition
rails and the hana michi, or run about the theatre, even romping
upon the stage itself, and peeping under the curtain to see what the
carpenters are hammering; all with perfect ease and
unconsciousness.
Visiting the star in his dressing-room is a simple commercial
transaction. The actors make a fixed charge for receiving such visits,
deriving a regular income from this source. Danjiro’s dressing-room
is high up among the flies back of the Shintomiza stage, with a
window looking down upon it, so that he needs no call-boy. He often
shouts down to the stage himself, and has the action of the play
delayed or hastened, according to his toilet or his humors. Nothing
could be more scornful and indifferent than Danjiro’s treatment of the
high-priced visitors to his dressing-room. Fulsome flattery, if offered
with the florid and elaborate Japanese forms, will mollify him, and the
old fellow—eighth idolized Danjiro in succession—will finally offer
tea, present a hair-pin to a lady, or write an autograph on a fan in his
most captivating stage daimio manner. When making up for a part,
the great actor sits on the mat before a large swinging mirror. Except
for a character face little disguise is used, as daylight spoils its effect.
Three or four meek valets wait upon this spoiled and whimsical old
autocrat, and the whole theatre staff attends. The value of his
wardrobe, kept in immense covered bamboo baskets, is very great,
and its care a serious matter. Part of it was once stolen, and when
the whole Tokio police force succeeded in restoring it Danjiro
announced that he could never again wear what the touch of a thief
had defiled.
Genoske, fourth of his name and line, and Sodanje, a cousin of
Danjiro, equally prove the heredity of Japanese genius, and are
favorites of the Tokio public. Young actors pay the great stars for the
privilege of joining their companies, and studying their methods.
Danjiro is said to receive three thousand dollars from the Shintomiza
theatre for the year or season, which lasts from early fall until after
the cherry blossoms. His connection with the Shintomiza is like that
of a sociétaire with the Comédie Française. Yet he plays in other
Tokio theatres, has filled engagements in other cities, and
everywhere receives from perquisites, fees, and gifts more than the
amount of his salary.
The Japanese artist is fully aware of the aid ingenious advertising
may lend to genius. Drawing-room engagements do not yet
contribute a part of the income of a great actor; but such a one was
once brought to drink tea at a foreign house, and obligingly recited
from his great roles, and through the interpreter, talked most
interestingly to us of his art and stage business. In a few days the
native newspapers, the vernacular press, as the British dailies term
it, contained accounts of a great entertainment offered this favorite
actor by some foreign residents, and the simple afternoon tea of six
people was lost to view in the description of the elaborate banquet
and attending crowd.
The Government exercises a certain censorship of the stage, as of
the press, suppressing an obnoxious play, and arresting manager
and company if necessary. No allusions to present political events
are allowed, and the authorities permit the expression of no
disturbing ideas. The Tokugawas exercised this censorship towards
the play of the “Forty-seven Ronins,” because its main argument and
many of its scenes reflected too clearly the corrupt practises of the
Shogun’s court. Even its name was changed, and, until the
Restoration, it was presented as the Chiushingura (Loyal League),
and the scenes strayed far from historic fact. Since the new era,
managers advertise their representations as most closely following
the actual records, and every fresh contribution from historian or
antiquarian is availed of.
CHAPTER XI
THE IMPERIAL FAMILY
European sovereigns and reigning families are parvenus

compared to the ruler and the imperial house of Japan, which shows
an unbroken line from the accession of Jimmu Tenno, the first
Emperor in 660 b.c., down to the present son of Heaven, Mutsu Hito,
one hundred and twenty-first Emperor of his line.
During the feudal period, the Emperors, virtually prisoners of their
vassals, the Shoguns, lived and died within the yellow palace walls
of Kioto, knowing nothing of their subjects, and unknown by them.
After death, each was deified under a posthumous appellation, and
there his history ceased. Too sacred a being to be spoken of by his
personal name, at the mention of his title all Japanese make an
unconscious reverence even now. When his patronymic was written,
it was purposely left incomplete by the omission of one stroke of the
writing-brush. In the spoken language, the ruler is the Shujo, the
Heika, or the Tenno, while in the written language he is the Tenno,
the Kotei, or the Mikado. The Empress is the Kogo in both the
spoken and the written language, and the honorific sama follows all
of these imperial appellations.
Mutsu Hito, the most significant figure in Japanese history, was
born in the Kioto palace, November 3, 1852, and, taught and trained
as imperial princes had been before him, succeeded to the throne
after the death of his father, February 13, 1867. In the following
autumn the Shogun sent in his formal resignation, gave back the
supreme power to the rightful ruler, and retired to Osaka. In
February, 1868, the Emperor, not yet sixteen years of age, received
the foreign envoys in the Kioto palace with uncovered face; then,
defeating the rebellious Shogun at Osaka, removed his capital to
Yeddo, and chose the name Meiji (enlightenment), to designate the
era of his reign.
As seen at the rare court functions, at military reviews, and races,
the Emperor is easily the central figure. Taller than the average of his
race, and possessing great dignity and majesty, his slow, military
step and trailing sword effectually conceal the unequal gait
rheumatism sometimes obliges. He wears a trimmed beard, and his
features, more decided and strongly marked than is usual with the
aristocratic type of Japanese countenance, wear a calm and
composure as truly Oriental as imperial. In public he wears the
uniform of generalissimo of the army, a heavily-frogged and braided
one of dark-blue broad-cloth in winter, and of white duck in summer,
with a gold-mounted sword and many decorations. In recognition of
the honors and orders conferred upon him by other royalties, the
Emperor bestows the cordon and jewel of the princely Order of the
Chrysanthemum. The Order of the Rising Sun is given for merit and
distinguished services, and its red button is worn by many foreigners
as well as natives.
Of late, the Emperor has abandoned his attempts to learn English
and German, and relies upon interpreters, but he reads translations
of foreign literature with great interest. When he passes through the
streets, he is received with silent reverence, an advance guard of
police and a body-guard of lancers escorting him. While his own
people never shout or cheer, he accepts very graciously the foreign
custom, and bows an acknowledgment to the hurrahs that
sometimes greet him at Yokohama. While the Emperor has been
absorbed in the changing affairs of state during the two decades of
his reign, he still seems, in comparison with European sovereigns, to
dwell in absolute quiet and seclusion. Often, for weeks together, he
remains within the palace grounds, where he has riding courts,
archery, and rifle ranges, well-stocked fish-ponds, and every means
of amusing himself. Disliking the sea, he has no yacht, a chartered
mail-steamer or man-of-war carrying him to naval stations or new
fortifications, when the railroad is impracticable. His mountain
palaces and remote game preserves he never visits.
Immediately after establishing his court at Yeddo, the boy-Emperor
returned to Kioto to wed Haruko, daughter of Ichijo Takada, a kugé,
or court noble of the highest rank. The marriage was solemnized by
some Shinto ceremony within the temple of the palace, a ceremony
so sacred and private that no Japanese even conjectures its form.
The Empress Haruko, born May 29, 1850, was educated in the
strictest conventions of old Japan, and taught only the Chinese
classics, her own literature and poetic composition, the use of the
koto, the forms of cha no yu, needle-work, and the arrangement of
flowers—a broad and most liberal education for a maiden even of
high degree.
Upon her marriage, an extraordinary life opened before the little
Empress, demanding a very unusual activity and study, courage,
adaptiveness, and comprehension. She is poetic as well as practical,
and her poems are not only traced on imperial screens and
kakemono in autograph characters, but several of them have been
set to music as well.
Even now, her Majesty is more delicately pretty than her younger
sisters, although for years an invalid. She is short in stature, slender,
and small, with the long, oval face and refined features of the ideal
aristocratic type of Japanese beauty. At her marriage, she shaved
her eyebrows, painted two shadowy suggestions of them high up on
her forehead, and blackened her teeth, in accordance with Japanese
custom; but after a few years, she ceased to disfigure herself in this
way. It was an event, in 1873, when she gave her first audience to
the envoys’ wives. It cost the court chamberlains months of study to
arrange for the appearance of the Emperor and Empress together, to
reconcile the pretensions of their suites as to rank and precedence,
and to harmonize the Occidental, chivalrous ideas of deference to
women with the unflattering estimate of the Orient. When, on the day
of the declaration of the new constitution (February 11, 1890), the
Emperor and Empress rode side by side in the same state carriage
through the streets of Tokio, and when, that night, he offered his arm
to lead her to a twin arm-chair in the state dining-hall, a new era was
begun in Japanese history.
The Empress has her secretaries and readers, and gives a part of
each day to informal audiences. She visits her schools and hospitals,
and makes liberal purchases at charity bazaars. She exercises in the
saddle within the palace grounds, and drives in a brougham with
half-drawn curtains, her men on the box wearing a dark-blue livery
with red cords and facings, silver buttons, and cocked hats.
IN THE PALACE GARDENS
One of the two annual imperial garden-parties is given when the

chrysanthemums are in bloom, and the other at the time of the
cherry blossoms. The etiquette of these is quite simple, although an
appearance at one is still equivalent to a presentation at court. A few
days before the festivity each guest receives a large
chrysanthemum-bordered card:
November —, ⸺.
By order of their Majesties, the Emperor and Empress, the
Minister of State for the Household Department presents his
compliments to ⸺, and asks their company at the
“Chrysanthemum Party” at the garden of the Imperial
Temporary Palace on the 8th inst., at 3 o’clock in the
afternoon.
On an accompanying slip are these instructions:
Frock-coat required.
To alight at the “Kurumayose” after entering the palace gate.
This card to be shown to officers in attendance on arrival.
No party to be held if the day happens rainy.
The guests having assembled in the gardens at the hour indicated,

the Kimigayo, or national anthem, announces the approach of the
imperial personages. The Emperor, the Empress, and their suite,
passing between the rows of guests and the flower-tents, lead the
way to marquees on the lawn, where a collation is served, the
Emperor addressing a few remarks to the ministers and envoys as
he greets them. Sometimes special presentations are made to him
and the Empress, and often the Empress summons an envoy’s wife
or a peeress to her, while she sits at table. After another tour of the
flower-tents, the company, following the imperial lead, desert the
gardens. Calls of ceremony must be made upon the wife of the
premier within one week after these parties.
When the Empress and her ladies wore the old dress the garden-
parties at the palace were wonderfully picturesque and distinctly
Japanese. It was my good fortune to attend the chrysanthemum fête
of 1885, when the Empress and her suite made their last
appearance in the red hakama and loose brocade kimonos of the old
regime. The day was warm, with the brilliant autumnal tints peculiar
to Japan, clear and sunny. There were rows of chrysanthemum beds
in the Asakasa gardens, shielded from sun and wind by matted
awnings, screens, and silk hangings, and all the myriad flowers were
at one even and perfect period of unfolding. Under silk tents by
themselves stood single plants bearing from two hundred to four
hundred blossoms each, every blossom full and symmetrical.
The peeresses waiting in that sunny garden were most brilliant

figures, rivalling the glow of the flowers in their splendid old brocade
robes. At last came the Empress and the whole gorgeous train of her
attendants, following the shore of the mirror-like lake, past camellia
hedges to the esplanade of the upper garden of the great Asakasa
park. As the Emperor was housed by illness, the Empress, for the
first time, conducted a general court ceremony alone. Her costume
consisted of the loose hakama, or divided skirt, of the heaviest
scarlet silk, under a long loose kimono of dull heliotrope, brocaded
with conventional wistarias and the imperial crests in white. No outer
obi, or sash, was worn, and the neck was closed high with surplice
folds of rainbow-tinted silks. Many under-kimonos of fine white and
scarlet silk showed beneath the long, square sleeves of the heavy
brocade kimono. The imperial hair was stiffened into a thin halo
behind the face, falling thence to the waist, but tied here and there
with bits of silky white rice-paper, like that of a Shinto priestess.
Above her forehead shone a little golden ornament in the shape of
the ho-o, or phœnix, and she carried a parasol and an old court fan
of painted sticks of wood, wound with long cords of many-colored
silks. The dignity and majesty of the little woman were most
impressive. Every head bowed low, and when she had passed eyes
were lifted to her reverently and admiringly. All the princesses and
peeresses following her wore a similar costume, many of their
brocade kimonos being stiffened with embroidery and gold thread,
and making dazzling effects of color. When, in the brilliant sunset
flush, the imperial train retraced its steps, its kaleidoscopic flashes of
white and gold and color reflected in the still lake, and showing
vividly as the ladies formed in a semicircle on the lawn, while the
Empress withdrew to her apartments, there ended a series of
pictures so beautiful that they seemed an illusion of the imagination.
Before the following April Paris fashions had set in with great rigor,
and all the soft, pink reflections from the clouds of cherry blossoms
in the Hama Rikiu palace garden could not give the groups of little
women in dark, ugly, close-fitting gowns any likeness to the beautiful
assemblages of other years. Gone were poetry and
picturesqueness. Progress and Philistia were come. Except for the
costumes of the Chinese and Korean legations, and that of the
Chinese Minister’s wife, with its cap-like ornaments of filigree and
pearls, and tiny jewelled slippers, nothing Oriental or Asiatic in
aspect remained to that court gathering.
The Empress ordained and defended this change of dress in a
famous court circular, whose chief argument seemed to be that the
alteration from the sitting and kneeling etiquette of the Orient to the
standing etiquette of the Occident required western fashions for
women as well as men. Every lover of the picturesque protested, but
it was suspected that this manifesto was a shrewd political move of
Count Ito’s to convince the treaty powers that the Japanese do not
differ from other civilized people. Should the sacrifice of the old life
and the beautiful national dress help to secure for Japan a revision
of the shameful and unjust treaties forced upon her from 1854 to
1858, and promote the political liberty and commercial prosperity of
the country, the Empress’s patriotic iconoclasm may be justified.
The sacredness of the imperial person long postponed her

Majesty’s change of fashion, as no ignoble dress-maker could be
allowed to touch her. Countess Ito, the clever wife of the premier,
and leader of foreign fashions at court, was finally chosen as lay
figure, to be fitted until a model could be made. The Empress now
wears European dress altogether, conduct little short of heroic for
one accustomed only to the loose, simple, and comfortable garments
of her country. Her gowns are made of Japanese fabrics, and a lace
school under her patronage supplies her with flounces and
trimmings. At in-door state ceremonies, low bodices and court trains
are prescribed, and the Empress wears a tiara, rivière, and
innumerable ornaments of diamonds. The court ladies, who formerly
wore no ornaments but the single long hair-pin and the gold balls
and trifles on the obi cord, have been seized by a truly American
craze for diamonds, and greatly covet the new Order with cordon
and jewelled star lately established by the Empress.
In adopting the expensive foreign dress court ladies ruthlessly
sacrificed irreplaceable heirlooms of rich old brocades and
embroideries. For a long time their countenances and mien betrayed
the discomfort of the new dress, but they soon acquired ease with
familiarity, and no Japanese woman, in her first Parisian gown, was
ever such a burlesque and caricature as are the foreign visitors who
essay the kimono, and, blind to the ridiculous, are photographed with
its folds and fulness all awry. Only two foreign women have I ever
seen who could wear Japanese dress gracefully in the Japanese
way, with full regard to the meaning which each color, fold, pucker,
and cord implies.
Asahiko, the Empress Dowager, one of the Kujo family of kugés,
and of Fujiwara descent, maintained the old order and etiquette and
made few concessions to the new ways. She never appeared at
state functions, but the ladies of her suite, in beautiful ceremonial
dresses, were sometimes seen at Koyokwan No performances,
when given for one of her state charities. She spent half the year at
her summer palace at Hayama, and at her death in January, 1897,
was buried beside the Emperor Komei at the Senyuji temple in Kioto
with a midnight Shinto service. The most rigorous court mourning
was observed for one year, even military bands being forbidden to
play.
The Empress Dowager had nominal charge of the imperial
nurseries in the Nakayama Yashiki, where the children of the
Emperor and his inferior wives remain until their fourth or fifth years.
These wives are all of kugé birth, and have establishments within the
palace enclosure. They are an Oriental survival, of which little is said
or definitely known, although they still have a fixed rank.
The Empress Haruko has no children, and Prince Haru, the Crown
Prince, is the son of the Emperor and Madame Yanagiwara. Five
imperial princesses are living, but ten imperial children have died.
Prince Haru was born September 6, 1879, proclaimed heir apparent
August 31, 1887, and elected Crown Prince November 3, 1889,
dispossessing as heir to the throne Prince Arisugawa Takehito, a
young cousin, who had been adopted by the Emperor in the absence
of any direct heirs. Prince Haru attended the Nobles’ school, recited
in classes with other boys, and enjoyed a more democratic life than
his ancestors could have dreamed of. He is quick, energetic, and
ambitious, progressive in all his views, enthusiastic and tireless in his
occupations. With a naturally delicate constitution, his good health
has been the unceasing object of the devoted German and
Japanese court physicians, and he has always been exempt from
court functions and the wearisome public duties of the heir apparent
in other empires. His marriage to the Princess Sada, daughter of
Prince Kujo, took place at the Imperial Palace in Tokio in May, 1900,
and the birth of Prince Michi in April, 1901, was cause of rejoicing to
the empire.
CHAPTER XII
TOKIO PALACES AND COURT
Thirty different places have been the capital and home of the
Emperors of Japan, and Omi, Settsu, and Yamashiro were imperial
provinces before the Tokugawa’s city of Yeddo (bay’s gate) became
Tokio, the eastern capital and seat of imperial power. The Shogun’s
old castle, the Honmaru, or the Shiro, was the imperial palace until
destroyed by fire in May, 1873, and its interior is said to have been
far more splendid than the Nijo castle in Kioto. The yashiki of the
Tokugawa daimio of Kiushiu, on the high ground of the Akasaka
quarter, next sheltered the imperial household, though ill adapted to
its changing and growing needs.
At the end of 1888 the Emperor took possession of the new
imperial palace, which had been six years in building, and which
stands upon the ruins of the Shogun’s castle, protected by all the
rings of moats. Two drawbridges and two ponderous old towered
gate-ways defend the entrance to the front wing of the building, a
long yellow brick edifice, with the conical towers and steep roof of a
French château. The offices of the Imperial Household Department
are assigned to this foreign wing, except for which the new structure
is such a labyrinthine collection of temple-like buildings, as the old
palace at Kioto. Built on sloping and uneven ground, there is a
constant change of level in the innumerable roofs and floors. Before
it was completed a tour of the palace occupied a full hour, and
attendants and workmen were often lost in the maze. Combining
Japanese and European architecture, decorations, furnishings, and
ideas, the palace is a jumble of unsatisfactory incongruities, nobody
being found to admire thatched roofs and electric lights, partition
walls of sliding paper screens and steam-heating apparatus, a
modern ball-room, and a No dance pavilion all side by side.
Each lofty state apartment is a building by itself, the outer galleries
on the four sides being the corridors that touch other corridors at
their angles. Plate-glass doors in maroon lacquer frames, with
superb metal mountings, take the place of the usual paper shoji; but
with the low eaves and the light entering from the level of the floor,
the rooms need all their Edison lamps. Unfortunately, the best
examples of national decorative art are not preserved in this national
palace. Only the richly panelled ceilings are at all Japanese or
worthy their place. The famous embroidered ceiling and embroidered
wainscoting in the great drawing-room, and some makimonos in the
private rooms, exhibit the best Kioto needle-work. This wonderful
ceiling, costing ten thousand dollars, is panelled with yard-squares of
gold-thread tapestry, upon which are embroidered crest-like circles
of various flowers. The wainscoting is green damask wrought with
fruits, and the walls of the drawing-room are hung with a neutral-
tinted damask.
The beautiful Japanese woods and the marvellous Japanese
carvers were set aside, that the steam factories of Hamburg might
supply the cheap and ugly oak furniture of the banquet-hall. The
state table, seating one hundred people, surrounds three sides of a
square. The imperial arm-chairs are at the middle of the board,
facing elaborate buffets, framing painted tapestry-panels of the most
tawdry German design. The ball-room has a costly inlaid floor, and is
decorated in white and gold. The throne-room has nothing Japanese
but the crests in the panelled ceiling. A large gilded arm-chair stands
on a red-carpeted dais, with canopy and curtains of red plush, the
sacred sword and seal resting on lacquer tables beside it. At court
functions the Empress stands on a dais below and to the right of the
throne, with the imperial princes and princesses grouped about her.
The members of the diplomatic corps are placed at the Emperor’s
left, the ministers and higher officials fill the space facing the throne,
and the imperial guard line the gallery corridors that surround the
throne-room.
In the private apartments of the Emperor and Empress moquette
carpets, plush furniture, and easy-chairs confess foreign influence
and etiquette. The old rules of the simplicity of a Shinto shrine in the
sovereign’s dwelling are
observed in leaving all
the wood-work
unpainted, while wax-
candles and open
grates replace the
electric bulbs and gilded
radiators of the official
parts of the palace.
Some of the private
rooms display exquisite
panelled and coffered
ceilings of pure white
pine, or the beautiful
gray bog-wood. Each
suite has one room in pure Japanese style, and a tiny box for
celebrating the rites of cha no yu with a favored four. The Emperor’s
sleeping-room is the same unlighted, unventilated dark closet which
his ancestors used. This sleeping-room is E in the accompanying
diagram, surrounded by rooms occupied at night by his attendants
and guards.
Above this floor is a suite of studies, libraries, and secretaries’
rooms, all finished in the same exquisite woods, that show their
natural grain and color. There is a separate suite of rooms for the
Emperor’s toilet and wardrobe, a robing and disrobing room, and an
exquisite Japanese bath-room with inlaid floor and walls. The
sovereign uses the regular oval wooden tub of his people, which is
filled from a well in the adjoining court by means of the primitive
bucket and rope. The screens in these private rooms are
undecorated, or at the most only flecked with gold-leaf. From time to
time, by special command, artists will decorate these, and squares of
colored paper put here and there upon them invite the autograph
poems of the tea-drinking improvisators.
Somewhere in the recesses of the palace is a chapel or Shinto
shrine, but the officials are very reticent concerning it. It is known
that the mortuary tablets of the Emperor’s ancestors are there,
simple ihai, or pieces of pine wood, upon which are written the
posthumous names of the deceased rulers. Official bulletins often
announce that a newly appointed minister of the cabinet, or a
diplomatic officer about departing for his post is “ordered to worship
the cenotaphs in the imperial chapel,” before an audience with the
Emperor. Presumably, such devotions are a form equivalent to the
oath of allegiance in other countries. Upon the anniversaries of the
death of certain of his ancestors, on the days of the spring and
autumn festival, when the first rice is sown and harvested, as well as
before any great ceremonial, it is announced that the Emperor will
worship in the imperial chapel. The aged Prince Kuni Asahiko is
conductor of divine services to the imperial family; but everything
about that simple, formal state religion is baffling and
incomprehensible, and no one knows what form the Shinto services
in the palace assume.
The Emperor used to give a Japanese banquet on the morning of
his birthday to princes, ministers, and envoys. Chopsticks were
used, and the imperial health was drunk from saké-cups of fine egg-
shell porcelain, decorated with chrysanthemums and broken diaper
patterns in gold, which the guests carried away with them as
souvenirs. That celebration and the New-year breakfast are now
state banquets, served in foreign fashion, with sovereign and consort
seated at the head of the room. Indeed, the entire service of the
palace and of the Emperor’s table is European; silver, porcelain, and
glass being marked with the imperial crest of the sixteen-petalled
chrysanthemum, and the kiri mon of the Paulownia imperialis
appearing in the decorative design woven in the white silk napery
and traced on the delicate porcelain service. The palace lackeys are
uniformed in dress-coats with many cords and aiguillettes, striped
vests, knee-breeches, white silk stockings, and buckled shoes. Their
costume resembles that of the Vienna palace, colored sketches of
which Prince Komatsu sent home during his winter stay on the
Danube. The palace tiring-women wear the garb of Kioto days,
purple hakama and russet silk kimonos, and are the most fascinating
and almost the only Japanese spectacle in the imperial precincts. In
all modifications the usages of the Berlin court have been followed,
and no Prussian military martinet or court chamberlain could be
more punctilious in matters of etiquette than the Japanese court
officials.
Of the Empress
Dowager’s palace only
its gate-way is known.
The Hama Rikiu palace
is a sea-shore villa,
owing its beautiful
garden to the Shoguns,
but it is occupied only
when the ministers of
state give balls, or
IMPERIAL SAKÉ-CUP foreign guests of the
Emperor are domiciled
there, as was General
Grant. An imperial garden-party is held in its confines each spring,
and, with the Fukiage gardens adjoining the new palace, is a
supreme example of the Japanese landscape gardener’s art.
For the support of these palaces and the expenses of the imperial
family the Imperial Household Department’s expenditures were
3,000,000 yens in 1889 and 1899.
Tokio court circles have, of course, their factions and cliques, their
wars and triumphs, and the favor of the sovereign is the object of
perpetual scheming and intriguing.
The peerage of Japan numbers eleven princes, thirty-four
marquises, eighty-nine counts, three hundred and sixty-three
viscounts, and two hundred and twenty-one barons. All kugé families
are in this new peerage, and such daimios of the Shogun’s court as
give aid and allegiance to the Emperor, or made honorable surrender
in the conflict of 1868. Rank and title were conferred upon many of
the samurai also, the leaders in the work of the Restoration, and the
statesmen, who have advised and led in the wonderful progress of
these last twenty years; but the old kugés have never brought
themselves to accept the pardoned daimios and ennobled samurai
of other days. It is the Oriental version of the relations between the

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the DIGITAL TRANSFORMATION of the

AUTOMOtive INDUSTRy catalysts

Industry 4 0 The Global Industrial Revolution

From Industry 4.0 to Business Model 4.0: Opportunities

The Future of the Automotive Industry: The Disruptive

Building the Agile Business through Digital

Resistance Spot Welding Fundamentals and Applications

Agile Transformation: Structures, Processes and

Political Economy of Malaysia s Industrial Policy

How the Aid Industry Works The Politics and Practice of

The Digital Transformation

ISBN 978-3-030-83825-6 ISBN 978-3-030-83826-3 (eBook)

Originally published in German language by SpringerVieweg, Wiesbaden, 2021

Heidelberg, Germany Uwe Winkelhake

3.6.3 Wikinomics—New Ways of Cooperation . . . . . . . . . . . . . 41

5.5.1 Status of Transformation at General Electric . . . . . . . . . . 137

8 Information Technology as an Enabler of Digitisation . . . . . . . . . . . . . 257

The topic of “digital transformation” substantiates the fundamental change in private

1.1 Digitisation—A Hot Topic

© Springer Nature Switzerland AG 2022 1

Fig. 1.1 Cross-departmental corporate objectives for Digital Transformation (Transformation-

In addition to these objectives, many companies consider the potential of digi-

1.2 IT Development—The Exponential Function Explodes

1.3 Transformation of the Automotive Industry

currently often approached just one-dimensionally as islands. Further obstacles lie

1.4 Structure of the Book

To understand why there is no alternative to dealing intensively with the topic

of IT technology. It is important to understand future customers and at the same

Block 2 with Chaps. 5 and 6: Vision Automotive 2030; Roadmap Digitisation

Block 3 with Chaps. 7 and 8: Corporate culture; Flexible IT structures

Prerequisite for a successful implementation is a transformation culture with lead-

1.5 Defining Focus and Readership

The book provides recommendations for the development and implementation of

2.1 Moore’s Law

In April 1965 Gordon Moore described in an expert article an observation on inte-

© Springer Nature Switzerland AG 2022 9

2.2 Exponential Growth also for Digitisation

Fig. 2.2 Development of processing power (Kurzweil)

Fig. 2.3 Exponential development in different fields of application (according to Meeker)

2.3 Energy Requirement of IT

Fig. 2.6 Forecast of the energy consumption of IT technology (Jones)

belongs to be included in every digitisation roadmap and must be implemented in

2.5 Handling of Personal Data

The protection of personal data is as important as IT security, namely in Germany. The

2.6 Powerful Networks

In addition to IT security and the adequate handling of personal data, powerful

2.7 Technology Outlook

2.7.1 3D Chip Architectures

Fig. 2.7 Construction of 3D chips (Ruch et al.)

2.7.2 Flow Batteries

Fig. 2.8 Power density and

2.7.3 Carbon Nanotubes

2.7.4 Neuronal Networks

Another way to increase the performance of chips is the architecture. Today’s

2.7.5 Quantum Computer

2.8 Technological Singularity

© Springer Nature Switzerland AG 2022 29

Different patterns of use, behaviour and basic attitudes can be distinguished in

3.2 Mobile Economy

Fig. 3.3 Computer generations and numbers of units worldwide (Evans)

3.3 “Real Time” Expectation in the Mobile Ecosystem

The audience is as interesting a study as the players, each little

European sovereigns and reigning families are parvenus