German companies bet on AI but payoff could be years away

livemint.com:

German businesses are increasingly experimenting with artificial intelligence to become more productive, but some caution the gains the technology promises could be years away. From automating processes to optimizing supply chains, German companies are resorting to AI tools for a growing range of functions. The technology is expected to make work more efficient by cutting repetitive tasks and freeing employees up for new, higher-value jobs.

Productivity growth in Germany, like in many other industrial countries, has stalled in recent years, a trend that has economists worried about possible long-term implications as the population ages. The popularity of OpenAI’s ChatGPT chatbot since its launch in late 2022, followed by Microsoft’s Copilot and Google’s Gemini, sparked a wave of investments from companies globally. Some businesses in Germany are optimistic that the technology could boost productivity.

“AI is probably the most transformative technological development in recent decades. It will fundamentally change tasks and qualification profiles across all industries," said Carsten Knobel, chief executive at consumer-goods company Henkel. The maker of Dial soap and Snuggle fabric softener has been training its workforce in AI, which it uses to automate processes in its adhesives business.

In its production facilities, a central cloud server collects millions of data points from its machines equipped with sensors, analyzing and processing them with the help of AI to maximize efficiency and detect any flawed products or packaging. Henkel is running a number of pilot projects with technology partners like SAP, Adobe and Microsoft. However, Knobel says it is almost impossible to predict how the company will use AI in five