Globalization is at a crossroads. While it has raised millions out of poverty and boosted global trade, it came at a cost to our climate, our environment, our resilience and our communities. The pandemic and the war in Ukraine were a wake-up call, prompting governments to rethink what is critical for the success of their economies. And businesses to rethink their value chains.

The question is, how can we seize this moment to build something better? And reshape the global economy to be more equitable and sustainable.

Still connected, but closer to home

A better balance between global and local, so-called glocalization, would offer the best of both worlds. Connecting to the global economy stimulates competition and innovation and gives access to other markets. Producing close to customers spreads prosperity and creates more resilient and sustainable economies. So how can we make this happen?

We can start by using technology innovations to get closer to end markets. For example, sports shoes have been made in the Far East for years. Chamatex Group is bringing sneaker manufacturing to France with its Advanced Shoe Factory 4.0. Using technologies such as digital twins and autonomous robots, they can flexibly manufacture different shoes for different brands. It’s a model for affordable, low-carbon, agile production and can be deployed across other consumer goods, even food.

In the next 25 years, the earth will need to feed 10 billion peoplenearly 70% will live in cities. Today, we transport plastic-wrapped foods over long distances. The founders of 80 Acres Farms, Mike Zelkind and Tisha Livingston believe there is a better way. Through vertical farming, they can grow 300 times more food than an ordinary farm, using less land, less water and being closer to cities. And we’re supporting them with automation and digitalization technologies to optimize and scale their solution.

80 Acres Ohio Facility, Vertical Farming Plants Under Purple Lights

Using technology, 80 Acres Farms can grow sustainably 300 times more food than a regular farm. Image: Siemens

Decarbonizing our energy systems would have an even bigger impact. Just 20 years ago, the German town of Wunsiedel was struggling. Businesses were closing and jobs were scarce. But Marco Krasser, head of the local utility, envisioned an energy industry that would revive his town’s fortunes. And we helped him to realize it. As a result, Wunsiedel has built a reliable, green energy supply and a thriving future by harnessing solar and wind power with a microgrid, battery storage and a green hydrogen plant.

What’s unique about the industrial metaverse is the ability to work on real things together virtually, whether designing buildings and power grids or servicing machines – from anywhere.

— Roland Busch, President and CEO, Siemens AG

Making new products from old ones

However, we need to use our planet’s resources wisely to secure everyone’s future. Today, less than 9% of natural resources are recycled. It doesn’t have to be this way.

With digital twins, we can design things better so they don’t end in landfills – as we did with our Mireo trains, which are 95% recyclable. With 3D printing, we can manufacture goods faster with less waste. And with the help of technology, we can recycle more.

Swedish battery developer Northvolt intends to do just that. Its new gigafactory in Sweden is about the size of 33 soccer fields and their ambition is just as big – to make the world’s greenest batteries. Northvolt’s Chief Digitalization Officer, Mikael Söderberg, told us about their plans.

By 2030, half of their raw materials should come from old batteries. And we’re helping them to achieve this through state-of-the-art technologies. So not only is this good for the planet but it’s also good for their supply chain.

The industrial metaverse is coming

All of the examples mentioned were only possible with technology, with combining hardware and software, the real and the digital worlds.

More and more, these two worlds are converging. That’s why I believe the defining technology of the next 20 years will be the industrial metaverse. An always-on, immersive world seamlessly connected to the real world. People can gather there to build things or solve problems as if they were physically there together.

No matter the factory’s location, experts can analyze any issues impacting its operations in a physics-based, photo-realistic virtual reality. They can try out solutions using simulation. They can even travel back in time to find out what caused the problem. While this may sound like science fiction, many building block technologies, such as digital twins, are widely used today.

Even cities have digital twins. In Berlin, we’re using one to design and build a sustainable district, Siemensstadt Square. Once it’s up and running, the twin will analyze how people use their city, what’s happening with the power grid or the traffic on the streets to make it more livable. And soon enough, it will be part of the metaverse.

Anticipating ageing societies

What’s unique about the industrial metaverse is the ability to work on real things together virtually, whether designing buildings and power grids or servicing machines – from anywhere.

For ageing societies facing future labour shortages, this notion will be key. It’s a problem that is impacting Europe, North America and Japan and it’s growing. By 2050, almost 40% of China’s population will be over retirement age.

We can prepare for such a future. Take our work with Mercedes-Benz. Its CEO Ola Källenius has plans to make production more efficient and sustainable. Their Berlin factory, which first opened in 1902, is part of this transformation. Now a digital hub for new technologies, it’s also a place for learning. Here, employees can use technologies such as augmented reality and simulation to acquire new skills. It’s an approach that we at Siemens also use in our plants.

Glocalization offers a chance to restore the trust of local communities in the global economy. It can provide a pathway to a more sustainable world. Globalization isn’t going away – it’s changing. And I’m convinced this brings new opportunities to shape it into something better.