Shaping the transformation of the automotive industry with a digital mindset

The transformation of the automotive industry has become a widely used term in Europe in recent years. It refers to current shifts in market share driven by developments in vehicle electrification and software, as well as the entry into the market of new players from other sectors and regions, particularly from China. According to a McKinsey study, a significantly higher proportion of R&D staff (45%) at new market entrants possess software skills than at established European companies (15–20%) (Cornet et al., 2023).

Software skills are important in automotive companies for two main reasons. Firstly, they enable more efficient and robust business processes. The R&D department benefits from the use of virtual and connected development tools because they reduce development times and the number of prototypes required. Furthermore, this allows anomalies to be detected earlier in the development process, leading to fewer costly design changes. In manufacturing, marketing, sales, HR, IT, and other business areas, software skills help employees find leaner methods for their daily tasks and better understand correlations through data analysis. Secondly, software skills are relevant for the development of software-based products that deliver customer value. Key innovations in the field of vehicle software include driver assistance systems, automated driving systems (ADS), over-the-air updates (OTA), connectivity features such as Vehicle-to-Everything (V2X) communication, predictive maintenance, driver monitoring, cybersecurity, personalisation, user interfaces and user experience (UI/UX), speech recognition, range improvement, charging management, and cloud services.

Digital mindset as a transformation strategy 

To succeed in a transformation, companies need a broader context for change than just a technological one (Forsythe and Rafoth, 2022). They require a combination of digital mindset and digital competence. Ferrari (2012) defines digital competence as a set of knowledge, skills and attitudes required when digital technologies are used for activities ranging from knowledge sharing to communication. However, “... learning new technological skills is essential for digital transformation, but not enough. Employees must be motivated to use their skills to create new opportunities.” (Neely and Leonardi, 2022, p. 51).

Fostering digital mindsets among employees can be regarded as a corporate management competence. In this context, ‘fostering’ refers to the proactive search for and creation of development opportunities based on new combinations of digital technologies. To gain a competitive advantage, manufacturers invest considerable effort in incorporating and utilising digital technologies in their products. As digital competence grows in importance, the digital mindset also plays a greater role within organisations.

Two key activities are necessary for digital transformation: preparing employees for a new digital organisational culture and designing and adapting systems and processes (Neely and Leonardi, 2022, p. 51). Companies have different approaches to dealing with the challenges of digital transformation. From identifying the necessary process changes and selecting IT tools to assessing customer requirements and training staff, the question arises: how can traditional automotive companies foster a digital mindset?

Fostering a digital mindset

Mindsets can change (Limeri et al., 2020), so companies should support their employees in developing a digital mindset early on in their careers (Neely and Leonardi, 2022). This enables companies to implement tailored measures and create a working environment that fosters openness to digital technologies in day-to-day work, as well as the development of new software-based solutions.

Steinbeis School of Management and Technology (SMT) combines academic excellence with hands-on industry experience to develop the next generation of digital and technology-driven professionals. Through its intensive, practice-oriented dual study programs, SMT equips students with the digital mindset, technological expertise, and problem-solving capabilities that companies need to stay competitive in rapidly evolving industries.

For nearly a decade, SMT and the Mercedes-Benz Proving Ground Development Team Immendingen have successfully collaborated to give students the opportunity to work directly on real-world automotive innovation projects. Students not only gain advanced digital and engineering skills, but also apply data-driven approaches and digital mindset to practical business processes, thereby creating measurable value by working innovatively, and contributing directly to digital transformation projects from day one.

A defining element of the program is its strong integration of academia and industry. This combination helps shape the future. Students work on a dedicated two-year company project. Throughout the program, they are jointly supported by university supervisors and experienced business mentors, ensuring close alignment between academic development and organizational objectives.

• Cornet, A., Heuss, R., Schaufuss, P., Tschiesner, A. (2023). A road map for Europe’s automotive industry. McKinsey & Company. Retrieved from https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/a-road-map-for-europes-automotive-industry

• Ferrari, A. (2012). Digital competence in practice: An analysis of frameworks. JRC Technical Reports, European Union, Joint Research Center. https://dx.doi.org/10.2791/82116

• Forsythe, J., Rafoth, J. (2022). Being digital: Why addressing culture and creating a digital mindset are critical to successful transformation. Insigt, 25 (1), 25-28. https://doi.org/10.1002/inst.12368

• Limeri, L. B., Carter, N. T., Choe, J., Harper, H. G., Martin, H. R., Benton, A., Dolan, E. L. (2020). Growing a growth mindset: Characterizing how and why undergraduate students’ mindsets change. International Journal of STEM Education, 7, 1-19. https://doi.org/10.1186/s40594-020-00227-2

• Neely, T., Leonardi, P. (2022). Developing a digital mindset: How to lead your organization into the age of data, algorithms, and AI. Harvard Business Review. www.hbs.edu/ris/Publication Files/Developing a Digital Mindset_81f3f69d-e28d-483e-8d1e-ce0ee159c0bb.pdf