Name: European politicians want independence, but business leaders say it's not possible | The Dip Podcast
Uploaded: 2026-01-27T16:59:12.000Z
Duration: 24 min 32 s
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You might have heard all of the noise over the past week over European sovereignty for its critical industries.

Modal verbs - A2

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If it decides it needs to cut ties with the US or China, would its digital factories fail and its AIs just stop replying?

Well, in this episode of the Dip, I spoke to Cedric Naika, who's in charge of everything digital at the German industrial firm Siemens.

They're the biggest company for factory automation and software in the world.

So I asked him if China is dictating Europe's future simply because the economics of how they make stuff is unbeatable.

If you look at manufacturing, China is the manufacturing place in the world.

If you want to see the most modern factories, the most advanced manufacturers, you go to China.

So you have to be hyper competitive in China.

So one of the things we did is we moved actually R and D, development, resource and supply chain resources into China to be able to compete against those Chinese competitors.

It's like if you want this gym in which you, you work out with the people which are the fittest and in that space is China.

We also moved some of the resources into the US because that market also goes in the direction.

It's a world where you have champions which are coming out of China, out of the us but perhaps also at some space out of India.

And you need to adapt and forward, invest into those changes rather than being shaped by them.

Ursula von der Leyen has said that Europe must de risk its economy and not get too tangled up in all of the potential geopolitical risks.

Is Siemens in a position to be able to navigate this complex geopolitical world?

Let's say we all need to sort of work with the new realities.

I mean, we have an advantage that Werner von Siemens, when it was created 1847.

In 1847, Werner sent two of his brothers, one to London and one to actually St.

Petersburg to be able to set up those capabilities.

Siemens has been very, very global in its footprint and its development for a long time.

So we have the capability to be very close to the market, but

that's being accelerated, to be very honest.

So we're looking at our supply chain and making sure that they're on a global level, are as independent as possible.

But the reality, the world is highly, highly interdependent and we want to leverage the capabilities we have by really Interconnecting the swat.

So we are adapting for the worst case, but

we're preparing for the worst case and adapting for it.

But we're hoping also for the best case in which this goes in the right direction in terms of those supply chains.

Much more important will be our customers prepared, because if we are super prepared, but

So we need to work with our customers also to make that happen and really localize their supply chain and their development also.

And just one of the projects which Siemens is involved with on the software level is this industrial AI cloud, which was launched by Deutsche Telekom and Nvidia.

And it's one of their kind of pushes for digital sovereignty.

Digital onshoring to make sure that the data is handled in Europe.

Why did you think that your company should be part of this 1 billion euro project?

Because we have different customers and they have different demands.

So just for everybody, Siemens is one, if not the biggest industrial software provider in the world.

Not only that we are big in automation, where every third machine is from us, but

And a lot of our European customers say, I want to have those software which helps me design a product, simulate and test it, or plan.

My factory should be in a European cloud environment, on an Nvidia environment.

And that's why we work with Deutsche Telekom to make this software available on those environment.

We work with many sort of different vendors, but

there's definitely a market especially for, if you think more of defense or critical infrastructure, which says, I want to have a cloud infrastructure which actually reflects my needs in terms of independence and sovereignty.

But does it really offer digital sovereignty when the AI stack is American, let's say, and

And there's no, at this point, there is no major European alternative which can compete with that.

I mean, it would be completely foolish to think that we will ever have a completely European software stack.

We will have a completely European PC, GPU, etc.

The reality is that the world is extremely divided and it's good as long as we're dependent on each other, we need each other and we need to work with each other and find ways.

So my point of view is we can de risk it, but we can never completely derisk it.

So the importance is what can we do to be able to have certain periods of stability if things change and can adapt to it.

But we will always be dependent on each other.

But in this time of geopolitical risk with some sort of event which could happen, we can't predict what it might be which could disrupt this kind of tech supply chain.

What are you telling your customers to reassure them?

Because if we are so tied up in this complicated world with all of this very crucial hardware coming from all of these other places, then we may struggle if there is an event, whatever that may be.

The thing I tell all of my customers is you cannot predict the future.

I'm always being asked what is so and so going to do and so and so going to.

All I can say is in times of these changing environments, the only thing you can do is focus on your agility.

So I'm asking all of my customers is be as agile as possible in your supply chain.

two or three and them to be sort of separated, have your factories way more adaptable.

So the time in which I built my factory in the lower, lowest cost country to be able to have cheap labor and feed the world from it, that time is over.

So I'm asking my customers, think through it.

Take the capability to really sort of build agility and go as much digital as possible.

Because when you're digital, you can actually do a lot of with the data before you do this.

So, for example, we have a digital twin of all of our supply chain.

So if a black swan or I don't know is happening supply crisis in chips, there's no chips more available.

So we're sharing with our model digitally what might happen in physical.

And what the best reaction would be to be able to do this.

We do this if there's an earthquake, somebody we said, okay, what are the other suppliers?

If we have different sort of components, can we test them before we actually produce them?

So you really need to, what we call, we call it a shift left.

We shift into the digital world because there you can do a lot of things you couldn't actually do physically and then choose the best option at that time.

Currently, more than half of the 800 largest European companies which are surveyed by Accenture have yet to scale any major AI investment.

And at the same time, the average European worker produces only 76% as much as their US counterpart.

There's no shortage of offerings from Siemens and from all kinds of levels when it comes to AI, whether it's S and P and Sage and all of these other kind of corporate offerings from AI.

So why are companies like yours still having to state the case for AI?

I mean, let's be very honest, we love change when it happens to others, but

we don't like it when it happens to ourselves.

So the biggest thing we do as Siemens is to change ourselves in terms of adopting AI.