The current study, based on surveys on the modernization of production, focuses on the interplay of two dimensions: the development of production workers’ skills and a way of organizing work that actively involves employees in value-added, improvement, and innovation processes. The study finds that companies that develop both dimensions in a balanced manner significantly outperform those that rely on isolated measures or do not adopt human-centered approaches, particularly with respect to product innovation and labor productivity.

Humans remain central to the design of technological production systems

“Contrary to the widespread belief that human labor is increasingly being replaced in production, our findings show that humans continue to play a central role,” said Dr. Djerdj Horvat, project manager in the Industrial Change and New Business Models Business Unit. Fully automated systems reach their economic and technical limits, particularly in companies with a broad range of product variants, small batch sizes, frequent product changes or limited margins. Therefore, what matters is not only which technologies are used, but also how employees are empowered to use them effectively, further develop them and incorporate them into processes of operational improvement.

The analysis makes it clear that training and participatory organizational concepts are most effective when they work in tandem. Qualified employees need structures in which they can apply and contribute their knowledge. Conversely, participatory formats only realize their full potential when employees possess the necessary skills.

Despite their proven effectiveness, integrated approaches have not yet been widely adopted

The analysis shows that human-centered value creation is not yet widely established in the manufacturing sector. Around 30 percent of companies fail to implement the relevant practices in at least one of the two dimensions studied. Another 30 percent pursue an approach that is disproportionately focused on people, for example, by prioritizing training over organizational participation structures. Only 17 percent of companies demonstrate a well-balanced approach to human-centered design, combining a broad range of training opportunities with multiple human-centered organizational concepts.

Integrated approaches exhibit the strongest correlation with positive performance outcomes. Companies with a well-balanced human-centered approach achieve the highest scores in both the product innovation rate and labor productivity. Even companies with a moderately human-centered approach outperform the average in labor productivity. In contrast, companies with isolated or fragmented measures often fail to realize their full potential.

SMEs, in particular, still have significant room for improvement

There are notable differences based on company size. Larger companies make use of training programs and human-centered organizational concepts significantly more often than small and medium-sized enterprises. While about two-thirds of larger companies utilize training programs extensively, SMEs typically make use of only a few individual programs. When it comes to organizational concepts, the gap is smaller but still noticeable: About one-quarter of SMEs do not use any of the human-centered organizational concepts studied.

Industry and product characteristics also play a role. Companies with more complex products are more likely to offer a broader range of training programs. However, this kind of systematic organizational integration of employees is not found across the board. This points to a key area for action: Companies should take a more integrated approach to skills development, employee participation and technological design.

Focusing on people as a key economic driver

The findings suggest that human-centered value creation should not be viewed solely as a social or work-organization approach. Rather, much like technology-oriented modernization strategies, it can contribute to the sustainable performance of companies. A key prerequisite is that training is not conducted on an ad hoc basis but is strategically integrated with clear participation structures, expanded opportunities for employee initiative, and a human-centered approach to human-technology interaction.

“The study shows that human-centered value creation is far more than a normative guiding principle. It can strengthen innovation capacity and productivity, especially when companies consistently combine skills development with organizational participation,” said Horvat.

This study is based on the 2022 surveys on the modernization of production. For three decades now, Fraunhofer ISI has been conducting surveys on the modernization of production on a regular basis. Every three years, it surveys a representative sample of approximately 1,300 companies across the entire manufacturing sector. With its comprehensive and fact-based design, the survey enables detailed analyses of how modern and productive companies in the manufacturing sector are.