Digitalization in a traditional industry – revolution or evolution? June 2017 Corporate Strategy

Where can you find out what “going digital” is all about? CeBIT is the largest and most international represented computer exposition held in Hannover/Germany 2011 Cloud Computing – Work and life with the cloud 2012 Managing Trust – Building trust as a basis for progress and growth 2013 Shareconomy – Sharing and joint utilization of knowledge, resources Source: www.cebit.de 2014 Datability – Processing data and responsible use over the long term 2015 d!conomy – Digital transformation of the economy and society 2016 d!conomy: join - create - succeed – Putting people at the heart of the digital transformation 2017 d!conomy: no limits – Centering on business opportunities via digitalization

In Evonik’s relevant end-markets products, value creation and business models are changing End-consumer and products Competitors and business models Increasing connectivity and self-monitoring Personalized offerings and interactions Increased availability of information Market entry of technology companies Increasing consolidation tendencies Approaches for business development and R&D

Digitalization means creating, communicating, delivering, exchanging offerings that have value for customers.

Digitalization strategy in an “old economy” company is about managing priorities Could digital technologies … … improve the way you generate value? … change how you target the customer? .... affect the value proposition? … enhance the enterprise capabilities? … help to differentiate from the competition?

When will I be replaced by algorithms and robots? Thesis: About 50 percent of today‘s occupations in the western world will no longer exist in 2030 (R. D. Precht; M. Broy in Die Zeit Nr. 5/17) Background: Thesis paper from Frey und Osborne (2013) The Future of Employment on the automation of 702 jobs in the US (URL: http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf) Facts: “First, together with a group of ML researchers, we subjectively hand-labelled 70 occupations, assigning 1 if automatable, and 0 if not. For our subjective assessments, we draw upon a workshop held at the Oxford University Engineering Sciences Department, examining the automatability of a wide range of tasks. Our label assignments were based on eyeballing the O∗NET tasks and job description of each occupation.” (C. B. Frey; M. A. Osborne (2013): The Future of Employment: How Susceptible are Jobs to Computerisation, S. 30) Conclusion: Digitalization is a design task rather than a natural law

When will I be replaced by algorithms and robots? Thesis: About 50 percent of today‘s occupations in the western world will no longer exist in 2030 (R. D. Precht; M. Broy in Die Zeit Nr. 5/17) Base: Thesis paper from Frey und Osborne (2013) The Future of Employment on the automatiion of 702 jobs in the US (URL: http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf) Facts: “First, together with a group of ML researchers, we subjectively hand-labelled 70 occupations, assigning 1 if automatable, and 0 if not. For our subjective assessments, we draw upon a workshop held at the Oxford University Engineering Sciences Department, examining the automatability of a wide range of tasks. Our label assignments were based on eyeballing the O∗NET tasks and job description of each occupation.” (C. B. Frey; M. A. Osborne (2013): The Future of Employment: How Susceptible are Jobs to Computerisation, S. 30) Conclusion: Digitalization is a design task rather than a natural law