Last month, the chief executive officer of one of the country's largest manufacturers spoke in a closed-door meeting to a group of Japanese executives on his company's global strategy. Remarkably, he spend 20 percent of his time praising German companies, from traditional heavyweights such as Siemens and Thyssen- Krupp to young up-and-comers such as SAP and Infineon.

The Japanese CEO focused on these firms' global lead in what some describe as the fourth industrial revolution. He was referring to Industry 4.0, a term that was first used at Hanover Fair in 2011 and has since become a cornerstone of the German government's industrial high-tech strategy.

Put simply, Industry 4.0 aims to computerize traditional manufacturing and create a "smart" factory. Universal digitization links all productive units in an economy, thereby integrating production with suppliers, customers and business partners. Cyber-physical systems and an increasing use of the Internet underpin all these transactions on a technological basis.