Guide to The Fourth Industrial Revolution (Industry 4.0) in 2024
The global Industry 4.0 market was estimated at $70B in 2019 and is expected to reach $210B by 2026 as more manufacturing businesses are optimizing their digital transformation strategies. Industry 4.0, also known as the fourth industrial revolution, aims to create smart manufacturing machines and systems that are connected, automated, and analyzed thoroughly to improve production, reduce costs, and optimize processes. However, the fourth industrial revolution still faces challenges as more data privacy regulations are pressing through, and the gap in technical skills is widening.
In this article, we explore what is industry 4.0, where it emerged from, what are its components and related technologies, its examples, and where it is going in the future.
What is Industry 4.0?
Industry 4.0 is the ongoing movement to transform and automate traditional manufacturing and industrial processes and practices by leveraging modern technologies and tools. The term “Industry 4.0” was first introduced in 2011 by German scientists to promote the advances in AI and automation in manufacturing which aims to advance former industrial revolutions.
Source: Statista & Kearney analysis
Industry 4.0 relies heavily on big data, IoT sensors and systems, and automation, and leverages end-user perspective as a driver of technological innovation.
What are the benefits of Industry 4.0?
Industry 4.0 aims to create connected and automated processes leveraging robotics, analytics, process mining, and digital twins, to generate growth in production, revenue, and customer loyalty. Industry 4.0 enables numerous benefits such as:
- Increased productivity:
- Reduced costs:
- Enhanced customer experience:
- Enabling product customization according to customer preferences and behavior.
- Strengthening customer involvement and loyalty.
- Society benefits:
What are the components/technologies of industry 4.0?
Top technologies and components of the fourth industrial revolution and manufacturing digital transformation include:
- Advanced robotics: Advanced robotics are systems that combine robots’ hardware sophistication with smart sensors (e.g. ultrasound, light sensors, touch sensors, etc.) which makes them easier to train to perform repetitive and non-repetitive tasks in a manufacturing environment. Leveraging advanced robotics is estimated to reduce conversion costs by ~15%.
- Autonomous systems: Autonomous things are devices that work on specific tasks autonomously without human interaction by leveraging AI algorithms. In manufacturing, autonomous systems can collect information from the surrounding environment, adapt, and make data-driven decisions without the intervention of a human user.
- Cloud computing for storing and sharing data with business partners and employees instead of using on-premise data storage.
- Cybersecurity: Cybersecurity solutions aim to protect business data including manufacturing processes, inventory, assets, costs, and client data. Cybersecurity solutions may include homomorphic encryption, ransomware detection tools, and privacy enhancing technologies.
- Sensors: Such as industrial Internet of things (IIoT) and RFDI technologies
- Simulations: Such as Digital twin and digital twin of an organization
- 3D printing
- Virtual and augmented reality
- Robotic process automation (RPA): to automate repetitive GUI processes.
- Manufacturing analytics: for analyzing data collected from manufacturing processes and making data-driven decisions about products, processes, inventories and assets, as well as infer insights about customers’ needs and market trends.
To explore in detail industry 4.0 technologies, feel free to read our in-depth article on top 10+ technologies for manufacturing digital transformation.
What are the challenges that face Industry 4.0?
Some of the major challenges that face industry 4.0 include:
Interconnectivity and cloud computing have a significant impact on data privacy as they expose privileged business and client data to breaches and cyber attacks. According to a Deloitte report, ~84% of businesses believe that the level of cyber risk will increase as a result of adopting industry 4.0 technologies.
Lack of technology adoption
Many businesses believe they do not have sufficient infrastructure to ripe the benefits of implementing Industry 4.0. Only 14% of chief executive officers are confident that their organizations are fully prepared to incorporate the changes brought about by Industry 4.0, and 20% of respondents believe that their businesses lack any appropriate infrastructure.
Lack of technical skills
With robotics, AI, and analytics as pillars of the industrial revolution, industry 4.0 is destined to create more technical and maintenance jobs. Reports have estimated that cognitive technologies such as robots, AI, machine learning, and automation will create 9% of new U.S. jobs by 2025 which will be focused on robot monitoring, data science, and content curation. However, numerous businesses have reported a lack of skilled employees in the areas required for implementing Industry 4.0. For instance, in a 2018 survey on UK manufacturers, 88% of respondents said that lack of technical skills is the major issue hindering investment in industry 4.0 technologies.
What is the future of Industry 4.0?
Advances in AI, robotics, and automation will lead the way toward Industry 5.0 which aims to:
- Have humans working alongside collaborative robots.
- Up-skilling and re-skilling workers, particularly for digital skills.
- Adopt a human-centric approach while leveraging the industry 4.0 technologies.
- Achieve “Lights-out” manufacturing factories that rely on robots to complete processes and tasks even outside work hours (i.e. when the lights are out).
Therefore, manufacturing businesses need to optimize their digital transformation strategies to keep up with the fast pace of industrial technologies and revolutions.
If you are ready to leverage manufacturing technologies in your business, don’t forget to check our comprehensive lists of manufacturing software and tools:
- Manufacturing Analytics Software
- IoT Software
- Digital Twin Software
- Manufacturing API
- Automation Software
- Cloud Software
And let us guide you through the process:
Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 60% of Fortune 500 every month.
Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.
Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised businesses on their enterprise software, automation, cloud, AI / ML and other technology related decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.
He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.
Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.
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