INDUSTRY 4.0 will impact everyone and everything in the social, economic and political spheres. It will provide us with almost instantaneous information on most things, making us more informed and therefore more demanding.
It is a fact that the industrial world is in the midst of a significant revolution regarding the way products are manufactured, mainly due to the digitisation of the manufacturing process. The fourth industrial revolution, or simply Industry 4.0 (coined in 2011 by a German initiative of the federal government with universities and private companies), is currently occurring in manufacturing. We therefore need to take note of it and anticipate its potential impact on our developmental plans and prepare ourselves accordingly so that we are not left behind.
From the first industrial revolution in 1784, mainly driven by steam power, to mass production using electricity in the second revolution in 1879, to the third industrial revolution of computers and automation in 1950, the fourth industrial revolution will further enhance automation with smart and autonomous systems mainly driven by data and machine learning. Essentially computers are being connected to communicate with one another and to ultimately make decisions with minimal human involvement. Industry 4.0 is a new industrial age in which several emerging technologies are converging to provide digital solutions.
Some of the emerging terms related to Industry 4.0 include cloud computing, big data analytic, cyber physical system, 3D printing (additive manufacturing), cryptocurrency (blockchain), the internet of things (IoT), artificial intelligent (AI), augmented reality, among others. These will continue to grow with time as digital enterprise emerges.
In this revolution, we are going to see machines which can autonomously detect when they need spare parts, production systems which can run their own quality control during operation and anticipate potential break downs, smart supply chain management and, among other things, robots that can autonomously recognise and move components around. AI and “edge computing” are being combined to offer new smart products, new smart business processes and new business models offering huge productivity upside. The future is no longer what it used to be!
The concept of Industry 4.0 involves many technologies creating hitherto unknown synergies which will create new industrial manufacturing possibilities. There are five pieces that define Industry 4.0 at its core and when integrated together, they create capabilities which have never been possible before. These include:
- Smart factory, which is the seamless connection of individual production steps, from research, design, prototyping, production, distribution and client management. This will lead to an increase in productivity levels and competitiveness through a significant reduction in costs.
- In the near future, machinery and equipment will be able to improve processes through self-optimisation, where systems can autonomously adapt to production variables. For example, smart machines will manage supply chain logistics, coordinate production and global distribution. These are termed “front end technologies” consisting of smart manufacturing, smart products, smart supply chain and smart working.
- Cyber physical systems, which are integrations of computation, networking and physical processes, will monitor and control physical processes with feedback loops where the physical system reacts, uses software to interpret action and tracks results.
- The internet of things (IoT) is the connection of all devices to the internet and each other. It is built on cloud computing and networks of data-gather sensors and it is mobile, virtual, and instantaneous. This interconnection will enable “smart factories” to use data to manufacture, move, and report and learn at astounding rates and efficiently too, thus improving productivity and quality.
- Big Data will be key and this is basically a collection of data from traditional and multiple digital sources which is collected from systems, sensors and mobile devices. These are termed the “base technologies” which comprises technologies that provide connectivity and intelligence for front-end technologies.
We then have what is termed “interoperability” which is what happens when we bring the front end and base technologies together. It is the connection of cyber-physical systems, humans and smart factories communicating with each other through the IoT. Added to this will be the ability of robots to eventually interact with one another and work safely side by side with humans — known as cobots. Eventually they will also be able to learn from humans.
The potential impact of these technologies on economic and industrial development is unimaginable. One thing that is certain is that those countries which ignore this new wave will do so at their own peril. The challenge to developing countries and governments is the urgent recalibration of their industrial development plans and the creation of a new ecosystems which facilitate early adoption. Education will be key.
The greatest fear of these new technologies is, of course, possible job losses. In a detailed research in 2017, McKinsey Global Institute (MGI) calculated that intelligent automation technologies could save employers worldwide a staggering US$15 trillion in wages by 2030.
According to McKinsey: “About half the activities people are paid to do globally could theoretically be automated using currently demonstrated technologies,” McKinsey concluded, estimating between 400 and 800 million current occupations could be displaced by 2030.
McKinsey cited jobs involving physical labour, data collection or processing, manufacturing, retail, and accommodation or food services as the most vulnerable during the shift to Industry 4.0.
However, combined with anticipated employment growth in sectors like elderly care, green technology, and consumer goods and services, McKinsey projects the overall creation of 555 million to 890 million new jobs by 2030, declaring that “this job growth could more than offset the jobs lost to automation.”
McKinsey estimates 75 million to 375 million people will have to switch occupations and learn new skills by 2030, “implying substantial workplace transformations and changes for all workers”.
“Our analysis shows that humans will still be needed in the workforce,” McKinsey concludes.
“The total productivity gains will only come about if people work alongside machines. That, in turn, will fundamentally alter the workplace, requiring a new degree of cooperation between workers and technology.”
As we in Zimbabwe pursue our re-industrialisation it is critical that first, our leaders and experts are up to speed with the above developments and second, that our Ministries of Industry and Commerce, Education and ICT immediately set up a taskforce to advise on how we can incorporate and adopt Industry 4.0 technologies in our national industrial development plans.
I think we have a unique opportunity to reinvent our industrial base and take full advantage of the latest technological developments. We cannot rebuild using old technologies, as this would once again put us back and create uncompetitive and expensive products which nobody will buy.
Industry 4.0 therefore offers us the opportunity to leap frog ahead, but serious investment in new ICT infrastructures and education will be key.
The World Economic Forum (WEF) has advised that governments must provide impetus for research, infrastructure, IT security and education.
According to the WEF, it will be important to have the right regulatory impetus from government, in a coordinated form, across national borders.
The WEF has identified four key issues which need immediate attention by governments as follows:
- Creating an ecosystem where innovations can grow through support for application-related research and investments;
- Establishment of an area-wide IT infrastructure and fast internet access are basic requirements. “Industry 4.0 needs, not just more bandwidth, but also very fast transfer times, combined with maximum availability.”;
- IT security is essential to the success of Industry 4.0. Digitalisation and cybersecurity have to go hand in hand; and
- All levels of education have to be reoriented to the new digital developments. “Expanded skills in IT, software, programming, communications technology, IT security and data analysis will be indispensable for future industrial applications.”
In conclusion, the big challenge is not the technology itself, but will be how to manage the effects of the industrial revolution 4.0 and to make the most of the new opportunities it provides. Zimbabwe recently announced the finalisation of its national industrial development plan. I pray that it has taken account of a digitised future significantly different from today. If not it may be necessary to go back to the drawing board as a matter of urgency. More important, however, will be political leadership. The opportunities we face in the future cannot be appreciated and taken advantage of without a profound paradigm shift of what is possible and what is inevitably coming our way through Industry 4.0.
It is time to re-think and re-invent ourselves.
Musewe is an economist. — firstname.lastname@example.org. These weekly New Perspectives articles are co-ordinated by Lovemore Kadenge, immediate past-president of the Zimbabwe Economics Society — email@example.com and mobile: +263 772 382 852.