This year’s summit in Davos is meant to raise awareness of the opportunities of Industry 4.0 for everyone – not only in Europe, but worldwide, writes Thilo Brodtmann.
Thilo Brodtmann is Executive Director of the German Engineering Association (VDMA). The organisation represents more than 3,100 mainly small and medium sized companies.
The World Economic Forum is known for many things, but certainly not for understatement. Last year’s annual meeting in Davos was held under the slogan: “The New Global Context”. The year before, leaders from politics, business and science gathered in the Swiss Alps to discuss nothing less than “The Reshaping of the World”.
As a representative of more than 3,100 mainly small and medium-sized companies from the mechanical engineering industry, I was pleased to see that the Davos Summit, from 20 to 23 January, will deal with the challenge of “Mastering the Fourth Industrial Revolution”. Due to their leading technologies, companies from my home country, Germany, are at the centre of the worldwide revolution we call Industry 4.0.
In the not-too-distant future, the digitisation of industry will change the way our society works, produces and consumes. Therefore, it is appropriate that we discuss how to fully benefit from the opportunities new technologies offer for companies, and indeed for everyone, in a global context. In my view, Industry 4.0 is without doubt an issue where understatement would be out of place.
What is so revolutionary about connecting machines to the Internet? For industry, the answer is that digitised production processes will fundamentally change existing business models.
Today, it is common practice for many mass-produced goods to be manufactured in one place – often where wages are the lowest – and then shipped around the world to their customers. The shirt you are wearing right now was probably sewn in Asia, before it was sent all the way to the local store where you finally bought it.
Now imagine the textile industry using intelligent machines from the Industry 4.0 area to produce shirts completely automatically. The machine’s software knows not only how to stitch cloth together, but is also able to receive and understand unique details about the customer’s needs: the size, the preferred colours, the person’s initials on the collar.
In this example, the concept of mass production is seriously challenged. Clothing companies will no longer try to sell the same shirt as many times as possible. Now they can offer individual products for every client. Clothing brands won’t issue only two collections a year, summer and winter; they can change the look of their products every day.
We are not only talking about clothing. We have comparable potential in industries such as automotive, steel, chemicals or agriculture. That is the revolutionary aspect of Industry 4.0 for companies.
However, Industry 4.0 is not only about opportunities for the economy. It is also about opportunities for society.
To begin with, Industry 4.0 is a chance to keep production jobs in developed regions such as Europe, and the United States. If a shirt is manufactured by a smart machine in an automatised process, it can be produced anywhere at the same costs. Companies won’t start to employ Europeans to sew. But if we make Industry 4.0 a success at home, Europeans will be employed to create, maintain and modify the machines.
The digitisation of industry will also be good for the environment. With modern technologies, companies will be able to optimise their production processes in energy and resource consumption. They will be able to produce them right where clients need them, without the cost and effort of shipping. Industry 4.0 holds the promise of a clean and sustainable industry.
Finally, Industry 4.0 is an opportunity to adapt the economy to a growing world population because of its flexibility and efficiency. In Europe, where society is aging, digitisation can create jobs that are not physically demanding. In this way, Industry 4.0 improves the working environment in companies and offers opportunities for older employees to contribute to the work process. The precondition is that we begin to prepare the workforce in time for their new challenges, and teach workers IT and engineering skills.
So I expect this year’s summit in Davos to raise awareness of the opportunities of Industry 4.0 for everyone – not only in Europe, but worldwide. Developments in the mechanical engineering industry are already impressive. In Europe, we are working on a political framework for Industry 4.0 with an action plan by the European Commission on “Digitising Industry” due in April.
It is equally important for the broad success of the Fourth Industrial Revolution that people are not afraid of new technologies, but see the possibilities and think about how to make the most of them. If we do Industry 4.0 right, not just industry will benefit, but society as a whole.