Industry 4.0

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What are Industry 4.0, the Fourth Industrial Revolution, and 4IR?

Industry 4.0—also called the Fourth Industrial Revolution or 4IR—is the next phase in the digitization of the manufacturing sector, driven by disruptive trends including the rise of data and connectivity, analytics, human-machine interaction, and improvements in robotics.

What is the Fourth Industrial Revolution?

Steam propelled the original Industrial Revolution; electricity powered the second; preliminary automation and machinery engineered the third; and cyberphysical systems—or intelligent computers—are shaping the Fourth Industrial Revolution.

4IR builds on the inventions of the Third Industrial Revolution—or digital revolution—which unfolded from the 1950s and to the early 2000s and brought us computers, other kinds of electronics, the Internet, and much more. Industry 4.0 brings these inventions beyond the previous realm of possibility with four foundational types of disruptive technologies (examples below) that can be applied all along the value chain:

  • connectivity, data, and computational power: cloud technology, the Internet, blockchain, sensors
  • analytics and intelligence: advanced analytics, machine learning, artificial intelligence
  • human–machine interaction: virtual reality (VR) and augmented reality (AR), robotics and automation, autonomous guided vehicles
  • advanced engineering: additive manufacturing (such as, 3-D printing), renewable energy, nanoparticles

Technology, however, is only half of the Industry 4.0 equation. To thrive in the Fourth Industrial Revolution, companies must ensure that their workers are properly equipped through upskilling and reskilling and then hire new people when necessary. Upskilling means that employees learn new skills to help them in their current positions as the skills they need evolve. Reskilling is the real challenge: workers are retrained with new skills that will enable them to fill different positions within their companies.

This is increasingly vital as disruptive technologies transform job requirements, but the outlook on reskilling differs geographically. In Europe, 94 percent of surveyed executives believe that the balance between hiring and reskilling should be equal or tip toward reskilling, compared with only 62 percent of US respondents.