Never Fear: Why Concerns about Industry 4.0 are Misplaced

Industry 4.0 and the Internet of Things (IoT) promise a previously unimaginable degree of connectivity. Yet while optimists envision a rosy future, others aren’t so sure: 

• Always connected, anywhere, anytime: Is this really progress? What about rest, privacy, and talking face-to-face?
• Won’t more connections just increase our vulnerability to bugs, worms, and malware? 
• Artificial intelligence: Great, but will clever computers take our jobs – or maybe turn against us? 

I understand these concerns. But none of them provides a strong enough reason to put the technological genie back in the bottle. 

As technology improves, we’ll be able to manage its risks more effectively than ever before. While no system is perfectly secure, the defining characteristic of Industry 4.0 is intelligence; and the intelligent systems of Industry 4.0 and the IoT will anticipate threats and manage problems as they arise, providing a secure network whose benefits vastly outweigh any risks. 

That network will encompass logistics; power grids; smart products, buildings, and factories; and other connected systems. One top of this foundation are applications and data analytics: programs that take information from connected objects and use it to create knowledge that improves people’s lives. 

For example, say that in the past, you had a product, such as a tractor. A farmer used it to till the soil, plant seeds, and bale hay. It does its job well enough; but add some electronic circuitry and you get a smart tractor, one that provides readings of its own performance, making maintenance easier and prolonging the machine’s useful life. Throw in a few sensors, and you have a smart, connected tractor, one that links to the Internet and communicates with remote devices, such as the farmer’s smartphone. 

At that point, you’re looking at a full-blown system of farm equipment, where tractors, tillers, and combine harvesters are all digitally linked and remain in a state of constant communication. Industry 4.0 takes it one step further by creating a system of systems, one that takes the information gathered by the farm equipment and integrates it with additional data about weather forecasts, soil conditions, irrigation schedules, and overall farm performance. 

Knowledge is power, and the humble farmer has suddenly been made powerful by technology that collects and analyzes data from the various systems of which his farming business is composed. This improves his productivity, increases his income, and raises his standard of living. 

Multiply those benefits by several orders of magnitude and you’ll begin to appreciate the positive ripple effects of the Fourth Industrial Revolution. 

A new approach to production

Beyond the benefits afforded by interconnected systems, Industry 4.0 will usher in a fundamentally new approach to the production of goods. Historically, technologies that produced physical goods and those that conveyed information remained essentially separate. Now, they are merging to form a single, integrated system encompassing the physical and digital worlds. The results are going to be dramatic. 

For example, have you ever watched a craftsman making knives or pottery or saddles? Many such artisans work to the specifications of their clients, turning out hand-crafted products on a small scale for the limited number of customers willing and able to pay for items tailored to their exact requirements. 

Industry 4.0 will take the small-scale, customized output of the artisan’s workshop and combine it with modern assembly line technology. The result: mass personalization, or large-scale production of customized products and services. 

For example, Harley-Davidson offers motorcycles made to the specifications of its customers, who can choose the engine, tailpipes, transmission, paint color, and other elements. This is great for buyers, but it was slowing down production for Harley, which needed 21 days to produce a single customized bike. 

Using a cloud platform, Harley’s factory shrank its production time to just six hours, keeping customers happy while lifting the plant’s productivity by 25%. 

The benefits of this type of manufacturing are clear: consumers get highly personalized goods at affordable prices, while industry gets ultra-flexible mass production that can adapt rapidly to changing market conditions. That’s Industry 4.0: The world’s old-fashioned workshop, transformed. 

The shape of things to come

So, will the value of Industry 4.0 and the IoT arrive all at once, in a kind of technological Cambrian explosion? Probably not. More likely, the value will unfold in stages. Over time, we will develop sensors that monitor a product’s condition, software that personalizes its attributes, and algorithms that optimize its performance. Eventually all of these elements will be combined, to produce systems that are basically autonomous and require little human input. (To be clear, that doesn’t mean that people will be eliminated from the production process; only that they will need to develop new skills to manage it.) 

Despite some apprehension about its potentially disruptive effects, the fundamental results of Industry 4.0 and the IoT will be positive. Living standards will rise, economies will grow, new industries and business models will emerge. All of those developments will improve the quality of people’s lives. 

Technology still has a way to go before we reach the conditions necessary to realize these benefits, but this is just a matter of time. Before long, the farmer on his tractor, the craftsman in his workshop, and the smart factories of the future will be connected in way that was never possible before. The benefits to consumers and businesses will be substantial.