​Industry 4.0: Robotics Presents a Golden Opportunity

Competitive pressures are encouraging countries to invest in industrial automation, each in its own way.

By Soren Tranberg Hansen

May 11, 2016

Manufacturing companies are under pressure in many countries. Outsourcing to low-wage countries, consumer desire for customization, and disruptive technologies make it difficult to maintain a good business based on traditional production lines.

Individualized offerings are simply too expensive and complicated to produce. However, Industry 4.0 is a way to deal with these challenges.

Industry 4.0 moves from centralized to decentralized

Although the concept of Industry 4.0 has many definitions, it can be understood as a targeted approach to address production complexities and turn them into opportunities.

From a technical perspective, Industry 4.0 embeds the Internet for production purposes so that product parts and stocks can regulate themselves and one another through data sharing.

Industry 4.0 could allow manufacturers to produce unique customized products and small series of high-quality products at a competitive price—all with a quick delivery time.

Since the production processes do not exchange information centrally, production goes from being centralized to decentralized. This will transform traditional business models and cause conventional production to be turned upside down compared with how it has been understood for decades.

Manufacturing is the new black

In contrast to many other industrialized nations, Germany has maintained a stable manufacturing labor force. This is largely due to the integration of new technology into products and processes.

Since 2006, the German government has been pursuing its “High-Tech Strategy,” a plan to maintain Germany’s strong competitive position through technological innovation, including industrial automation and robotics.

In 2011, the term Industrie 4.0 was first used at the Hannover Fair to describe the effect of robotics on society after the steam power, mass production, and the information technology revolutions.

Industry 4.0 has a strong support from academia, industry, and the government. Research and development across sectors has been present in Germany since the beginning.

“Made in China 2025” is the Chinese version of the Industry 4.0 plan, published by the State Council last year. The idea is to use advanced computing technology, the Internet, and big data analytics to transform manufacturing.

China plans to focus on innovating in robotics, control systems, intelligent sensing components, and cloud platforms, as well as core aspects of industrial software.

The Chinese government expects advances in the utilization of industrial data, which would effectively support the transition of manufacturing intelligence to a collaborative and intelligent industry.

Danes value flexible production

In Denmark, manufacturing is characterized by small and midsized enterprises (SMEs). Production companies represent two-thirds of the total exports and are important source of revenue for the Danish society.

In February 2016, the Danish government launched a statement on growth and competitiveness in which Industry 4.0 is one out of three pillars. The report highlights the importance of more intelligent and flexible production based on increased automation, and more sophisticated robots.

European enterprises expect big data, robotics, and the industrial Internet of Things to enable them to produce more goods faster, more cheaply, and with fewer errors. Many Danish manufacturers already focus on flexibility and customization, and that is exactly what the concept of Industry 4.0 is aiming at.

Industry 4.0 speculation based on real robotics potential

Governments worldwide are focusing heavily on Industry 4.0 as a way to secure competitive production and a healthy manufacturing industry.

The potential is enormous—McKinsey & Co. recently estimated that in Denmark alone, there are 35 billion DKK ($5.38 billion) in revenue, 23 billion DKK ($3.53 billion) in exports, and 10,000 new jobs to pick up between now and 2025.

However, a successful transition to Industry 4.0 presupposes that companies and governments are well prepared and aware of the new technological opportunities.

About the author:

Søren Tranberg Hansen is a special advisor on robotics and AI for Invest in Denmark under the Ministry of Foreign Affairs. He has a master’s in computer science and IT from the IT University of Denmark and a Ph.D. in industrial robotics from Aalborg University and Georgia Institute of Technology.

Hansen has a background as a consultant at the Danish Technological Institute working with research, product development, and fundraising. He is also the author of a popular scientific book on robots.