THE BLOG

Industry 4.0 Is Coming...

19/01/2017 16:36 GMT | Updated 19/01/2017 16:36 GMT

The fourth industrial revolution is almost here, but is a world still largely shaped by the Victorian era ready for it?

In the last 150 years the UK has lived through three industrial revolutions. The first, and by far the most famous, between 1760 and 1840, was unprecedented in the way it influenced a way of life that remained largely unchanged since medieval times. The second industrial revolution involved the widespread introduction of steel to the UK, early electrification of factories and the introduction of mass production and the production line. The third (or digital) revolution took place towards the latter half of the twentieth century, and saw industry make the switch from mechanical and analogue electronic technology, to digital electronics.

The latter event marked the beginning of the information age in which we now live and so it's fitting that at the imminent onset of the fourth industrial revolution, it has been given a suitably futuristic sounding moniker - Industry 4.0.

The theory behind Industry 4.0 is that it will effectively create what has been called a 'smart factory', which utilises cutting edge technology, including cyber-physical systems, the Internet of things and cloud computing, in order to monitor the physical processes of a factory and make informed, decentralised decisions.

Within these new smart factories, cyber physical systems (controlled or monitored by computer-based algorithms integrated with the internet) create virtual copies of the physical world, in order to communicate with each other, and humans, via the Internet of Things - a relatively recent tech advancement in which everyday objects like fridges, cars and entire buildings have network connectivity, allowing them to send and receive data.

These connected, intelligent products utilise data and create new digital business models that bring computers and automation together in an entirely new way, with computer systems equipped with machine learning algorithms, allowing the system to 'learn' and operate with little input from humans.

For many it may sound like futuristic nonsense but despite the ambitious premise and abundance of technical soundbites, Industry 4.0 is far from science fiction. Most of these digital technologies have been ticking over for some time, but many are not yet ready for application at scale, and not without serious investment on the part of Britain's industrial players. Or indeed without significant government assistance.

To demonstrate the need for significant public sector backing to even begin to deliver on the 4.0 premise, take for example the two recent examples of the Nissan plant in Sunderland and the vast Tata steel complex in Port Talbot, both of whom turned to the UK government for a mixture of financial support and policy assurances when both of their operations ran into problems.

So it would be fair to say that our country's SMEs, not to mention our established large scale corporations, will make very little headway in joining the fourth industrial revolution without significant government support. Last year the German government pledged some €500 million to encourage research across academia, business and government into the concept of Industry 4.0. And in the US there exists the Smart Manufacturing Leadership Coalition (SMLC), a NFP organisation funded by $140 million of public-private investments, made up of tech firms, manufacturers, suppliers, government agencies, universities and scientists, all of whom have the common goal of advancing the Industry 4.0 concept.

So what about the UK? A recent report by accountancy and business advisory firm BDO in partnership with the Institution of Mechanical Engineers, found that there isn't enough understanding regarding Industry 4.0 by UK manufacturers.

According to the report only 8% of UK manufacturers have a significant understanding of Industry 4.0, despite 59% recognising that the fourth industrial revolution will have a big impact on their sector.

So clearly there is a fair amount of work to do here and it is likely something that will be high on the agenda of the newly appointed Committee on Economic and Industrial Strategy. But leaving public sector support aside British SMEs have their own work to do in ensuring that their businesses are investing in, and adopting, Industry 4.0 practices. My own firm, an SME manufacturer based in south Wales that makes large diameter plastic pipes for the construction industry, is already making inroads, with investment in early 4.0 framework totalling around £1.1million in the past year alone.

As technological advancement continues to move at unprecedented pace, there's no doubt that traditional industries will need to do all they can to avoid being confined to history. However on a positive note, last year acclaimed General Electric Chairman and CEO Jeff Immelt addressed the company's Minds + Machines conference, a celebration of the industrial Internet of Things, saying that while industry in general may not have seen much reward from the Internet era as yet, in the future they could become bigger users than tech companies or consumers. In fact, Immelt has predicted that in the next fifteen years digital industrial companies will add $15 trillion to global GDP. That's some figure and when the likes of GE are laying out billions in R&D to support their claims, industrialists the world over would be wise to sit up and take notice.

Simon Thomas is the Managing Director of Asset International, a leading manufacturer of Weholite large diameter plastic pipes. Asset International Ltd supplies bespoke designs to the water and construction industries, from surface drainage to foul sewers and inter-process pipework.