Just like innovations like steam power, electricity, assembly lines, and computers led to the industrial revolutions we have seen in the past, we are in the midst of what many are calling the Fourth Industrial Revolution, or what many are calling Industry 4.0.

The term was first coined by Professor Klaus Schwab, the founder and executive chairman of the World Economic Forum. He defined Industry 4.0 as a “current and developing environment in which disruptive technologies and trends such as the Internet of Things, robotics, virtual reality, and artificial intelligence are changing the way people live and work.”

Building on the advancements of the third Industrial Revolution (the introduction of partial automation and computers), Industry 4.0 creates further possibilities in computers and automation by allowing machines to connect and communicate to complete tasks without human involvement.

While this step may be significant for many different industries and businesses, it’s perhaps most impactful for manufacturing. By networking all systems and implementing automation, manufacturing companies of all sizes (small to large) can advance their factory environments with nearly fully autonomous smart systems.

What are the benefits of Industry 4.0?

By embracing Industry 4.0, manufacturers can change how people work. Smart factories and automation can enable workers to increase efficiency and productivity. Smarter networks and more digital systems mean information can be delivered when the worker needs it and automate as many of their decisions as possible. This helps businesses save costs and frees up employees to focus on more strategic and meaningful tasks versus repetitive ones.

On top of that, smart systems can help maximize safety and uptime for systems by predicting failures in systems or prompting maintenance requests before that failure occurs. This can help manufacturing save high costs and protect their workers from failures that may affect their safety.

On the flip side, critics of Industry 4.0 advancements argue that the advancements introduce new cybersecurity risks, potential negative impacts for lower-skilled workers, and ethical concerns around possible data misuse. While there are many benefits, it’s also worth considering these concerns.

Long-term impacts of Industry 4.0

For small and medium businesses, these benefits of Industry 4.0 can welcome new forms of innovation and level the playing field against larger, potentially legacy manufacturers. It also potentially opens the door to new entrepreneurs, who can quickly build up their capabilities or leverage new technology to improve capacity quickly.

While the long-term implications of the Industry 4.0 transition remain unclear, what’s evident is that there are many benefits as we enter this new world. From smallest to largest, companies of all sizes can benefit from exploring how they can incorporate these principles into their business practices and roadmaps.