Prior to 2020, Industry 4.0 was seen by most as an exciting subject with huge potential benefits – but not an immediate concern. Case in point: only 5% of manufacturers had an Industry 4.0 strategy in 2019.
That figure has since jumped, reaching 31% in 2020. Confronted with the largest health and economic crisis of the century, manufacturers were given a wake-up call on the importance of digitalisation in maintaining business resilience and continuity. COVID-19 has permanently reshaped the manufacturing landscape, and companies that hope to stay relevant need to start their transformation now, not later.
We sit down with Francisco Betti, INCIT Board Member and Head of the Platform for Shaping the Future of Advanced Manufacturing and Value Chains at the World Economic Forum (WEF), to find out what he believes the future of global manufacturing will look like, and how INCIT is helping to make that vision a reality.
Industry 4.0 has been spoken about for some time, but uptake seems less than ideal. Why?
Around 70–75% of manufacturing companies are still stuck in the pilot stage of trying new solutions and applications but not yet seeing the impact that Industry 4.0 can deliver. In most cases, it’s because the organisation lacks a clear vision or strategy for transformation. There’s a lot of noise around individual technologies and it’s important to move away from the hype – Industry 4.0 is not about stand-alone innovations. It’s about finding the best combination of technologies to overcome very specific operational or business challenges.
Then there is the issue of digital literacy. Manufacturers must upskill or reskill their people so they become confident and comfortable with the new technology. Companies also tend to find the upfront capex costs of transformation daunting. They need to realise that Industry 4.0 is a long-term game – you may not see rewards in the next quarter.
Today, manufacturers are experiencing the most pressure they’ve faced in recent history to be more productive while reducing costs. That’s exactly why they need to prioritise Industry 4.0 transformation now more than ever.
Urgent digitalisation is required to drive efficiency, build agility and achieve the resilience necessary to respond to the next pandemic-level disruption. However, manufacturers must first understand where they stand, benchmark themselves, and identify the right partners – from technology and solutions providers to universities, governments and international organisations. INCIT, the new independent, not-for-profit organisation that has been established to take the Smart Industry Readiness Index (SIRI) programme to the next level, is uniquely positioned to help with this.
How are other parts of the supply chain and ecosystem supporting Industry 4.0 transformation?
Having a fully connected value chain is vital to the success of Industry 4.0. It’s not just about digitising your own facilities – which is why many larger manufacturers have started to bring their suppliers on board the transformation journey too. This makes it possible to power not only productivity, efficiency and growth, but also to enable new business models.
Governments also stand to benefit from Industry 4.0’s ecosystem, both in terms of economic growth and job creation, and can play an active role to help accelerate the transition – whether by designing better policies, strengthening support mechanics, or providing incentives for digitalisation.
SIRI is a powerful tool for catalysing transformation. Having clear frameworks, tools and assessments backed by international benchmarks will help both manufacturers and governments get clearer insights into how digitally mature they are, how they stack up against the competition, and what opportunities are available for improvement.
SIRI is now becoming the international standard for Industry 4.0 transformation in manufacturing. What is fuelling its global adoption?
Four to five years ago we realised that most companies were still stuck with their transformation efforts. It became part of WEF’s mission to help the global manufacturing community gain a better understanding of challenges and opportunities, and incubate new collaborations and initiatives to help accelerate industry transformation.
The Singapore Economic Development Board (EDB) is a very active partner of WEF. We’ve worked closely with them for close to 40 years, and when they developed SIRI and rolled it out with such success in Singapore, we both thought it would be amazing to make the tool available globally. We worked closely for a full year to scale SIRI from national to global level.
As more and more companies came on board, the difference that SIRI made became obvious. It’s quite a unique tool because it can spot areas where both company-level interventions or ecosystem-level collaborations are most needed. It is not just extremely helpful for companies to adapt their plans, but also for governments to know how to support their local manufacturing community.
To further scale SIRI in the years ahead, we realised we needed a dedicated entity and team. That’s why INCIT was established. The INCIT team is already working with the global manufacturing community to accelerate the deployment of SIRI and develop new tools.
What do you think the manufacturing sector will look like in three to five years?
I expect the future of manufacturing to be much more sustainable and inclusive, and Industry 4.0 will be the main driver of this. The global manufacturing community will play a big role in the fight against climate change and the fight for social inclusion, and I believe that the digitisation process will allow manufacturers to deliver on these broader ESG goals. There have already been many use cases of Industry 4.0 being effective in reducing carbon emissions and water consumption, while increasing energy efficiency and workplace safety.
With SIRI, companies will be better informed of the next phase of their transformation strategy to ensure adherence to these goals and alignment with stakeholder expectations. If we’re successful with rolling out SIRI worldwide, we’ll be able to come together collectively as a global manufacturing community – not just companies but governments as well – to make the right investments that will further accelerate progress towards a more sustainable and equitable industry.