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Fourth Industrial Revolution

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Robots in a grocery warehouse.
Augmented reality information about a painting.
Illustrated understanding of the Internet of things in a battlefield setting.
Amazon Go, a cashierless store.

"Fourth Industrial Revolution", "4IR", or "Industry 4.0"[1] is a neologism describing rapid technological advancement in the 21st century.[2] It follows the Third Industrial Revolution (the "Information Age"). The term was popularised in 2016 by Klaus Schwab, the World Economic Forum founder and executive chairman,[3][4][5][6][7] who asserts that these developments represent a significant shift in industrial capitalism.[8]

A part of this phase of industrial change is the joining of technologies like artificial intelligence, gene editing, to advanced robotics that blur the lines between the physical, digital, and biological worlds.[8][9]

Throughout this, fundamental shifts are taking place in how the global production and supply network operates through ongoing automation of traditional manufacturing and industrial practices, using modern smart technology, large-scale machine-to-machine communication (M2M), and the Internet of things (IoT). This integration results in increasing automation, improving communication and self-monitoring, and the use of smart machines that can analyse and diagnose issues without the need for human intervention.[10]

It also represents a social, political, and economic shift from the digital age of the late 1990s and early 2000s to an era of embedded connectivity distinguished by the ubiquity of technology in society (i.e. a metaverse) that changes the ways humans experience and know the world around them.[11] It posits that we have created and are entering an augmented social reality compared to just the natural senses and industrial ability of humans alone.[8] The Fourth Industrial Revolution is sometimes expected to mark the beginning of an imagination age, where creativity and imagination become the primary drivers of economic value.[12]

History

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History of technology
By technological eras
Premodern / Pre-industrial
Modern
Future
By historical regions
By type of technology
Technology timelines
Article indices

The phrase Fourth Industrial Revolution was first introduced by a team of scientists developing a high-tech strategy for the German government.[13] Klaus Schwab, executive chairman of the World Economic Forum (WEF), introduced the phrase to a wider audience in a 2015 article published by Foreign Affairs.[14] "Mastering the Fourth Industrial Revolution" was the 2016 theme of the World Economic Forum Annual Meeting, in Davos-Klosters, Switzerland.[15]

On 10 October 2016, the Forum announced the opening of its Centre for the Fourth Industrial Revolution in San Francisco.[16] This was also subject and title of Schwab's 2016 book.[17] Schwab includes in this fourth era technologies that combine hardware, software, and biology (cyber-physical systems),[18] and emphasises advances in communication and connectivity. Schwab expects this era to be marked by breakthroughs in emerging technologies in fields such as robotics, artificial intelligence, nanotechnology, quantum computing, biotechnology, the internet of things, the industrial internet of things, decentralised consensus, fifth-generation wireless technologies, 3D printing, and fully autonomous vehicles.[19]

In The Great Reset proposal by the WEF, The Fourth Industrial Revolution is included as a strategic intelligence in the solution to rebuild the economy sustainably following the COVID-19 pandemic.[20]

First Industrial Revolution

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Main article: Industrial Revolution

The First Industrial Revolution was marked by a transition from hand production methods to machines through the use of steam power and water power. The implementation of new technologies took a long time, so the period which this refers to was between 1760 and 1820, or 1840 in Europe and the United States. Its effects had consequences on textile manufacturing, which was first to adopt such changes, as well as iron industry, agriculture, and mining although it also had societal effects with an ever stronger middle class.[21]

Second Industrial Revolution

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Main article: Second Industrial Revolution

The Second Industrial Revolution, also known as the Technological Revolution, is the period between 1871 and 1914 that resulted from installations of extensive railroad and telegraph networks, which allowed for faster transfer of people and ideas, as well as electricity. Increasing electrification allowed for factories to develop the modern production line.[22]

Third Industrial Revolution

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Main article: Digital Revolution

The Third Industrial Revolution, also known as the Digital Revolution, began in the late 20th century. It is characterized by the shift to an economy centered on information technology, marked by the advent of personal computers, the Internet, and the widespread digitalization of communication and industrial processes.

A book titled The Third Industrial Revolution, by Jeremy Rifkin, was published in 2011,[23] which focused on the intersection of digital communications technology and renewable energy. It was made into a 2017 documentary by Vice Media.[24]

Characteristics

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In essence, the Fourth Industrial Revolution is the trend towards automation and data exchange in manufacturing technologies and processes which include cyber-physical systems (CPS), Internet of Things (IoT),[25] cloud computing,[26][27][28][29] cognitive computing, and artificial intelligence.[29][30]

Machines improve human efficiency in performing repetitive functions, and the combination of machine learning and computing power allows machines to carry out increasingly complex tasks.[31]

The Fourth Industrial Revolution has been defined as technological developments in cyber-physical systems such as high capacity connectivity; new human-machine interaction modes such as touch interfaces and virtual reality systems; and improvements in transferring digital instructions to the physical world including robotics and 3D printing (additive manufacturing); "big data" and cloud computing; improvements to and uptake of Off-Grid / Stand-Alone Renewable Energy Systems: solar, wind, wave, hydroelectric and the electric batteries (lithium-ion renewable energy storage systems (ESS) and EV).

It also emphasizes decentralized decisions – the ability of cyber physical systems to make decisions on their own and to perform their tasks as autonomously as possible. Only in the case of exceptions, interference, or conflicting goals, are tasks delegated to a higher level.[32][26]

Distinctiveness

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Proponents of the Fourth Industrial Revolution suggest it is a distinct revolution rather than simply a prolongation of the Third Industrial Revolution.[14] This is due to the following characteristics:

  • Velocity — exponential speed at which incumbent industries are affected and displaced[14]
  • Scope and systems impact – the large amount of sectors and firms that are affected[14]
  • Paradigm shift in technology policy – new policies designed for this new way of doing are present. An example is Singapore's formal recognition of Industry 4.0 in its innovation policies.

Critics of the concept dismiss Industry 4.0 as a marketing strategy. They suggest that although revolutionary changes are identifiable in distinct sectors, there is no systemic change so far. In addition, the pace of recognition of Industry 4.0 and policy transition varies across countries; the definition of Industry 4.0 is not harmonised. One of the most known figures is Jeremy Rifkin who "agree[s] that digitalization is the hallmark and defining technology in what has become known as the Third Industrial Revolution".[33] However, he argues that "that the evolution of digitalization has barely begun to run its course and that its new configuration in the form of the Internet of Things represents the next stage of its development".[33]

Components

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Self-driving car

The application of the Fourth Industrial Revolution operates through:[34]

Industry 4.0 networks a wide range of new technologies to create value. Using cyber-physical systems that monitor physical processes, a virtual copy of the physical world can be designed. Characteristics of cyber-physical systems include the ability to make decentralised decisions independently, reaching a high degree of autonomy.[34]

The value created in Industry 4.0, can be relied upon electronic identification, in which the smart manufacturing require set technologies to be incorporated in the manufacturing process to thus be classified as in the development path of Industry 4.0 and no longer digitisation.[35]

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Smart factory

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Main article: Smart manufacturing

The Fourth Industrial Revolution fosters "smart factories", which are production environment where facilities and logistics systems are organised with minimal human intervention.

The technical foundations on which smart factories are based are cyber-physical systems that communicate with each other using the Internet of Things and Services. An important part of this process is the exchange of data between the product and the production line. This enables a much more efficient connection of the Supply Chain and better organisation within any production environment.[citation needed]

Within modular structured smart factories, cyber-physical systems monitor physical processes, create a virtual copy of the physical world and make decentralised decisions.[36] Over the internet of things, cyber-physical systems communicate and cooperate with each other and with humans in synchronic time both internally and across organizational services offered and used by participants of the value chain.[26][37]

Artificial intelligence

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Artificial intelligence (AI) has a wide range of applications across all sectors of the economy. It gained prominence following advancements in deep learning during the 2010s, and its impact intensified in the 2020s with the rise of generative AI, a period often referred to as the "AI boom".[38] Models like GPT-4o can engage in verbal and textual discussions and analyze images.[39]

AI is a key driver of Industry 4.0, orchestrating technologies like robotics, automated vehicles, and real-time data analytics. By enabling machines to perform complex tasks, AI is redefining production processes and reducing changeover times.[40] AI could also significantly accelerate, or even automate software development.[41][42]

Some experts believe that AI alone could be as transformative as an industrial revolution.[43] Multiple companies such as OpenAI and Meta have expressed the goal of creating artificial general intelligence (AI that can do virtually any cognitive task a human can),[44][45] making large investments in data centers and GPUs to train more capable AI models.[46]

Robotics

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Humanoid robots have traditionally lacked usefulness. They had difficulty picking simple objects due to imprecise control and coordination, and they wouldn't understand their environment and how physics works. They were often explicitly programmed to do narrow tasks, failing when encountering new situations. Modern humanoid robots however are typically based on machine learning, in particular reinforcement learning. In 2024, humanoid robots are rapidly becoming more flexible, easier to train and versatile.[47]

Predictive maintenance

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Industry 4.0 facilitates predictive maintenance, due to the use of advanced technologies, including IoT sensors. Predictive maintenance, which can identify potential maintenance issues in real time, allows machine owners to perform cost-effective maintenance before the machinery fails or gets damaged. For example, a company in Los Angeles could understand if a piece of equipment in Singapore is running at an abnormal speed or temperature. They could then decide whether or not it needs to be repaired.[48]

3D printing

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Main article: 3D printing

The Fourth Industrial Revolution is said to have extensive dependency on 3D printing technology. Some advantages of 3D printing for industry are that 3D printing can print many geometric structures, as well as simplify the product design process. It is also relatively environmentally friendly. In low-volume production, it can also decrease lead times and total production costs. Moreover, it can increase flexibility, reduce warehousing costs and help the company towards the adoption of a mass customisation business strategy. In addition, 3D printing can be very useful for printing spare parts and installing it locally, therefore reducing supplier dependence and reducing the supply lead time.[49]

Smart sensors

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Sensors and instrumentation drive the central forces of innovation, not only for Industry 4.0 but also for other "smart" megatrends, such as smart production, smart mobility, smart homes, smart cities, and smart factories.[50]

Smart sensors are devices, which generate the data and allow further functionality from self-monitoring and self-configuration to condition monitoring of complex processes. With the capability of wireless communication, they reduce installation effort to a great extent and help realise a dense array of sensors.[51]

The importance of sensors, measurement science, and smart evaluation for Industry 4.0 has been recognised and acknowledged by various experts and has already led to the statement "Industry 4.0: nothing goes without sensor systems."[52]

However, there are a few issues, such as time synchronisation error, data loss, and dealing with large amounts of harvested data, which all limit the implementation of full-fledged systems. Moreover, additional limits on these functionalities represents the battery power. One example of the integration of smart sensors in the electronic devices, is the case of smart watches, where sensors receive the data from the movement of the user, process the data and as a result, provide the user with the information about how many steps they have walked in a day and also converts the data into calories burned.

Agriculture and food industries

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Hydroponic vertical farming

Smart sensors in these two fields are still in the testing stage.[53] These innovative connected sensors collect, interpret and communicate the information available in the plots (leaf area, vegetation index, chlorophyll, hygrometry, temperature, water potential, radiation). Based on this scientific data, the objective is to enable real-time monitoring via a smartphone with a range of advice that optimises plot management in terms of results, time and costs. On the farm, these sensors can be used to detect crop stages and recommend inputs and treatments at the right time. As well as controlling the level of irrigation.[54]

The food industry requires more and more security and transparency and full documentation is required. This new technology is used as a tracking system as well as the collection of human data and product data.[55]

Accelerated transition to the knowledge economy

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Main article: knowledge economy

Knowledge economy is an economic system in which production and services are largely based on knowledge-intensive activities that contribute to an accelerated pace of technical and scientific advance, as well as rapid obsolescence.[56][57] Industry 4.0 aids transitions into knowledge economy by increasing reliance on intellectual capabilities than on physical inputs or natural resources.

Challenges

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Challenges in implementation of Industry 4.0:[58][59]

Economic

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  • High economic cost
  • Business model adaptation
  • Unclear economic benefits/excessive investment[58][59]
  • Driving significant economic changes through automation and technological advancements, leading to both job displacement and the creation of new roles, necessitating widespread workforce reskilling and systemic adaptation.[60]

Social

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  • Privacy concerns
  • Surveillance and distrust
  • General reluctance to change by stakeholders
  • Threat of redundancy of the corporate IT department
  • Loss of many jobs to automatic processes and IT-controlled processes, especially for blue-collar workers[58][59][61]
  • Increased risk of gender inequalities in professions with job roles most susceptible to replacement with AI[62][63]

Political

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  • Lack of regulation, standards and forms of certifications
  • Unclear legal issues and data security[58][59]

Organizational

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  • IT security issues, which are greatly aggravated by the inherent need to open up previously closed production shops
  • Reliability and stability needed for critical machine-to-machine communication (M2M), including very short and stable latency times
  • Need to maintain the integrity of production processes
  • Need to avoid any IT snags, as those would cause expensive production outages
  • Need to protect industrial know-how (contained also in the control files for the industrial automation gear)
  • Lack of adequate skill-sets to expedite the transition towards Industry 4.0[64][65]
  • Low top management commitment
  • Insufficient qualification of employees[58][59]

Country applications

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Many countries have set up institutional mechanisms to foster the adoption of Industry 4.0 technologies. For example,

Australia

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Australia has a Digital Transformation Agency (est. 2015) and the Prime Minister's Industry 4.0 Taskforce (est. 2016), which promotes collaboration with industry groups in Germany and the USA.[66]

Germany

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The term "Industrie 4.0", shortened to I4.0 or simply I4, originated in 2011 from a project in the high-tech strategy of the German government and specifically relates to that project policy, rather than a wider notion of a Fourth Industrial Revolution of 4IR,[8] which promotes the computerisation of manufacturing.[67] The term "Industrie 4.0" was publicly introduced in the same year at the Hannover Fair.[68] Renowned German professor Wolfgang Wahlster is sometimes called the inventor of the "Industry 4.0" term.[69] In October 2012, the Working Group on Industry 4.0 presented a set of Industry 4.0 implementation recommendations to the German federal government. The workgroup members and partners are recognised as the founding fathers and driving force behind Industry 4.0. On 8 April 2013 at the Hannover Fair, the final report of the Working Group Industry 4.0 was presented. This working group was headed by Siegfried Dais, of Robert Bosch GmbH, and Henning Kagermann, of the German Academy of Science and Engineering.[70]

As Industry 4.0 principles have been applied by companies, they have sometimes been rebranded. For example, the aerospace parts manufacturer Meggitt PLC has branded its own Industry 4.0 research project M4.[71]

The discussion of how the shift to Industry 4.0, especially digitisation, will affect the labour market is being discussed in Germany under the topic of Work 4.0.[72]

The federal government in Germany through its ministries of the BMBF and BMWi, is a leader in the development of the I4.0 policy. Through the publishing of set objectives and goals for enterprises to achieve, the German federal government attempts to set the direction of the digital transformation. However, there is a gap between German enterprise's collaboration and knowledge of these set policies.[73] The biggest challenge which SMEs in Germany are currently facing regarding digital transformation of their manufacturing processes is ensuring that there is a concrete IT and application landscape to support further digital transformation efforts.[73]

The characteristics of the German government's Industry 4.0 strategy involve the strong customisation of products under the conditions of highly flexible (mass-) production.[74] The required automation technology is improved by the introduction of methods of self-optimization, self-configuration,[75] self-diagnosis, cognition and intelligent support of workers in their increasingly complex work.[76] The largest project in Industry 4.0 as of July 2013 is the German Federal Ministry of Education and Research (BMBF) leading-edge cluster "Intelligent Technical Systems Ostwestfalen-Lippe (its OWL)". Another major project is the BMBF project RES-COM,[77] as well as the Cluster of Excellence "Integrative Production Technology for High-Wage Countries".[78] In 2015, the European Commission started the international Horizon 2020 research project CREMA (cloud-based rapid elastic manufacturing) as a major initiative to foster the Industry 4.0 topic.[79]

Estonia

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In Estonia, the digital transformation dubbed as the 4th Industrial Revolution by Klaus Schwab and the World Economic Forum in 2015 started with the restoration of independence in 1991. Although a latecomer to the information revolution due to 50 years of Soviet occupation, Estonia leapfrogged to the digital era, while skipping the analogue connections almost completely. The early decisions made by Prime Minister Mart Laar on the course of the country's economic development led to the establishment of what is today known as e-Estonia, one of the worlds most digitally advanced nations.

According to the goals set in the Estonia's Digital Agenda 2030,[80] next leaps in the country's digital transformation will be switching to event based and proactive services, both in private and business environment, as well as developing a green, AI-powered and human-centric digital government.

Indonesia

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Another example is Making Indonesia 4.0, with a focus on improving industrial performance.[66]

India

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India, with its expanding economy and extensive manufacturing sector, has embraced the digital revolution, leading to significant advancements in manufacturing. The Indian program for Industry 4.0 centers around leveraging technology to produce globally competitive products at cost-effective rates while adopting the latest technological advancements of Industry 4.0.[81]

Japan

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Society 5.0 envisions a society that prioritizes the well-being of its citizens, striking a harmonious balance between economic progress and the effective addressing of societal challenges through a closely interconnected system of both the digital realm and the physical world. This concept was introduced in 2019 in the 5th Science and Technology Basic Plan for Japanese Government as a blueprint for a forthcoming societal framework.[82]

Malaysia

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Malaysia's national policy on Industry 4.0 is known as Industry4WRD. Launched in 2018, key initiatives in this policy include enhancing digital infrastructure, equipping the workforce with 4IR skills, and fostering innovation and technology adoption across industries.[83]

South Africa

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South Africa appointed a Presidential Commission on the Fourth Industrial Revolution in 2019, consisting of about 30 stakeholders with a background in academia, industry and government.[84][85] South Africa has also established an Inter ministerial Committee on Industry 4.0.

South Korea

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The Republic of Korea has had a Presidential Committee on the Fourth Industrial Revolution since 2017. The Republic of Korea's I-Korea strategy (2017) is focusing on new growth engines that include AI, drones and autonomous cars, in line with the government's innovation-driven economic policy.[84]

Uganda

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Uganda adopted its own National 4IR Strategy in October 2020 with emphasis on e-governance, urban management (smart cities), health care, education, agriculture and the digital economy; to support local businesses, the government was contemplating introducing a local start-ups bill in 2020 which would require all accounting officers to exhaust the local market prior to procuring digital solutions from abroad.[84]

United Kingdom

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In a policy paper published in 2019, the UK's Department for Business, Energy & Industrial Strategy, titled "Regulation for the Fourth Industrial Revolution", outlined the need to evolve current regulatory models to remain competitive in evolving technological and social settings.[9]

United States

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The Department of Homeland Security in 2019 published a paper called 'The Industrial Internet of things (IIOT): Opportunities, Risks, Mitigation'. The base pieces of critical infrastructure are increasingly digitised for greater connectivity and optimisation. Hence, its implementation, growth and maintenance must be carefully planned and safeguarded. The paper discusses not only applications of IIOT but also the associated risks. It has suggested some key areas where risk mitigation is possible. To increase coordination between the public, private, law enforcement, academia and other stakeholders the DHS formed the National Cybersecurity and Communications Integration Center (NCCIC).[86]

Industry applications

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The aerospace industry has sometimes been characterised as "too low volume for extensive automation". However, Industry 4.0 principles have been investigated by several aerospace companies, and technologies have been developed to improve productivity where the upfront cost of automation cannot be justified. One example of this is the aerospace parts manufacturer Meggitt PLC's M4 project.[71]

The increasing use of the industrial internet of things is referred to as Industry 4.0 at Bosch, and generally in Germany. Applications include machines that can predict failures and trigger maintenance processes autonomously or self-organised coordination that react to unexpected changes in production.[87] in 2017, Bosch launched the Connectory, a Chicago, Illinois based innovation incubator that specializes in IoT, including Industry 4.0.

Industry 4.0 inspired Innovation 4.0, a move toward digitisation for academia and research and development.[88] In 2017, the £81M Materials Innovation Factory (MIF) at the University of Liverpool opened as a center for computer aided materials science,[89] where robotic formulation,[90] data capture and modelling are being integrated into development practices.[88]

Criticism

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With the consistent development of automation of everyday tasks, some saw the benefit in the exact opposite of automation where self-made products are valued more than those that involved automation.[91] This valuation is named the IKEA effect, a term coined by Michael I. Norton of Harvard Business School, Daniel Mochon of Yale, and Dan Ariely of Duke. Another problem that is expected to accelerate with the growth of IR4 is the prevalence of mental disorders,[92] a known issue within high-tech operators.[93] Also, the IR4 has sparked significant criticism regarding AI bias and ethical issues, as algorithms used in decision-making processes often perpetuate existing social inequalities, disproportionately impacting marginalized groups while lacking transparency and accountability.[94]

Future

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Industry 5.0

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Industry 5.0 has been proposed as a strategy to create a paradigm shift for an industrial landscape in which the primary focus should no longer be on increasing efficiency but on promoting the well-being of society and sustainability of the economy and industrial production.[95][96][97]

See also

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References

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