If you haven’t heard of the Fourth Industrial Revolution (or Industry 4.0), you’re missing out on something likely to have a seminal impact on the global economy.
This essentially refers to the ongoing automation and digitization of traditional manufacturing and industrial processes to reduce costs, improve efficiency, and optimize productivity across the board.
In this post, we’ll explore the concept of Industry 4.0 in further detail, while asking how it’s likely to benefit nations in Asia.
How is Industry 4.0 Being Implemented in Asia?
While there’s a tendency amongst some in the UK to consider Industry 4.0 as being something of a buzzword (particularly as we don’t retain much of the manufacturing industry on these shores), it has genuine and corporeal benefits in regions such as Southeast Asia.
In fact, it’s capable of completely reinvigorating SEA’s manufacturing industry, potentially delivering productivity gains worth anywhere between $216 billion and $627 billion.
In terms of implementation, adopters are working around a broad concept involving devices, network and applications (or DNA for short). This represents the basic building block of Industry 4.0, as existing devices and machines will need to be connected through a viable network to empower specific applications.
Applications work to interpret the data transmitted from a connected device while introducing artificial intelligence and automation to improve and alter processes.
In practical terms, Asian factories worldwide are upgrading their equipment and connecting this to a network using standards such as OPC. Modern machinery will typically feature many sensors currently gathering data across various categories, including the production process, the number of interruptions, and the final number of viable products made.
It’s this raw data that informs the end-stage applications and leads to increases in productivity, with this type of innovation being rolled out throughout the SEA region.
Ushering in the Age of Full Automation
For Industry 4.0 to fully realize its potential in Asia; however, execution is absolutely imperative. This is particularly true when you consider that the latest innovations will usher in the age of full automation by building on the foundations laid during Industry 3.0.
Given the impact of full automation on the existing labor market, there’s bound to be opposition to the widespread implementation of Industry 4.0 in SEA.
Remember, people were revolting against the mere concepts of automation and digitisation at the onset of Industry 3.0, and adopters will need to take on-board these concerns when leading the latest revolutionary charge.
Despite these challenges, the rise of Industry 4.0 is inevitable, while the fields of automation and robotics continue to entice investors from across the globe.
Interestingly, ETFs in these markets have continued to outperform the broader market in recent times, in some instances delivering returns that nearly two-time larger than more general indexes.