Smart products will know what you need before you do.
Siemen’s electronics plant in Amberg, Germany, the poster child for Industry 4.0. Image: Siemens
It's 7 AM, April 13th, 2025. Your smart clock rouses you from a dreamless sleep and you climb from bed as your house comes to life. The bathroom light turns itself on and the shower begins to heat its water. After washing off, you throw on a T-shirt which has been perfectly fit for your body. You check your phone, only to discover that its battery is about to give out. A push notification informs you that there is no need to worry—a replacement is already on its way. You hear your car start in the garage, ready to take you down to the factory you manage, where, according to your phone, one of the machines has malfunctioned. Actually traveling to your place of work has become an increasingly rare phenomenon for you—most of the time the factory takes care of itself.
"What a pain in the ass," you mutter as your car pulls itself out from your garage. "Can't these things get anything right, anymore?"
Welcome to life after the fourth industrial revolution, where all of the objects you use on a day to day basis are custom-made and constantly talking to one another for your benefit.
The phrase "industrial revolution" probably conjures up foggy memories of sitting in high school history class bored out of your mind. Wasn't there something about a steam engine? Yes, there was—and in the two centuries since James Watt's vapor powered technology inaugurated the transition to mass production, there have been two more: in the late 1800s, based around electrification and division of labor, and in the late 1900s, with the rise of information technology.
Three years ago the Germans predicted a fourth, one which promises to dramatically transform the workplace and finally make the entire world of objects revolve around you.
Changing everything, again
The fourth industrial revolution, more commonly known as "Industry 4.0," derives its name from a 2011 initiative spearheaded by businessmen, politicians, and academics, who defined it as a means of increasing the competitiveness of Germany's manufacturing industries through the increasing integration of "cyber-physical systems," or CPS, into factory processes.
CPS is basically a catch-all term for talking about the integration of smart, internet-connected machines and human labor. Factory managers are not simply reimagining the assembly line, but actively creating a network of machines that not only can produce more with fewer errors, but can autonomously alter their production patterns in accordance with external inputs while still retaining a high degree of efficiency.
In other words, Industry 4.0 is the production-side equivalent of the consumer-oriented Internet of Things, in which everyday objects from cars to thermostats to toasters will be connected to the internet.
This would be a "completely new approach to production," according to a report released in 2013 by the Industrie 4.0 Working Group, a conglomerate of major industrialists, artificial intelligence experts, economists and academics.
The German government readily endorsed the idea, announcing that it would be adopting a "High Tech Strategy" to prepare the nation.
The approach has not only found massive support in Germany, but is increasingly demanding attention elsewhere in the world as well. The United States, for instance, was quick to follow Germany's lead and established a non-profit Industrial Internet consortium in 2014 which was led by industry giants such as General Electric, AT&T, IBM, and Intel.
Many factories squander large amounts of energy during breaks in production, such as weekends or holidays, something which could be avoided in the smart factory
Although Industry 4.0 has become a topic of heated debate in Germany, exactly what the term means continues to remain somewhat nebulous.
"Even though Industrie 4.0 is one of the most frequently discussed topics these days, I could not explain to my son what it really means," said an Audi production site manager quoted in a report released this year.
What does Industry 4.0 look like?
One of the more tangible aspects of the fourth industrial revolution is the idea of "service oriented design." This can range from customers using factory settings to produce their own products, to companies tailoring individual products for individual consumers.
The potentials enabled by this mode of production are enormous. For example, the communication between smart products on the Internet of Things and the smart machines manufacturing them on what GE calls the "Industrial Internet" means that objects will be able to monitor their own use and determine when they are going to give out.
If your phone knows that it is going to "die" in the near future, it can notify the factory, which can alter its production levels to reflect the data coming in from the smart objects produced there. When your phone kicks the bucket, there will already be another one waiting for you, meaning the days of back-ordering are numbered.
What's more, as this process becomes more sophisticated and integrated, your phone will arrive already programmed with your custom settings, just like how you had it when it gave out on you a few hours ago.
This process is not just limited to phones and other sophisticated electronics, however. Everything from custom-fit clothing to custom shampoos and soaps will be at the consumer's disposal, without the added cost that has typically accompanied individually tailored designs in the past. Objects will increasingly be made just for you and in a very real way—it will no longer be about selecting one out of a handful of predetermined colors for your phone and calling it personalized.
Automated machines for other companies, such as BMW and Bayer, are produced by machines which are themselves nearly entirely automated
Furthermore, the increasing integration of smart factories into industrial infrastructures could mean large reductions in energy waste. As the Industrie 4.0 working group noted in its report, many factories squander large amounts of energy during breaks in production, such as weekends or holidays, something which could be avoided in the smart factory.
According to proponents of this framework for totally integrated production, Industry 4.0 also has the potential to change the definition of human labor. Since machines are able to perform repetitive, routine tasks in manufacturing with much more efficiency than their human counterparts, these tasks will increasingly be automated. Yet rather than putting people out of work, this will supposedly free them up for more creative, skilled tasks, rather than subjecting them to menial, low-skilled work. Moreover, as physical systems become digitized, workers will have to spend less time in a designated physical work environment—rather, managing a factory can be done remotely over the internet.
The new industrial giants? Same as the old industrial giants
Those that stand to benefit most from the advent of the fourth industrial revolution, such as Cisco, Siemens, or ThyssenKrupp, claim that the implementation of CPS is due to popular demand rather than any corporate agenda.
Yet despite the rhetoric, further investigation shows that the main impetus behind the ramped up industrialization in Germany lies not so much with the consumer, but the potential benefits to multinational industrialists that will be its earliest adopters.
The fourth industrial revolution promises to place Germany on the cutting edge of industrial restructuring. As the working group notes in its report, the very existence of German manufacturing may depend on Industry 4.0. "If German industry is to survive and prosper, it will need to play an active role in shaping this fourth industrial revolution," reads the report.
German industry will be investing €40 billion in Industrial Internet infrastructure annually by 2020, according to a report by the consulting firm Strategy&. This represents a significant chunk of the total European investment in the fourth industrial revolution, which is expected to top €140 billion per annum. Due to the relative uncertainty of time frames and methodology in addition to the need for improved technologies, it remains unclear just how much Germany will benefit financially from the widespread adoption of the smart factory.
According to the Industrie 4.0 working group report, out of 278 German companies surveyed (largely in the machinery and manufacturing sectors), 131 claimed to be "already engaged with Industrie 4.0."
The vast majority of these companies' engagement involved "learning about" the fourth industrial revolution. Only about a fifth of these companies are actually implementing CPS components into their factories. Those actively participating in the new industrial revolution include Wittenstein (electric motors), Bosch (hydraulic equipment), and BASF SE, which pioneered fully customizable shampoos and soaps as part of a German Research Center for Artificial Intelligence experiment to demonstrate the feasibility of Industry 4.0.
Of particular note is Siemens AG, the largest engineering company in Europe, which has made particularly striking use of CPS components in its Amberg facility. There, automated machines for other companies, such as BMW and Bayer, are produced by machines which are themselves nearly entirely automated.
Obstacles and drawbacks
Meanwhile, there are other kinks on both the technical and social sides of the Industry 4.0 revolution.
Maximizing the perks of the fourth industrial revolution will require massive cooperation across corporate boundaries, especially when it comes to getting the machines to all speak the same language. If an unfinished product arrives at a machine that is incapable of reading its RFID chip because it was programmed at a different frequency, the manufacturing process would come to a halt. Thus, determining common platforms and languages to allow machines to speak across corporate boundaries stands as one of the foremost problems for the widespread adoption of cyber-physical systems.
On the other hand, too much homogeneity has also been seen as a danger. Google controls 97 percent of internet searches in Germany, for example, and some government leaders are concerned that a handful of influential companies will have an unnatural advantage in Industry 4.0.
"The big data necessary for Industrie 4.0 to work isn't being collected by German companies, but by four big firms in Silicon Valley," said German Economics Minister Sigmar Gabriel during a public debate with Google Chairman Eric Schmidt last year. "That's our worry."
Another significant problem is security: creating secure networks is a tough task and integrating physical systems with the internet makes them increasingly vulnerable to cyberattacks. In the days before the digital factory, ne'erdowells would have to destroy the physical components of factory systems (like the infamous Luddites). With the rise of Industry 4.0, production processes can be terrorized remotely, either by manipulating production protocol or simply paralyzing the production process. As the Fraunhofer Institute, a German systems research organization, has noted, there is already malware custom tailored to wreak havoc on cyber-physical production systems. As smart factories become increasingly common, figuring out ways to ensure cybersecurity while still retaining the benefits of CPS (such as real-time communication between machines) will quickly become a top priority for producers.
Where will the jobs go?
On the social side of things, futurist circles have long been discussing the increasingly redundant nature of human labor and the consequences of machines taking our jobs, a fear that plans for the fourth industrial revolution have only exacerbated. Their fears are far from unwarranted, with some projections estimating that within two decades 47 percent of US jobs will have become automated, displacing millions of workers around the globe.
However, the era of machines stealing our jobs was more characteristic of the third industrial revolution, which witnessed a massive rise in automated machinery. The fourth industrial revolution is the plan to make these machines talk to one another without human input. The Siemens factory still employs over 1,000 people, for example, who are mainly tasked with monitoring the machines on computers.
The main concern with jobs is that Industry 4.0 will allow companies to vastly expand their operations without necessarily needing to create new jobs for people, something that could very well prove to be a problem as demographics shift and the overall human population continues to grow.
Machines stealing our jobs was more characteristic of the third industrial revolution. The fourth industrial revolution will make these machines talk to one another without human input
This trend could wreak damage on developing nations. It is no surprise that one of the main impetuses behind the push for the fourth industrial revolution is the desire to compete with the outsourcing of production to developing countries (not so much in Germany as other Western nations, however). The wide-scale implementation of cyber-physical systems in Western manufacturing could reverse this tide of labor displacement, effectively pulling the mat out from under developing economies which are increasingly reliant on these manufacturing jobs. This is still a highly speculative proposition and little research has been done on the ancillary effects of implementing Industry 4.0 in the West.
Yet despite the promise of the increasing proliferation of consumables, labor liberated from the factory, and billions of dollars being funneled into the economy in the process of re-industrializing, at the end of the day, someone has to foot the cost of keeping these machines running. If human labor continues to be replaced by machines, it won't matter how many products are being produced because there will be no one who can afford to buy them. Perhaps the fourth industrial revolution will lead to the human workforce switching from boring, repetitive labor to more creative positions, as many of its more vehement promoters suggest. Or maybe we'll all end up peddling away for our wage, powering our smart factories on electric bikes a la Black Mirror's "Fifteen Million Merits."
One thing is for certain, however: Industry 4.0 is already upon us and all indicators suggest that we are going to dive headlong into the age of the smart environment, where all objects are in constant communication with one another, supposedly for our own benefit. It sounds like the future is going to be a little noisy with all this chatter, but don't worry—the machines speak in wireless whispers.
Top image: Siemen's electronics plant in Amberg, Germany, the poster child for Industry 4.0. Source: Siemens.
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