The new industrial revolution
18.02.2016
80% of the European innovations are industrial projects and they tend to represent about 75% of the entire export of the region. Considering the direct effects of this on the services level, we might be tempted to consider the industry as being the main economic resource of Europe.
Still, in the last 10 years, a lot of classical industrial activities have been transferred to other areas increasing actually the competition between developed and developing countries.
While Germany and Eastern Europe continue to invest in typical industrial sectors, other European countries decided to focus their efforts on different other sets of activities. Especially France and UK registered a decline in “traditional” production.
Is this going to be the new trend in Europe? Are those with heavy experience in industry moving on to research and development areas leaving Germany and Eastern Europe to take care of the production processes in the region?
Worldwide Industrial Trends
Things change. Whereas in the 90s the added value of the production processes was about 3.451 billion EUR and the industry was mainly concentrated in 6 countries: USA, Japan, Germany, Italy, UK and France, today we experience an increase of jobs in China (39%) and Brazil (23%) and a decrease in Germany (8%), France (20%) and UK (29%).
The first industrial switch was lead by BRIC (Brazil, Russia, India & China) immediately followed by Poland, Romania and Czech Republic. In our days the developing countries are generating 40% of the total industrial added value.
A second trend was distinguished in the West European countries. Some of them continued to retain a significant market share while decreasing the number of production related jobs. Germany, Italy and Switzerland still cover 20% of the global industry. Meanwhile other countries (France, Spain, UK) decreased in both value and number of jobs.
Furthermore, the East European countries (especially Poland, Romania and Czech Republic) massively absorbed part of the processes mainly because they were basically industrialized before the operational transfer from West to East began.
The big advantage of these countries consists in lower labor cost and high development potential. The newly automatic production facilities in the region will make easier the transition of more complex processes and activities to Eastern Europe.
The 4th industrial revolution
Even from the beginning of the 21st century the digital world has influenced all processes and business models. The E-Innovation has an immense impact on both social and economic aspects. People say that what we have already experienced up till now is just 10% of what is going to be in the end.
As Roland Berger says, the 4th industrial revolution is underway. There are already sectors highly influenced by it while others will catch up step by step and in a more relaxed rhythm.
What’s clear is that there is no way back. Shortly everything will be automatic and digitalized.
Cyber World
IT systems are already the core of the entire production processes. The new industrial vision envisages interconnectivity with all subsystems, processes, internal and external objectives, clients and suppliers.
Automation
Robots overtook many parts of the classical production processes. The amount of multifunctional equipment almost doubled since 2004. Soon the machineries will become even more intelligent, able to adapt themselves, to communicate and interact with the other elements related to the production processes.
Big Data
The new production facilities will generate an immense amount of data, which will need to be saved, processed and analyzed. In France, 63% of the managers active in industrial domains consider cyber security as being the new field responsible for the increase of competitiveness. Innovative methods related to big data would create new versions of preserving and usage of information.
New connectivity forms
The industrial future envisages that the digital world will be interconnected to the real one. This translates into physical objects being immersed into digital prints. The entire production based on integrated systems will be more and more spread around the world. Each equipment in part will know when a component is going to be ready within the production or distribution / supplying chain. The machineries will automatically adapt the series of processes and will independently outturn the final parts, while overtaking most activities that are now manually conducted.
Energetic efficiency and decentralization
The climate changes and the lack of traditional resources are important factors affecting the new industrial revolution.
The usage of renewable and nuclear resources has to be considered. Having that in mind, new self-sustaining industrial formats will be developed these creating new opportunities for those active in building the necessary infrastructure.
Virtual industrialization
The new industrial revolution will create virtual production facilities able to automatically produce physical goods. Each production process will be stimulated and verified in a digital manner. Only if the final solution will be completely accepted, its parametric and digital matrix will be entirely uploaded in the systems and the production process will be effectively and virtually controlled.
What kind of repercussions will the industrial revolution have on the actual production capacities?
The classic enterprises will continue to be present on the markets, but the main players in each field of activity will certainly modify entirely or in part their organizational schemes, their competences and their focus on functionalities. For sure, in such context, new comers will appear imposing amazingly new methods and business models. The technological innovations connected to the Internet and smartphones have not been successful by accident, but because they have covered a more complex social necessity. More or less the same thing will happen during the industrial revolution, which will bring extreme challenges for those actually acting on the market.
The rhythm of changes is depending on the nature of each industry in part.
How much should Europe invest for maintaining itself on the top of things?
Germany, Ireland, Austria, Sweden and Finland are countries with a high flexibility & innovation degree and with a high production capacity.
Netherland, Belgium, Denmark, UK and France are countries with a high degree of flexibility and innovation, but with a reduced capacity of production.
Czech Republic, Slovakia, Hungary, Slovenia, Lithuania, Italy, Estonia, Poland, Romania, Croatia, Bulgaria are to be considered the traditionalist partners, while Spain and Portugal are to be seen as hesitant.
