Industry 4.0: The fourth Industrial Revolution after automation

The pace of information and communication technology is not going to stop – a trend that is also reflected in manufacturing. Intelligent, networked manufacturing systems fundamentally change the way products are manufactured: Industry 4.0. It is actually the fourth time after the steam engine, mass production and automation of the Industrial Revolution.

Fraunhofer Cato for Labor Economics and from, Germany's Fraunhofer Institute for Labour Economics and organization, believes that 50 billion networked devices will work together in 2020. These networked devices can be digitally communicated in real time and can be digitally communicated with users in real time. Factory production processes will become visualized and controllable in virtual space, and ICT technology will dominate future business models.

Industry 4.0 will bring huge development opportunities: strong High-tech industries will be the new impetus for innovation, and Europe just needs this innovation to face global competition. There are no internet companies like Google or Facebook, or computers and handset makers like Apple and Samsung. Of course, there are no software companies like Microsoft or Oracle, or network operators such as At&t and China Mobile, where no European company can dominate in these areas. Only 8 of the world's top 100 High-tech companies are headquartered in Europe, and Microsoft's takeover of Nokia means the end of the business of the last handset maker on the continent.

But ICT is only one aspect of Industry 4.0, and the other is that it is applied to the industrial sector: taking advantage of Industry 4.0 and bringing that advantage into the industrial value chain.

Europe has the best preconditions because industry has always dominated the European economy: industry accounts for 15% of the EU's economy and 24% of the German economy. But in the American economic structure, industry accounts for only 12% of the population. Europe, with its industry-specific competitiveness and, to some extent, equally competitive in ICT, can attract emerging ICT companies and use its "traditional" manufacturing technology as a "back-up", combining both to become an innovation leader in the 4.0 era of industry.

This is an opportunity for Europe to do its best to do everything possible because the networking and digitization of industry and economy will break the balance of the world. The pattern we are now familiar with is derived from the third industrial revolution. As electronic products and computers enter the industry in their own way, and with the further development of automation, the advantages of labor will not be important.

Germany, for example, has benefited from international competition as an industrial powerhouse, which will cause Germany to lose a lot of jobs in some areas, but new industries will create job opportunities. The fourth industrial Revolution will be more profound than the previous three industrial revolutions, more affected industries and more complex revolutionary methods. The core of industry 4.0 is to combine the "hardware" creativity of large data, factory-specific software and manufacturing technology.

Today, every processing plant is constantly generating data. Efficient application of this data will provide a strong competitive advantage for the enterprise. For example, a diagnostic maintenance tool based on large data can accurately monitor the machine and make an early warning before the machine fails. This shortens the machine's failure repair time and enables the enterprise to make more accurate plans to reduce the unit price.

Let me give you a related example. If the process of processing data is intelligent, then the production process that consumes large power will be discovered and canceled. The above application can reduce the cost of enterprise by 80%. So, we can say that industry 4.0 created the blueprint for the entire networked production. In this blueprint, the machine manages itself through the value chain, which is intended to process machines and raw materials and delivers the product directly to the consumer.

If Europe wants a high starting point in the future market, it must lay the groundwork from now on, and start with three things: infrastructure, education, research and development, and funding and policy support for start-up technology companies.

First, Europe needs to consider infrastructure. Slow speed is a regional disadvantage in Europe, like a bumpy road or intermittent power supply.

Switzerland has 91% of its network is high-speed broadband, while the South Korean high-speed broadband penetration rate reached 94%. By contrast, Germany, France and Italy are using only 75%, 69% and 57% per cent of high-speed broadband. To develop Europe's infrastructure and modernize them, Europe will have to invest at least 1 trillion euros in building a network infrastructure.

In order to obtain this investment, there must be a strong and independent ideological environment, so as to facilitate private investment in infrastructure. Moreover, a functional market for pan-European internal infrastructure services (Pan-european domestic harsh) must also be created.

Today, the pan-European market is experiencing a serious break-up compared with the US market. For example, there are 55 telecom operators across Europe and only 5 in the United States! A single European market will enhance cohesion, reduce costs and significantly enhance the attractiveness of investors.

Second, education and research and development. Europe cannot compete with other regions for labour costs, especially in Asia. As a result, Europe needs to strengthen its investment in technology-intensive industries.

Europe has been spending 1.9% of its GDP on research and development – 1% less than the US investment in research and development, and 1.6% less than Japan's research and development. Europe must raise its research and development budgets, whether private or state-owned, while research and development investments are based on tax revenues.

At the same time, Europe also needs more mint majors (mathematics, Informatization, natural science and technology) graduates. In Europe, only 17% of college students choose Mint Majors. The ICT industry in South Korea, mainland China and Taiwan is more developed, so the big environment encourages these young people to choose Mint majors. In Europe, these advanced technologies are considered boring and even dangerous. Therefore, the stereotype of "advanced technology" must be changed.

More tech start-ups are needed in Europe. Let's take a survey of the most innovative companies: in the United States, 22% of the most creative companies were created after 1965, and 56% were before 1925. But only 2% of the most innovative companies in Europe were created after 1975, up from 86% per cent before 1925. Start-ups ' ability to finance must be improved, such as tax breaks for venture capital venture: In the US, about 20 billion dollars a year are invested in venture capital. In Europe, the figure is only 4 billion dollars.

So it's not hard to explain why Silicon Valley attracts entrepreneurs from so many innovators, and Europe is increasingly unable to attract them. Speaking of Silicon Valley, Europe needs more of this High-tech enterprise gathering place. In these areas, High-tech start-ups and experienced companies can collaborate, collaborate and build a value chain within Europe. We can learn a lot from the United States, and the stereotype of corporate and corporate founders must be improved. In Europe, the fear of failure is widely spread, which is why only a handful of Europeans choose to start a business. But entrepreneurship itself is the engine of innovation. Therefore, we must demonstrate our willingness to take risks, to stay away from the fear of failure, and to portray successful entrepreneurs as models of leadership.

These Trinity projects must have long-term goals, political, economic and technological industries, trade and investors must work together. In this way, through the innovation of Industry 4.0, Europe will create a better blueprint.

July 30, 2014: "UK" Khufu technology

Compiling: Center for international Economic and Technical cooperation, Ministry of Industry and Information technology Zhu

(Responsible editor: Mengyishan)