We hear more and more about the coming Fourth Industrial Revolution, but it’s often unclear exactly what it will actually entail. AMTIL’s Richard Penman offers a primer on Industry 4.0, its history, and what it all means.

Since the late 1700s, industry and the activities integral to industry have undergone significant changes, driven broadly by the desire to increase efficiency and output value, while reducing capital invested and effort required per output. This desire has seen numerous transitions towards more innovative processes and technologies, taking place over many years.

For expediency, we group these transitions into stages, or revolutions. The first industrial revolution (Industry 1.0) saw the introduction of mechanisation, replacing man (or animal) power with machinery driven by water or steam. The second revolution (Industry 2.0) leveraged the division of labour, along with the benefits of electricity, to facilitate mass production (assembly lines). Industry 3.0 harnessed electronics and technology to automate production.

The key drivers and advances pertinent to each revolution were crucial for disrupting the market status quo of the day. It is important to acknowledge that each revolution was driven by the preceding one, with key advances driving each revolution forward, as well as creating outputs and technologies that enabled each successive revolution.

In terms of key drivers, Industry 1.0 could be referred to as the ‘water revolution’, and Industry 2.0  as the ‘electrical revolution’. The third revolution, which saw the transition from mechanical technology and analogue electronics to digital electronics, is referred to as the ‘digital revolution’. Industry 3.0 established the connection of all sorts of devices, often in networks, to allow streams of information and operational or manufacturing data.

Over time, businesses have connected their operations in a bit-by-bit approach, with the majority connecting production and inventory operations to management software such as enterprise resource planning (ERP) systems. Our connectedness has grown exponentially, to a point where both businesses and consumers are connecting devices at a phenomenal rate.

Industry 4.0, the revolution now transpiring, is widely referred to as the ‘cyber-physical revolution’: a fusion of technologies blurring the lines between the physical, digital, and biological spheres. The term ‘Industrie 4.0’ was initially adopted by a coalition of universities, companies, labour unions and government bodies in Germany, under an initiative that represents that country’s vision for the future of manufacturing, both in Germany and around the world.

As with all preceding revolutions, Industry 4.0 is also generating key outputs and advances. Two terms in particular have entered into popular vernacular: ‘big data’ and the ‘Internet of Things’. The scenarios surrounding them should be briefly examined.

The exponential growth in the connection of so many machines, machine types, devices and operations generates massive amounts of data that can be so large or complex that traditional data-processing applications are inadequate to deal with them. These huge data sets are referred to as ‘big data’ and they will expand dramatically as the physical, digital and biological connections multiply.

At the same time, we are seeing a convergence of multiple technologies that have amalgamated to provide real-time analytics and machine learning, utilising wireless networks sensors, embedded systems and more. These ubiquitous smart devices have replaced traditional technology structures and given rise to the term the ‘Internet of Things’ (IoT). The IoT is a concept focused on connecting any device to a network and/or to other devices. This encompasses mobile phones, cars, washing machines, ovens, lamps, wearable devices and almost everything else. To distinguish the application of the IoT for industry, the term Industrial Internet of Things (IIoT) is often used.

Industry 4.0, then, is based upon the intelligent connectivity of smart devices, where objects can sense one another, communicate, analyse, generate information and predict eventualities. Where it differs from the digital revolution is the amount and use of the information generated. Generally, in Industry 3.0 we connected devices and received information that we analysed, evaluated and acted upon fairly manually. In Industry 4.0, we are connecting almost everything together, generating huge amounts of information, then having that information analysed and acted upon automatically, as required in real time, without the need for manual intervention.

We can consider big data and IIoT as the key drivers of Industry 4.0, with their outputs having almost endless uses across every element of society, all industries and environments. These informational outputs are quickly becoming indispensable in real-time predictive or other analytic operations. Industry 4.0 could easily be referred to as the ‘information’ or ‘data’ revolution. However, this term seems less than adequate to capture the incredible scope of change occurring.

At the risk of introducing yet another term, I would describe the current revolution as the age of perspective computing, the crux of the matter being that this revolution, its drivers and outputs, have many explanations, definitions and champions. This, in and of itself, tends to make one think that the actual generation and utilisation of information is, in reality, always a perspective-based activity.

Moreover, the targeted connection, extraction, analysis and manipulation of data to achieve a desired outcome are intrinsically perspective-based. It could be argued that it has ever been thus – no matter the amount or type of data generated, a business or consumer will only ever retrieve, manipulate and analyse data based on their specific needs and operations. Marketing works on this very premise when you search for a product online and then receive copious amounts of information and sales offers for similar products.

Given that each revolution could be considered to be driven by the preceding one, the question is: where is this all going, and what is the likely next step? If we contemplate all the advances so far, then unify them and consider a feasible next step, it may be that there is only one possible outcome: the cyber-automation of digitally-driven entities that act and collaborate autonomously based upon huge sets of predictive data and perspective information. For some, this is going to sound a lot like artificial intelligence (AI), and realistically it is coming close, though we need, of course, to consider the nature of the mind, perception and ethics as part of true AI.

Richard Penman is a national IT Systems Innovation Facilitator with the Federal Government’s Entrepreneurs’ Programme (EP). AMTIL is a partner organisation working with the Department of Industry in the delivery of the EP.