Letter IEDI n. 860–National Strategies for Industry 4.0
This Letter IEDI summarizes recent policy initiatives aimed at creating and disseminating new digital technologies and artificial intelligence in manufacturing in eight of the top ten industrial powers in the world. Six of these are developed economies (Germany, the United States, South Korea, Japan, France and the United Kingdom) and two are emerging economies (China and India). The work, available on the Institute's website, was prepared by IEDI consultant Maria Cristina Penido de Freitas, Ph.D. in economics at the University of Paris 13, and is part of a series of fifteen studies that supported the elaboration of the IEDI industrial strategy, to be announced shortly.
It is worth noting that each of the countries analyzed here has already been the subject of a detailed study, based on governments' official documents, academic articles, and studies by consultancies, trade union organizations and industry think tanks. They were published as Letters IEDI: n. 803 on Sep 1, 2017; n. 807, Sep 29, 2017; n. 820, Dec 11, 2017; n. 823, Dec 29, 2017; n. 827, Jan 26, 2018; n. 831, Feb 16, 2018; n. 841; March 29, 2018; n. 847, May 11, 2018 and n. 849 on May 25, 2018, among other works.
The world's major industrial powers move rapidly toward Industry 4.0, putting in place industrial policy programs to support the development of the underlying technologies and their diffusion into the national industrial structure. Thus, an international race toward the industry of the future was launched, with the potential to redefine leading positions in the sector.
If Brazil does not prioritize this issue and accelerate the formulation of a national plan, including connections among the different agents of its innovation system, its position in the global industrial ranking, which is already on the downward path, may retreat even further. In 2016, the country was in 9th place, that is, very close to being excluded from the group of the ten largest industrial powers.
Although the phenomenon of Industry 4.0 is still accompanied by a lot of uncertainty, there is great potential to revolutionize products, production methods, forms of organization and entire markets. Such effects, in addition, may go well beyond the boundaries of the industry and affect all economic activities. In this sense, manufacturing tends to increasingly represent the value chain of goods as a whole, incorporating services in the production process and in the post-production phase. For these reasons we talk about a Fourth Industrial Revolution.
The technologies underlying this process are many and they are at different stages of maturation. More than one or another technological development, however, the disruptive character that the Industry 4.0 brings is mainly the result of the articulation and convergence of these technologies, such as Cyber-Physical Systems (CPS), Internet of Things (IoT), Additive Manufacturing (3D printing), Big Data, Cloud Computing, Advanced Robotics, Artificial Intelligence (AI), virtual and augmented reality, new materials, etc.
Whatever the name that countries use to define this industry of the future —Industry 4.0, Advanced Manufacturing, Industry of the Future, Industrial Digitization, Intelligent Factory, Connected Factory, etc.— the phenomenon is increasingly at the center of their strategic agendas.
In the countries studied, the situation of manufacturing varies significantly and expectations for industry digitization are also different. In terms of the objectives sought by government initiatives, it is possible to roughly distinguish three groups.
In the first of them —Germany, South Korea and Japan— the policies adopted aim to maintain the national industrial enterprises' world leadership in high technology sectors in the face of an increasingly intense global competition. In the second group —the United States, France and the United Kingdom— the strategies implemented seek to reverse the deindustrialization process, raise the weight of industrial production and employment in the domestic economies and capture a significant share of value in the strategic articulations of globalized value chains.
In the third group —China and India— policies try to take advantage of the opportunities offered by the ongoing industrial revolution to make structural changes in the industry and reduce the gap with developed nations. There are, however, marked differences in the industrial strategies of these two emerging countries.
Reflecting national specificities in terms of the strengths and weaknesses of the industry and the scientific and technological research, policy priorities also vary across countries:
• In Germany, for example, the emphasis is on integrating digital technologies into industrial production machinery and "smart factories", with particular attention to integrated systems, cyber-physical systems and the internet of things.
• In Japan, the government has identified a strategic opportunity to lead the world with "robots in the Internet of Things era" by integrating advanced robotics and artificial intelligence.
• In South Korea, the priority is to establish an advanced industrial ecosystem by disseminating the use of intelligent factories and developing technologies related to IoT, 3-D printing and Big Data.
• In the United States, the industrial research strategy emphasizes information technology systems or emerging science-based technologies, and state-of-the-art materials (and engineering of innovative materials) for manufacturing.
• In France, the policy identifies as priorities: additive manufacturing (3-D printing); factory virtualization and connected objects; augmented reality.
• In the UK, policy priority areas are artificial intelligence and big data, clean growth, mobility, innovations geared to the needs of an aging society.
• In China, the main policy objectives are: modernizing the industrial park, achieving technological autonomy and developing a high value-added industrial equipment sector.
• In India, policy emphasis is on overcoming structural deficiencies that hinder the modernization of the industry and the attraction of foreign direct investment.