Industry 4.0: How disruptive technology can rescue British manufacturing

Alastair Sorbie
Newest Innovations In Consumer Technology On Display At 2014 International CES
Innovations like 3D printing have applications in sectors like construction (Source: Getty)

Industry 4.0 is revolutionising the way international manufacturers and construction companies approach business, but the UK has a long way to go if its industry is to keep pace with its European rivals.

This new world is based on digitisation, which blurs the line between the virtual and the physical. Connected products and “smart” machines are now able to “talk” to each other, and also to regulate themselves and their working environments.

Industrial jobs and processes are already being impacted by technologies like automation, artificial intelligence, the Internet of Things, big data and nanotechnology. While there is some scepticism about the replacement of human roles by these disruptive trends, their adoption will be essential to UK industry if it is to regain its competitiveness.

The UK manufacturing sector is facing its third recession in a decade, with factors such as the strength of the pound eroding its competitiveness overseas as reported in a recent CBI survey. Meanwhile, UK construction grew at its slowest rate in nine months in January as it continues to experience a widening skills shortage, and a slowdown in housebuilding and commercial property construction.

British industry also continues to fall behind its European counterparts. A recent PwC report found that German industry intends to invest 3.3 per cent of its turnover specifically in Industry 4.0 in the next five years, and expects 12.5 per cent revenue growth. Its manufacturing industry is four times larger than that of the UK, yet invests seven times more in automation. To keep pace, the UK needs to carefully consider its next tech move.

The manufacturing and construction sectors have benefited from automation technology and software developments in the past, be it through higher efficiency gains in the supply chain or safer and faster design of buildings, and some companies are already reaping the benefits of Industry 4.0. Vauxhall, the UK division of General Motors, has implemented 3D printing to increase production efficiency and minimise time to market, while a construction startup in the Netherlands has developed the technology to print foot bridges.

For manufacturing, employing such technologies will lead to autonomous production, and business systems with increased flexibility, better product customisation, localised manufacturing and shorter lead times. This translates into global competitiveness for the industry and easier access to more personalised products for the customer.

The construction sector, meanwhile, is seeing benefits in safety and efficiency from employing technologies ranging from building information modelling to automation. With the former, buildings become digital as much as physical assets. They are visualised, studied and scrutinised. Besides vastly improving accuracy and ease in the design process, this eliminates structural hazards and also helps designers choreograph safety plans for construction workers.

For both industries, the business software designed to support automation is enabling organisations to make better-informed and more effective decisions over other business activities including finance, the supply chain and planning. Real-time data and a wealth of amalgamated insight are the building blocks of these decisions, and organisations are becoming more versatile, not only with more analytical and sophisticated demand forecasting but also with software that can be tailored to respond to changing market conditions.

But in order to make this change a reality, UK industry will need to have employees with the right skills. This is particularly important for construction, as the sector continues to struggle to entice talented and innovation-savvy millennials with science, technology, engineering and mathematics backgrounds. It is also difficult to introduce new technologies such as automation to incumbent workers, who often view it as a threat to their position.

However, as new, digitally-motivated employees move into management roles, we expect to see a proportion of the construction workforce shift away from hard labour towards jobs in automated machine management and maintenance, data analysis and resource planning. In this way, while some positions at the coalface might be lost, most will merely be replaced by highly productive tech-based positions, driven by a combined knowledge of building and technology.

Similarly, manufacturing workers will require hybrid skills as their time is freed up by machines. They will focus on more creative and high-value tasks such as performance analysis, customer engagement, and strategic planning. This shake-up will put the sector on the radar of talented graduates and help address the “productivity puzzle’” alluded to in Barclays’ recent future-proofing manufacturing survey.

As Industry 4.0 penetrates UK manufacturing and construction, automation will change work, not kill it. The early adoption by more industrially-advanced rivals should act as a warning to UK industry – a more focused technical disruption will be crucial to reviving these sectors in the long term.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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