Hungary poised to take center stage in new Industrial Revolution
There is a looming sense of change in the European industry. We all know that our production capabilities will never match those of our East Asian trade partners, but we finally understand that this should not and will not be our main objective. The New Industrial Revolution is coming, and the European Commission is set on the European Union being the torchbearer of new developments. The EU manufacturing base is clearly destined for a marriage with the ICT sector, whereby digital innovation helps guide, maintain and further develop our precision, strength and co-operation.
In this article, I will present why such a change is inevitable, why Europe is uniquely placed to be early adapters of it, and why Hungary is poised to take a leading role in this new endeavor. I will first outline the main technological and economic processes leading to the New Industrial revolution, then talk about European efforts and the potential future of Hungary within this new digital Europe.
The first industrial revolution used the unique innovation of steam power to begin a process of mechanization, the second used electric power to mass produce, create the assembly line, and essentially, build the foundations of the our current economic and social system. The third industrial revolution began by the invention of the computer, by Hungarian Janos Neumann, and powers through with automation. The new industrial revolution will combine the digital innovation of the third, with the industrialization of the second and take it to a new level. Factory assembly lines will not only be automated, but connected by the Internet of Everything, creating a cyber physical system. The essence of this is the merging of IT (Information Technology), with OT (Operational Technology). Initiating the constant exchange and use of data within a cloud. This will create new opportunities to realize the true potential of cognitive computing and automation, helping to bring about a new, more effective, more co-operative and better integrated than ever value chain.
To visualize this new approach, we have to look at the four design principles of the Industry 4.0 concept; interoperability, information transparency, technical assistance and decentralized decisions. Interoperability creates a connection between all actors in production, from people to machines, devices and sensors, through the Internet of Everything. Information transparency is the process of recreating a virtual copy of the physical world through sensor data, creating a digital plant model. Technical assistance helps people by physical support through cyber physical systems, while aggregating and visualizing data for decision-making. Decentralized decisions are the autonomous capability of cyber physical systems to make decisions and perform tasks without human assistance. As we can see, these principles in action create a Smart Factory, where production effectiveness is unquestionably raised. The ability of companies to adapt to this new system is crucial to stay competitive in the age of cognitive computing.
These principles have not only been developed in Europe, they are perfect to finally unlock the true potential of our single market. What is truly unique about the European Union is the existence of a single economic bloc with the levels of diversity that we have. While it may have been hard to integrate the difference in knowledge, customs and ways of doing business, the superb economic infrastructure of our continent armed with the tools of the digital age provide the opportunity for co-operation that has the potential to reshape the European economy in the decades to come.
The prime example of Industry 4.0 being applied is “it’s owl” (Intelligent Technical Systems OstWestfalenLippe) a cluster of excellence of 180 businesses, universities, research institutes and organizations in the German federal state of North-Rhein-Westphalia. Its primary goal is to make the innovative leap from mechatronics to intelligent technical systems. “it’s owl” works on making Industry 4.0 a reality, and is a model for future EU developments in the field.
We thus have the means to build new European value chains that contain smart factories and redefine our industrial production, if we are ready to integrate a co-operative network of competence centers, SMEs and clusters of innovation. This is what the European Commission calls Digital Innovation Hub (DIH), a one-stop-shop for the digitization of industrial processes and implementing Industry 4.0 design principles. The current development of a pan-European network of DIHs is just what the common market needs to effectively utilize its diversity as its greatest strength, with knowledge transfers across Europe. The ICT Innovation for Manufacturing SMEs (I4MS) initiative, a Commission project, is aiming to help SMEs adopt and transfer cutting edge technologies. This created Digital Innovation Hubs and the possibility of a new and more connected European SME sector.
The position of the new joiner EU13 states in this regard is actually better than in any previous industrial or economic change. Due to size and economic possibilities, these countries have had to rely on innovation and ICT excellence, with a highly educated workforce, to get ahead. The current call for DIHs in these states will provide a welcome addition to the new European innovation ecosystem.
Hungary is poised to take a leading role in this new industrial and technological endeavor, not only because of our historical predisposition towards innovation, but current policy favoring a reindustrialization of Hungary to diversify our economic output. This has led to an increase in the number of factories built, the ratio of industry within Hungarian GDP and new incentives for production facilities to move to Hungary. These changes, coupled with the Hungarian capital, Budapest, serving as a booming start-up hub, as well as changes in education policy which have led to Universities being actively involved with industry and innovation create an especially favorable environment for DIH applicants from the country.
The future of the DIH project in Hungary is bright and its innovations are very much needed. Given the many successful clusters of innovation and excellence and industrial connections to educational and research institutes, the potential is clearly there, and honing it can lead to greater economic growth, better employment opportunities and more foreign investment. As Hungary finally got out of the effects of the great depression of 2008, the country is ready to take on a central role in the development of the new digitized European value chain. As a central actor in the Central and Eastern Europe region, it can be a driving force behind the implementation of Industry 4.0 design principles, as well as the engine of digital co-operation fueled growth within the region and the EU.
The Commission is looking for applications from private businesses, cluster organizations, universities and research institutes, as well as innovative public administrations. The application deadline is fast approaching on 22 October, and it is essential that many organizations apply for this truly unique and disruptive opportunity to be part of the vanguard of industrial, technological and economic change all around Europe. This opportunity should not be wasted.
You can find more information on the project here, and apply here.
