Navigating the Fourth Industrial Revolution (4IR) to the bottom line
4IR: from buzzword to reality
Companies are making progress in implementing new technologies, but scaling and linking investment to value remains a work in progress.
4IR has been met with both enthusiasm and fence-sitting. While sentiments and experiences have been mixed, most business leaders are now approaching 4IR with a sense of measured optimism. While they recognize the potential value and business boost advanced manufacturing technologies can present—particularly robotics, the industrial internet of things (IIoT), cloud computing, advanced analytics, 3D printing, virtual and augmented reality—they are still deliberating how and where to invest and balancing the hype with their own level of preparedness. Meanwhile, they’re also well aware of the significant changes 4IR will bring to a new manufacturing workforce—one that is increasingly becoming a hybrid of human and machine.
About the 4IR survey
PwC and The Manufacturing Institute (the workforce and thought leadership arm of the National Association of Manufacturers), surveyed approximately 100 US-based manufacturers. Looking at the results, we see a definitive—and, indeed, inevitable—shift to 4IR as companies seek to integrate new technologies into their operations, supply chain and product portfolio. However, these companies acknowledge that scaling, justifying 4IR investments and dealing with uncertainty surrounding use cases and applications present a new set of challenges.
Key 4IR survey findings
- While the sector as a whole is making assertive forays into 4IR, many manufacturers still inhabit the awareness and pilot phase. Nearly half of manufacturers surveyed reported that they are in the early stages of a smart factory transition (awareness, experimental and early adoption phases). The majority of those that have implemented smart factory use cases consider a quarter to be a success.
- Manufacturers expect the transition to accelerate in the coming years—73% are planning to increase their investment in smart factory technology over the next year.
- While we see a number of fence-sitters, the bulk of manufacturers are indeed prioritizing 4IR, the digital ecosystem and emerging technologies. When asked about adopting an IoT strategy in their operations, 31% of manufacturers report that it's “extremely critical” while 40% report that it’s “moderately critical.”
- About 70% of manufacturers say the biggest impacts of robotics on the workforce in the next five years will be an increased need for talent to manage the robotics workplace and the opening of new jobs to engineer robotics and their operating systems.
How PwC can help with 4IR
PwC's Smart Factory: using digital innovation to get closer to perfect.
For many industries, the window is still open for emerging 4IR leaders, and the very nature of 4IR rewards those who understand how to operate in this new digital environment. Some businesses will realize that embracing 4IR can help create efficiencies in operations, while others may see possibilities open through revenue-generating 4IR-related products and services. Additionally, an economic slowdown may lure some companies to cut costs in traditional ways that could prevent realizing the growth they need.
PwC can help companies navigating pressing questions surrounding 4IR. With data as the currency of this new era, do your customers and partners trust you to keep theirs safe and to use it responsibly? As demand for employees with the right skills spikes, how will you attract them, upskill existing employees and create new types of jobs more speedily? And, as with any new technology adoption, how sure are you that you’re making the right investments in time and capital—and that they’ll provide the payoff you hope for?
For a broad archive of PwC’s research and insights into 4IR, please visit our 4IReady microsite.
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