What it means and how it will impact your business — and the people in it — in the years ahead.
You may not realize it, but for the past several years you’ve been immersed in the fourth industrial revolution, also known as Industry 4.0. Like the three revolutions preceding it — mechanization, then shifting to new forms of energy, followed by the widespread use of computers and automation — Industry 4.0 has significantly changed the way many manufacturers and logistics companies do business.
Advancements such as artificial intelligence, machine learning, wide-scale automation and 5G internet connectivity have improved the way factories and warehouses operate. These technologies have made digital interconnectivity — the way computerized machinery and systems work together — an invaluable tool for companies looking to increase productivity and efficiency while ensuring fewer mistakes and relying on smaller workforces.
But Industry 4.0 is just getting started. According to research from internet technology service management company Stefanini Group based in São Paulo, Brazil, 90% of manufacturers in the United States see the adoption of digital tools as a priority, but only one in four see new revenue streams from those advancements. That’s because the widespread use of these innovations hasn’t reached full capacity: Many of these tools must be implemented in phases. And the benefits promised by digital advancements of Industry 4.0 — things such as autonomous and semi-autonomous manufacturing processes, hyper-automation, advanced robotics and self-optimizing systems — aren’t possible until the later stages of implementation.
While the tech-focused revolution of Industry 4.0 is still occurring, the next frontier in manufacturing is on the horizon.
Building on the progress made by Industry 4.0, Industry 5.0 brings a more human-centric approach, valuing the skill and input of workers and looking beyond the simple measure of efficient production. It also focuses on a company’s impact beyond its production and profitability — how it affects people both inside and outside its operation, as well as its bearing on the environment.
The movement has roots in the effects of the Covid-19 pandemic, which accelerated the adoption of digital tools such as online shopping and video calls while also reinforcing the need for human contact and physical connectedness. Other societal shifts, such as an increased concern about environmental issues and the rise of social justice movements, also contribute to the Industry 5.0 ethos.
As companies continue to implement the new technologies that characterize Industry 4.0, they’re laying the groundwork for the eventual transformation to Industry 5.0. The ability to incorporate concepts from both movements will allow manufacturers to maximize the benefits of each revolution.
Industry 5.0 brings a more people-focused approach to business, but what exactly does that mean? The European Union describes Industry 5.0 as a movement that “provides a vision of industry that aims beyond efficiency and productivity as the sole goals and reinforces the role and the contribution of industry to society.” This new way of approaching industry places the well-being of the worker at the center of the production process and considers how a business impacts society and the environment.
Part of that human-centric approach involves making workers feel more comfortable with technologies introduced during Industry 4.0. Manish Kumar, who co-founded the Industry 4.0/5.0 Institute at the University of Cincinnati in Cincinnati, Ohio, says building trust in technological advancements is key. As an example, he points to computer vision technology, in which cameras read information on a piece of machinery and transmit that data to a central monitoring system. Some workers may be concerned that managers will use those cameras to observe them, as well as the machinery.
“We have a lot of these new technologies, which have a lot of potential, but they are not adopted by humans as much because they do not have trust in the system,” he says. “They feel it’s an invasion of privacy. So, could we do it in a different way that these technological developments could infuse trust in the people?”
Kumar says an Industry 5.0 approach would involve establishing guidelines for technologies such as cameras, reassuring workers that this new tool is there only to help them and not to invade their privacy. He also says that as new technologies are developed, rather than simply being a solution to a problem, managers must build trust in these tools to ensure they’re adopted sooner.
“When we were developing these technologies, we didn’t have that in mind,” he says. “We just saw that these new technologies have that kind of capability and can solve these types of problems but did not envision that humans will be the users. Humans need to adopt it first, and that’s when the full potential of these technologies will be realized.”
Industry 5.0’s human-centric approach also addresses workplace diversity and accessibility, as well as safety. The adoption of new technologies shouldn’t exclude or endanger any worker, and companies must prioritize equitable hiring and operating practices to maintain a strong, productive workforce.
Another important component of Industry 5.0 is sustainability. While that term evokes environmental protection, Industry 5.0 takes a broader approach, seeing it as not only protecting the Earth and everything living on it, but also building a business model that can sustain growth going forward.
Reducing waste is a major aspect of achieving this multi-dimensional definition of sustainability. Michael Rada, a manufacturing veteran and Industry 5.0 expert living in Plzeň, Czechia, says there are five types of waste companies must address: physical, social, urban, process and time.
Physical waste includes everything from paper and packaging trash to excess materials produced during manufacturing — essentially anything that goes into a garbage can or landfill. Social waste refers to people who can’t live meaningful lives, whether due to low wages, poor working conditions, discrimination or intolerance. Urban waste means empty factories and other unused buildings, while process waste refers to inefficiencies in production models. Of course, time waste is self-explanatory — and one of the most insidious forms of misuse.
Rada says addressing the various aspects of waste in your business can reduce costs, improve profits and create a positive impact on workers, your community and the world. One of the first steps to doing that is overcoming what Rada calls “professional blindness.”
“You do your work properly, but you don’t see the alternatives,” he says. “And to break this, you need someone from outside to push you out of your box or you need to retrain your brain.”
As an example, Rada cited a factory that invited its employees to bring their children in for a tour. As the kids walked through the facility, they were encouraged to ask questions, some of which sparked ideas among the factory’s workers and managers for new approaches to business practices.
Working together also can help companies reduce waste. Rada says when businesses work in silos — within their own
organization or with their suppliers or other partners — they unnecessarily impede processes from being carried out efficiently.
“Let’s say the bed frame producer does not cooperate with the mattress producer. He just knows that the size should be this one, but they don’t cooperate,” Rada says. “If you would like to improve, you shouldn’t play only in your sandbox.”
Kumar says sustainability also needs to address the feasibility of growth and technology use, as well as the potential impact on people and the environment. Adopting new technology without solid reasoning behind it or ample training for workers can end up causing more harm than good in the long term.
“We need to look at our available resources and the societal aspects of growth,” he says. “Sustainability just comes from many things, like environmental sustainability, or asking ourselves as a society, ‘Can we produce at this rate? Can we train people at the rate needed, so that we have enough skilled people working for industry?’ Sustainability is looking into the future and addressing the things needed to be done right now to sustain growth.”
Closely connected to sustainability, resilience is another major component of Industry 5.0. As companies grow and incorporate more of the technological tools available through Industry 4.0, they must also make certain those technologies and processes are disruption-proof.
“As we expand and as we make more of these advanced technologies, it becomes more complicated, more complex, which presents the possibility of things failing,” Kumar says.
Kumar uses the widespread supply chain failures during the onset of the pandemic as an example of what can happen when resiliency isn’t a priority. Preparing for worst-case scenarios and having backup plans that can be easily implemented in the event of a disruption are important to the long-term success of a manufacturing operation.
“We have seen the fragility of such things and how that leads to major disruption,” he says. “So, resilience of these technologies individually, as well as when they are combined to be used in more complex systems, is critical.”
That can mean everything from creating simple file backup systems to implementing alternative processes available when connectivity issues impede the work of cloud-based digital tools. Having a solid substitute for any process or technology that could fail will keep your operation on track when hiccups occur.
Digital tools can also help manufacturers increase their resilience by providing greater supply chain transparency and predictive forecasting that can monitor trends and help you better anticipate the next disruption. Collecting and monitoring data from your supply chain, for instance, will allow you to see short- and long-term trends, while more easily recognizing potential deviations that could impede your production.
Resilience also includes the ability to maintain a stable operation for workers. Do your long-term goals make it possible for workers to have confidence they can depend on their jobs and feel safe and valued at work while being paid a living wage? An important part of building human-centric resilience through Industry 5.0 is having systems in place to offer a safety net for workers should the worst occur. Offering those workers robust training programs and the ability to improve their skills will ensure they see a future with your company, building the kind of loyalty that establishes stability in an operation.
Embracing the future
While Industry 5.0 is still mostly an abstract concept that hasn’t yet fully landed on the manufacturing floor, preparing for this next revolution may feel more comfortable than the transition from Industry 3.0 to Industry 4.0. Kumar says that even if you haven’t fully made the leap to Industry 4.0 — which he notes many companies have not — adapting to the next revolution of manufacturing may make incorporating the technological advances of the current revolution easier.
“Because Industry 5.0 is not totally about state-of-the-art technological advancement, it shouldn’t make people feel that they’re far behind,” he says. “It’s more about how we can make new technologies from Industry 4.0 work along with humans, so that the combined human and technological assets could be used in a more confident manner.”
Kumar says this is an opportunity for companies to be more thoughtful in their adaptation of new technologies and consider how those tools will impact their workers.
“As we develop these technologies and more of these technologies interface with humans, we need to look into issues such as privacy ethics and trust, as well as human values and needs,” he says.
Rada says there are simple changes companies can make now that will better position them to be successful once this fifth industrial revolution becomes reality. He advises companies to begin assessing their physical waste to find ways to cut or repurpose those materials — a practice that will not only save money, but also will reduce an organization’s environmental impact.
“Go to the waste container and look at what is inside,” he says. “You will see springs, you will see fabric. You will see a lot of things, and maybe at that moment you will realize that it is not waste if we do not waste it.”
As previous industrial revolutions have shown, change comes whether people are ready for it or not. Companies that refuse to adapt will likely be left behind as these shifts occur. The key to staying relevant, as well as profitable, is maintaining an open mind to change and understanding that it doesn’t all have to happen at once. Small steps can lead even the most traditional operation into a more prosperous future.