Industry 4.0 will arrive unevenly

Subject

Outlook for industry 4.0.

Significance

Dubbed variously 'Industry 4.0', 'intelligent manufacturing' or the 'internet of everything', cyber-physical systems that control the flow of materials, products and information are starting to transform industrial production and supply chains. They will eventually disrupt business models and challenge policymakers.

Impacts

• Improved production flexibility and vertical integration with customers should facilitate bespoke manufacturing ('mass customisation').
• Entire value chains will vertically integrate, embracing product design, procurement, production, distribution, sales and maintenance.
• Horizontal integration around smart factories will create new business models based on manufacturing as a service (MaaS).
• Pay-by-use and subscription-based MaaS could upend traditional models for financing capital expenditure on plant and equipment.