What is Industry 4.0?

Industry 4.0 refers to the rapid technological change that is disrupting businesses across all industries.

Advances in communication technologies, devices connected to the internet and data analytics are occurring at a much quicker pace than at any other time in history. As a result, many believe we are now living through a fourth industrial revolution, referred to as ‘industry 4.0’ (i4.0).

Computers and self-reporting smart sensors are found in even the smallest of devices (such as smartphones)—with data stored and analysed on the internet (the cloud). As a result, there is so much data that the term big data was coined to refer to it and systems have been created to learn from this data by identifying patterns. This has enabled businesses across all industries to access new insights that have helped to optimise operations and improve efficiencies.

Industrial Revolutions

Explore Industry 4.0

The term industry 4.0 was coined in 2011 after an association in Germany, made up of representatives from business, politics and academia, created an initiative known as ‘Industrie 4.0’. This initiative aimed to strengthen the German manufacturing industry and gained the support of the German Government, leading to the creation of the Industrie 4.0 Working Group in 2013.  

This triggered responses from other countries, particularly those with large manufacturing industries, and governments around the world began work on their own industry 4.0 initiatives. This included the Australian Government, which created the Prime Minister’s Industry 4.0 Taskforce in 2017 and Industry 4.0 Testlabs pilot program in 2018 to explore the principles and framework for adopting industry 4.0.

How will industry 4.0 affect my business?

For your business industry 4.0 presents both opportunities and challenges. Industry 4.0 technologies have the potential to significantly increase Australia’s economic competitiveness, with automation alone set to provide a $2.2 trillion boost to our national income between 2015 and 2030 from productivity gains2.

Technological innovations allow businesses to make better use of human effort, with machines taking over mundane tasks so that employees can focus on skills unique to humans such as critical thinking, creativity and emotional intelligence. This opens up new opportunities for businesses to improve and optimise their operations.

In order to fully realise these benefits, businesses need to have the right skills in their workforce, including digital skills to help in the transition to industry 4.0.   

The Foundation for Young Australians estimates that 90% of the workforce will need a basic level of digital literacy within two to five yearsand already, the digital skills gap is impacting 54% of organisations globally4.

By embracing digital capabilities and employing digital skills, businesses can stay ahead of the curve, increasing productivity, lowering their operating costs, becoming more innovative, gaining a competitive advantage and upskilling their workforce.


1Hermann, M, Pentek, T & Otto, B 2015, Design Principles for Industrie 4.0 Scenarios: A literature review (Working Paper No. 01), TU Dormund.


3alphaBeta 2017, The new work order - Ensuring young Australians have skills and experience for the jobs of the future, not the past, The  Foundation for Young Australians.

4Capgemini & LinkedIn 2017, The Digital Talent Gap: Are Companies Doing Enough?

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