Industry 4.0 – the fourth industrial revolution

The economy is currently on the threshold to a fourth industrial revolution. The purpose of this turnaround is to make production more flexible, efficient, intelligent but also more individual. Therefore, it can be said that after decades of mass production the way goes back to single-unit production. The German government has also discovered the chances of this trend and so they started investing in research of this so-called “Industry 4.0”. What are the developments we can look forward to? Which are the motivating forces of the Industry 4.0 and which were the motivating forces of the first three industrial revolutions? We want to answer these questions in this blog post.


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Industry 4.0 and the path towards it

As we talk about the fourth industrial revolution – respectively Industry 4.0 – there should have been three industrial revolutions before, right? Yes, they have been! To give you a better appreciation of the motivating forces and the incidents of these three important steps let us briefly introduce them to you.

The “first industrial revolution” started at the end of the 18th century through the development and launch of mechanical manufacturing plants in England. These were driven by water- and steam power. In this case especially the improvement of the steam engine of James Watt played an important role. In 1776 he succeeded in raising the efficiency and therefore he made it possible to build big factories apart from rivers. These steam engines were first used in the mining sector for the water retention. At the same time they were used to power textile machines and later on also to power vehicles.

The “second industrial revolution” took place at the beginning of the 20th century with the launch of mass production using electrical energy. Germany focused on the development of new technologies and replaced England as the leading technology exporter. For example, the Otto engine was developed in 1877. It was able to produce the required energy by the combustion of petroleum. As a result engines in the factories no longer had to be supplied with energy by space-consuming mechanical shafts. Henceforth, they were decentralized connected to the electricity grid. At this time especially the assembly-lines became popular, e.g. at the production of the Ford model T from 1908 to 1927. This vehicle was produced on the assembly-line in piece-work. For this reason the sales price was reduced from 850$ to 370$.

At the beginning of the 1970s, the “third industrial revolution” had started. It was characterized by the use of electronics and IT as well as further automation of the production. Through the development of  microchips and because of the general computerization we are talking about the “digital revolution”. The “digital goods” – what means the software and the digital data – became more important but also brought new challenges: self-written software had to be secured preventative against unwanted transfer. In addition, automation became more flexible and in cause of international communication networks like the Internet, the world-wide communication was greatly simplified. This development promoted the trade across national borders and led to an international interdependency in many sectors – the so-called globalization.

Industry 4.0 – the fourth industrial revolution

We are currently at the threshold to the fourth industrial revolution. The “Industry 4.0” refers to automated production that uses intelligent systems. That means that manufacturing plants, engines and the manufactured products are connected and thus they are able to communicate. Here is an example how a scenario for a private citizen could look like: A component of a car will wear out little by little. If it is time to replace that component, the component itself tells the manufacturer that it will soon be worn out and that it is time to install a spare part. The manufacturer produces this component and delivers it to the right garage just in time. This garage will also be informed automatically and therefore is able to make an appointment with the owner of the car.

In the area of production, the will also involve drastic changes. If a component passes a production plant, which is based on the principles of the Industry 4.0, each component at each processing station does exactly know how it currently looks and how it is going to look at the end of the process. If a component has to be cut on a milling machine, it will first check which milling machine is available at the moment. After that, the component will be forwarded to this processing station. When arriving at the processing station, the individual identifier will give the information about the processing program. Now, the milling operation will be done in order to the deposited manufacturing plan. Thus, the trend of the mass production will go back to the industrially manufactured single-unit production because it will be profitable again. The production will be highly-organized and for this reason it will save precious time and materials for the company.

The new revolution also represents a great opportunity for medium-sized enterprises. They have structural advantages and due to their highly skilled and specialized employees which are mostly involved in corporate decisions, they are more flexible and more innovative. Focusing on Industry 4.0 can therefore happen much faster and more efficient than in large holdings with a huge administrative system and mostly rigid structures.

Another reason why it is important to automate processes is that the “baby boomer generation” of the 1960s will soon attain the retirement age. At that time, just after the war, the birth rate was at 1.400.000 childbirths per year. Nowadays it decreased by half. The companies by now complain about the shortage of workers. Also the care facilities are more and more filled up. In order to be productive in future and to replace the missing workers, it is important to focus on automation.


The purpose of each company is to be more efficient and more cost-effective than the competitors. Here, Industry 4.0 can make a significant contribution. For this reason, an investment in this technology can be very useful in some sectors. In case you see the Industry 4.0 as a chance for your company, it is a step you should take now and not later when your competitors have already done it.

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