Industry 4.0 Technology on Workforce Employability and Skills

Version	Summary	Created by	Modification	Content Size	Created at	Operation
1		Md Tota Miah	--	1560	2024-02-09 14:28:22	\|
2	format correct	Mona Zou	Meta information modification	1560	2024-02-14 08:22:54	\|

This entry is adapted from the peer-reviewed paper 10.3390/economies12020035

Industry 4.0 South Asia workforce employability artificial intelligence data analytics digital skills labor market

1. Introduction

The Fourth Industrial Revolution (Industry 4.0 or I4.0) has gained increasing attention both in the academic and non-academic domains. Industry 4.0 was a term coined in 2011 in Germany. Since then, the academic literature describing and analyzing I4.0 technologies has grown considerably (Cannavacciuolo et al. 2023; Rad et al. 2022; Pereira et al. 2018). While so-called Industry 3.0 introduced computers, Industry 4.0 is characterized by advancements in computing technology including expanded digitalization in logistics, cognitive and connected machines in various industrial processes, and data analytics (Rahman et al. 2022). Leong et al. (2020) refer to I4.0 as having nine technological pillars: the Internet of Things, cloud computing, robots and autonomous systems, big data analytics, augmented reality, cybersecurity, simulation, system integration, and additive manufacturing. This new technological frontier is transforming the way businesses create value, how individuals perform their work, and the manner in which people connect and communicate with each other. I4.0 has significantly transformed job roles and the skill profiles required of workers (Ghislieri et al. 2018). These technologies are the cornerstones of changing industrial processes to substantially enhance productivity.

However, the rapid shift in robotization and digitalization are also a growing concern. Particularly in South Asian countries (e.g., Bangladesh, India, Pakistan, Nepal, Bhutan, Sri Lanka, Maldives, and Afghanistan), unemployment resulting from replacing jobs with robots is feared. Yet, employers and employees can adopt to technological changes in a timely way for the better of the future labor market (Bajaj et al. 2018). Researchers from engineering to management have increasingly concentrated their academic research on enabling Industry 4.0 technologies (Weerasekara et al. 2022; Perez Perales et al. 2018). Several studies particularly focused on the success factors and benefits of Industry 4.0 technologies while bypassing their downsides (Kadir et al. 2019; Bolbot et al. 2022; Echchakoui and Barka 2020). Studies are lacking that examine the effects of Industry 4.0 technologies on employment and skills.

2. Concept of Industry 4.0

Since the industrial trade fair Hannover Messe, Germany in 2011, the term “Industrie 4.0” has ignited a vision of a new industrial revolution and has been inspiring a lively, ongoing debate about the future of work (Dregger et al. 2016). The Fourth Industrial Revolution refers to the transformation of technology in the 21st century. It is creating a radical shift for employees, organizations, and society as a whole, given the impact of included and emerging technologies such as artificial intelligence and Internet of Things (Ross and Maynard 2021; Kowalikova et al. 2020). Savytska and Salabai (2021) consider I4.0 a trend within the Fourth Industrial Revolution. They found that businesses could benefit from new opportunities, expand operations, and increase efficiencies by integrating digital processes. Industry 4.0 covers a wide range of topics, such as production methods, productivity, data management, consumer relationships, and competitiveness. (Piccarozzi et al. 2018). According to Culot et al. (2020), I4.0 has evolved significantly, leading to similar concepts often referred to as “smart manufacturing”, “digital transformation”, and “fourth industrial revolution”. However, Erboz (2017) identified that the development of highly automated industries through human–machine interaction is one of the main aspects of Industry 4.0. Freund and Al-Majeed (2021) highlighted the effect of Industry 4.0 on both the micro and macro levels, including the financial, political, and socio-cultural spheres.

3. Historical Overview of the Industrial Revolution

Technological trends have a historical perspective. Figure 1 utilizes two sources to illustrate the history of industrial revolutions. The first industrial revolution, which started at the end of the 18th century, shifted production from labor-intensive to more capital-intensive production. The biggest changes came in the form of mechanization. The invention of steam-powered machines combined with the division of labor changed production technology from piece-to-piece production to mass production. The second industrial revolution started at the end of the 19th century, and by the middle of the 19th century, there were technological advancements helped the emergence of new sources of energy. This era saw the spread of electrification across the world, and radical transformation in transportation including the development of the automobile and the airplane. The third wave of industrialization started in the early 1970s with the development of the computer. This third industrial revolution led directly into the fourth because of how those computing technologies advanced. By the beginning of the 21st century, huge developments in communication and information technologies and software-based production technologies enabled the development of smart systems. Davies (2015) reported that the Europe Union was at the beginning of a new industrial revolution—Industry 4.0—in 2015. Member states began sponsoring national initiatives, such as “Industrie 4.0” in Germany, “the Factory of the Future” in France and Italy, and the Catapult centers in the United Kingdom. In the few short years since then, Industry 4.0 has spread everywhere and changed the production paradigm through a shift from work previously done by humans to work that is now automated (Klingenberg et al. 2022). Today, managers cannot ignore the technological revolution in the field of robotics, artificial intelligence, the Internet of Things, cyber-physical systems, augmented reality, virtual reality, biotechnology, nanotechnology, autonomous vehicles, cloud computing, and 3D printing (Sharma et al. 2021).

Figure 1. Timeline of the Industrial Revolutions based on: (Kagermann et al. 2013; Vaidya et al. 2018).

4. South Asia and Industry 4.0

South Asia is comprised of India, Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan, the Maldives, and Afghanistan. With its large population, emerging markets, government support, innovative culture, global supply chain presence, and digital infrastructure development, it is indeed an important region for the adoption of I4.0 technologies (Katekar and Deshmukh 2021; Rajamanickam 2016). According to the International Monetary Fund (2023), South Asian countries had a GDP of $4.65 trillion U.S. dollars, around 5% of the world economy, in 2023. Among these, India contributes the highest GDP of $3.73 trillion with Bangladesh at $446.35 billion U.S. dollars. Nepal, Bhutan, and Sri Lanka were among the countries with the lowest GDP in the Asia-Pacific region. In South Asia, the main economic activities include the services, industrial, and manufacturing sectors. Despite having tremendous economic potential, previous studies by Imrana et al. (2021) and Bishwakarma and Hu (2022) found gaps in human capital and innovation including the skills and training of the region’s current workforces.

As these countries continue to modernize their industries, I4.0 is poised to play a pivotal role in shaping their economic future and addressing critical social challenges. Studies, such as those by Su et al. (2017) and Schöning (2018), show productive outcomes in accelerating production, enhancing processes, and creating new opportunities by integrating I4.0 technologies. But there are significant challenges that need to be overcome. For example, in Bangladesh, the lack of awareness, insufficient capital, infrastructure limitations, shortage of skilled workers, and weak government policies are hindrances to the implementation of I4.0 (Bhuiyan et al. 2020; Suha and Sanam 2022). They emphasize the need for an information and communications (ICT) policy that focuses on integrating ICTs with smart industrialization. Hossain et al. (2023) found technical knowledge in the manufacturing industry is a key barrier to adopt the I4.0 in Bangladesh. In Pakistan, studies by Ali and Xie (2021) and Imran et al. (2018) found managerial challenges in adopting I4.0 technologies, including the need for competitive management, infrastructure, and economic stability in the textile industry and service sector. In India, the manufacturing and service sectors need more productivity and efficiency to manage these digital transformations (Jha 2021; Smolka and Papulova 2023). Researchers Kanji and Agrawal (2020) and Mezina et al. (2022) found I4.0 may increase social inequality while creating a heightened need for highly qualified personnel. The authors argue that appropriate policies and partnerships need to be implemented to ensure inclusive development in developing countries, especially in India, Bangladesh, and Pakistan.

I4.0 has significant implications on the future of work and skills required. The changes in the value chain and increased competitiveness among firms and consumers can impact global labor markets (Anuşlu and Frat 2019; Mohiuddin et al. 2022). According to Asian Development Bank (2021), 4IR technologies like the IOT, artificial intelligence, cloud computing, and cognitive computing could profoundly influence jobs and skills.

Labor markets in developing and developed countries are likely to undergo major transformations in the coming years and decades. By 2030, the region is expected to create more jobs than it displaces (Balliester and Elsheikhi 2018). Yet, the Global Innovation Index (GII) of 2023 shows that South Asian countries are not yet ready for I4.0 technology adoption. The index provides a comprehensive assessment of the innovation ecosystem across 132 economies in the world. The analysis shows (Figure 2) that India leads among lower middle-income countries in the world and ranks overall 40th in the world. Among other South Asian countries, Bangladesh, Nepal, Pakistan, and Sri Lanka exhibit poor ranking in creative outputs, impeding their ability to generate new ideas and innovations, and infrastructure readiness, which are critical factors for I4.0 success. These countries, along with India, face challenges in other key areas such as market sophistication, knowledge and technology outputs, and institutions. Moreover, many displaced workers may struggle to transition smoothly to new roles. South Asian countries need to prepare their workforce for the impending labor market changes with substantial and timely investments in skills development, especially within the key sectors of the automotive industry, textiles, and tourism.

Figure 2. Global innovation index on seven pillars. Source: Brás (2023).

References

Cannavacciuolo, Lorella, Giovanna Ferraro, Cristina Ponsiglione, Simonetta Primario, and Ivana Quinto. 2023. Technological Innovation-Enabling Industry 4.0 Paradigm: A Systematic Literature Review. Technovation 124: 102733.
Rad, Fakhreddin F, Pejvak Oghazi, Maximilian Palmie, Koteshwar Chirumalla, Natallia Pashkevich, Pankaj C Patel, and Setayesh Sattari. 2022. Industry 4.0 and Supply Chain Performance: A Systematic Literature of the Benefits, Challenges, and Critical Success Factors of 11 Technologies. Industrial Marketing Management 105: 268–93.
Pereira, Gustavo Bernardi, Adriana de Paula Lacerda Santos, and Marcelo Gechele Cleto. 2018. Industry 4.0: Glitter or Gold? A Systematic Review. Brazilian Journal of Operations & Production Management 15: 247–53.
Rahman, Noorul Shaiful Fitri Abdul, Abdelsalam Adam Hamid, Taih-Cherng Lirn, Khalid Al Kalbani, and Bekir Sahin. 2022. The Adoption of Industry 4.0 Practices by the Logistics Industry: A Systematic Review of the Gulf Region. Cleaner Logistics and Supply Chain 5: 100085.
Leong, Wai Yie, Joon Huang Chuah, and Tee Boon Tuan. 2020. The Nine Pillars of Technologies for Industry 4.0. Selangor: Institution of Engineering and Technology, p. 576.
Ghislieri, Chiara, Monica Molino, and Claudio G. Cortese. 2018. Work and Organizational Psychology Looks at the Fourth Industrial Revolution: How to Support Workers and Organizations? Frontiers in Psychology 9: 1–6.
Bajaj, Shweta, Ruchi Garg, and Monika Sethi. 2018. Total Quality Management: A Critical Literature Review Using Pareto Analysis. International Journal of Productivity and Performance Management 67: 128–54.
Weerasekara, Sachini, Zhenyuan Lu, Burcu Ozek, Jacqueline Isaacs, and Sagar Kamarthi. 2022. Trends in Adopting Industry 4.0 for Asset Life Cycle Management for Sustainability: A Keyword Co-Occurrence Network Review and Analysis. Sustainability 14: 12233.
Perez Perales, David, Faustino Alarcon Valero, and Andres Boza Garcia. 2018. Industry 4.0: A Classification Scheme. In Closing the Gap between Practice and Research in Industrial Engineering. Edited by E. Viles, M. Ormazabal and A. Lleo. Lecture Notes in Management and Industrial Engineering. Cham: Springer International Publishing Ag, pp. 343–50.
Kadir, Bzhwen A., Ole Broberg, and Carolina Souza da Conceição. 2019. Current Research and Future Perspectives on Human Factors and Ergonomics in Industry 4.0. Computers and Industrial Engineering 137: 106004.
Bolbot, Victor, Ketki Kulkarni, Päivi Brunou, Osiris Valdez Banda, and Mashrura Musharraf. 2022. Developments and Research Directions in Maritime Cybersecurity: A Systematic Literature Review and Bibliometric Analysis. International Journal of Critical Infrastructure Protection 39.
Echchakoui, Saïd, and Noureddine Barka. 2020. Industry 4.0 and Its Impact in Plastics Industry: A Literature Review. Journal of Industrial Information Integration 20: 100172.
Dregger, Johannes, Jonathan Niehaus, Peter Ittermann, Hartmut Hirsch-Kreinsen, and Michael Ten Hompel. 2016. The Digitization of Manufacturing and Its Societal Challenges: A Framework for the Future of Industrial Labor. Paper presented at the 2016 IEEE International Symposium on Ethics in Engineering, Science and Technology (ETHICS), Vancouver, BC, Canada, May 13–14.
Ross, Philip, and Kasia Maynard. 2021. Towards a 4th Industrial Revolution. Intelligent Buildings International 13: 159–61.
Kowalikova, Petra, Petr Polak, and Roman Rakowski. 2020. The Challenges of Defining the Term “Industry 4.0”. Society 57: 631–36.
Savytska, O., and V. Salabai. 2021. Digital Transformations in The Conditions of Industry 4.0 Development. Financial and Credit Activity-Problems of Theory and Practice 3: 420–26.
Piccarozzi, Michela, Barbara Aquilani, and Corrado Gatti. 2018. Industry 4.0 in Management Studies: A Systematic Literature Review. Sustainability 10: 3821.
Culot, Giovanna, Guido Nassimbeni, Guido Orzes, and Marco Sartor. 2020. Behind the Definition of Industry 4.0: Analysis and Open Questions. International Journal of Production Economics 226: 107617.
Erboz, Gizem. 2017. How to Define Industry4.0: The Main Pillars of Industry 4.0. In Managerial Trends in the Development of Enterprises in Globalization Era. Edited by I. Kosiciarova and Z. Kadekova. 761-67. Tr A Hlinku2, Nitra, 94976. Slovakia: Slovak Univ Agriculture Nitra. Available online: https://www.researchgate.net/publication/326557388_How_To_Define_Industry_40_Main_Pillars_Of_Industry_40 (accessed on 18 January 2024).
Freund, Lucas, and Salah Al-Majeed. 2021. Managing Industry 4.0 Integration—The Industry 4.0 Knowledge & Framework. Logforum 17: 569–86.
Davies, Ron. 2015. Industry 4.0 Digitalization for Productivity and Growth. Available online: https://policycommons.net/artifacts/1335939/industry-40/1942749/ (accessed on 19 December 2023).
Klingenberg, Cristina Orsolin, Marco Antônio Viana Borges, and José Antônio do Vale Antunes. 2022. Industry 4.0: What Makes It a Revolution? A Historical Framework to Understand the Phenomenon. Technology in Society 70: 102009.
Sharma, Arun Kumar, Rakesh Bhandari, Camelia Pinca-Bretotean, Chaitanya Sharma, Shri Krishna Dhakad, and Ankita Mathur. 2021. A Study of Trends and Industrial Prospects of Industry 4.0. Materials Today: Proceedings 47: 2364–69.
Kagermann, Henning, Wolfgang Wahlster, and Johannes Helbig. 2013. Recommendations for Implementing the Strategic Initiative Industrie 4.0: Final Report of the Industrie 4.0 Working Group. Berlin, Germany: Available online: https://www.din.de/resource/blob/76902/e8cac883f42bf28536e7e8165993f1fd/recommendations-for-implementing-industry-4-0-data.pdf (accessed on 17 January 2024).
Vaidya, Saurabh, Prashant Ambad, and Santosh Bhosle. 2018. Industry 4.0—A Glimpse. Procedia Manufacturing 20: 233–38.
Katekar, Vikrant, and Sandip S Deshmukh. 2021. En Route for the Accomplishment of SDG-7 in South Asian Countries: A Retrospective Study. Strategic Planning for Energy and the Environment 40: 195–230.
Rajamanickam, Srinivasan. 2016. Exploring Landscapes in Regional Convergence. In Handbook of Research on Global Indicators of Economic and Political Convergence. Pennsylvania: IGI Global, pp. 474–510.
International Monetary Fund. 2023. World Economic Outlook: Navigating Global Divergences. Washington, DC. Available online: https://www.imf.org/en/Publications/WEO/Issues/2023/10/10/world-economic-outlook-october-2023 (accessed on 19 December 2023).
Imrana, Syed Muhammad, Syed Mumtaz Ali Kazmib, Farva Jawadc, and Iqra Ghousd. 2021. The Impact of Human Capital on Innovation: Empirical Evidence from South Asian Association for Regional Cooperation (SAARC). International Journal of Innovation, Creativity and Change 15. Available online: https://www.ijicc.net/images/Vol_15/Iss_8/15919_Imran_2021_E_R.pdf (accessed on 18 January 2024).
Bishwakarma, Jham Kumar, and Zongshan Hu. 2022. Problems and Prospects for the South Asian Association for Regional Cooperation (SAARC). Politics & Policy 50: 154–79.
Su, Shun-Feng, Imre J Rudas, Jacek M Zurada, Meng Joo Er, Jyh-Horng Chou, and Daeil Kwon. 2017. Industry 4.0: A Special Section in IEEE Access. IEEE Access 5: 12257–61.
Schöning, Harald. 2018. Industry 4.0. IT—Information Technology 60: 121–23.
Bhuiyan, Abul Bashar, Md Jafor Ali, Norhayah Zulkifli, and Mokana Muthu Kumarasamy. 2020. Industry 4.0: Challenges, Opportunities, and Strategic Solutions for Bangladesh. International Journal of Business and Management Future 4: 41–56.
Suha, Sayma Alam, and Tahsina Farah Sanam. 2022. Challenges and Prospects of Adopting Industry 4.0 and Assessing the Role of Intelligent Robotics. Paper presented at the 2022 IEEE World Conference on Applied Intelligence and Computing (AIC), Sonbhadra, India, June 17–19.
Hossain, Sourav, Sanjida Hassan, and Rubayet Karim. 2023. Assessment of Critical Barriers to Industry 4.0 Adoption in Manufacturing Industries of Bangladesh: An ISM-Based Study. Brazilian Journal of Operations & Production Management 20: 1797.
Ali, Shahbaz, and Yongping Xie. 2021. The Impact of Industry 4.0 on Organizational Performance: The Case of Pakistan’s Retail Industry. European Journal of Management Studies 26: 63–86.
Imran, Muhammad, Waseem ul Hameed, and Adnan ul Haque. 2018. Influence of Industry 4.0 on the Production and Service Sectors in Pakistan: Evidence from Textile and Logistics Industries. Social Sciences 7: 246.
Jha, Pratiksha. 2021. Digitization and Industry 4.0 Practices: An Exploratory Study on SMEs in India. SSRN Electronic Journal, 1–8.
Smolka, David, and Zuzana Papulova. 2023. Industry 4.0 Adoption—A Case of Manufacturing Companies. In Human Interaction & Emerging Technologies (IHIET 2023): Artificial Intelligence & Future Applications. New York: AHFE Open Access, vol. 111, pp. 934–41.
Kanji, Repaul, and Rajat Agrawal. 2020. Exploring the Use of Corporate Social Responsibility in Building Disaster Resilience through Sustainable Development in India: An Interpretive Structural Modelling Approach. Progress in Disaster Science 6: 100089.
Mezina, T. V., A. V. Zozulya, P. V. Zozulya, T. F. Chernova, and A. V. Pletnyova. 2022. Impact of Industry 4.0 on the Economy and Production. Vestnik Universiteta 2: 71–76.
Anuşlu, Merve Doğruel, and Seniye Ümit Frat. 2019. Clustering Analysis Application on Industry 4.0-Driven Global Indexes. Procedia Computer Science 158: 145–52.
Mohiuddin, Muhammad, Md. Samim Al Azad, Selim Ahmed, Slimane Ed-Dafali, and Mohammad Nurul Hasan Reza. 2022. Evolution of Industry 4.0 and Its Implications for International Business. In Global Trade in the Emerging Business Environment. London: IntechOpen.
Asian Development Bank. 2021. Reaping the Benefits of Industry 4.0 through Skills Development in High-Growth Industries in Southeast Asia. Metro Manila: ADB Publications.
Balliester, Thereza, and Adam Elsheikhi. 2018. The Future of Work: A Literature Review. ILO Research Department Working Paper 29: 1–54. Available online: https://englishbulletin.adapt.it/wp-content/uploads/2018/07/wcms_625866.pdf (accessed on 19 December 2023).
Brás, Gonçalo Rodrigues. 2023. Pillars of the Global Innovation Index by Income Level of Economies: Longitudinal Data (2011–2022) for Researchers’ Use. Data in Brief 46: 108818.

© Text is available under the terms and conditions of the Creative Commons Attribution (CC BY) license; additional terms may apply. By using this site, you agree to the Terms and Conditions and Privacy Policy.

Upload a video for this entry

Information

Subjects: Industrial Relations & Labor

Contributors MDPI registered users' name will be linked to their SciProfiles pages. To register with us, please refer to https://encyclopedia.pub/register :

View Times: 280

Update Date: 14 Feb 2024

Table of Contents

Video Upload Options

Confirm