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Insights into Editorial: It’s time for Industry 4.0




Industrial Revolution 4.0 refers to the fourth industrial revolution related to manufacturing and chain production.

Industry 4.0 is a complex Cyber-Physical Systems which synergizes production with digital technologies, the Internet of Things, Artificial Intelligence, Big Data & Analytics, Machine Learning and Cloud Computing.

The term ‘Industry 4.0’ was coined by the German government in 2011.

Additive manufacturing, Internet of Things, Cyber Physical Systems, Augmented Reality/Virtual Reality and data analytics are some of the technologies associated with Industry 4.0.

With the help of these technologies, the manufacturing industry will be able to make data-driven decisions.


The potential of MSMEs for India:

  1. Micro, Small and Medium Enterprises (MSMEs) are expected to become the backbone of India as the economy grows larger.
  2. MSMEs form more than 95% of the industries in India, produce more than 45% of the total manufacturing output and employ more than 40% of the workforce.
  3. According to the Economic Survey 2020-21, over 6 crore MSMEs employ more than 11 crore people and contribute roughly 30% to the GDP and half of the country’s export.
  4. MSMEs are also ancillaries to larger enterprises, leading to a seamless supply chain integration.
  5. As a result, making MSMEs more efficient will be advantageous for the whole economy.


‘Industry 4.0’ and MSMEs:

  1. In emerging economies such as India, inclusive development is particularly pertinent in addressing COVID-19’s impact.
  2. MSMEs are critical for ensuring that economically vulnerable people have suitable opportunities to rise above the poverty line.
  3. These cohorts include women, migrants, and minorities, who have a better chance of exiting poverty by taking up employment in MSMEs spread across India.
  4. The sector assumes a pivotal role in driving the government’s Make in India initiative for an Aatma Nirbhar Bharat.
  5. Through the Fourth Industrial Revolution’s new-age business model, smart corporations and digitally-enabled MSMEs can enjoy a symbiotic relationship that promotes greater production efficiency, ensures lower time to market as well as higher service satisfaction for customers and other stakeholders.
  6. Given their role in promoting inclusive development, if MSMEs miss the global automation journey, it will exacerbate economic inequality.
  7. In addressing this issue, MSMEs need to leverage the support that the government and industry ecosystem offers to work for the common cause in overcoming these challenges.


Challenges with regard to Industry 4.0 for MSMEs:

MSMEs face challenges when it comes to adopting new technologies such as Industry 4.0.

  1. First, they lack awareness regarding Industry 4.0 and its benefits.
    1. They consider such technologies disruptive and having the potential to demolish their existing system.
    2. However, Industry 4.0 believes in improving the existing system. Scientific literature provides evidence of sensors and WiFi networks being integrated with old machines like lathes and mills to improve their performance.
  2. Second, MSMEs will need to make major financial investments to adopt Industry 4.0. Investing in the right set of technologies will need experts and consultants as well.
  3. Third, for any new technology to be adopted, an organisation requires a positive organisational culture and the support of people.
    1. MSMEs need to believe in the advantages that Industry 4.0 technologies can offer.
  4. Fourth, the frameworks and steps that can assist MSMEs in adopting Industry 4.0 technologies have been missing.
    1. In this regard, MSMEs need to understand the data they are producing from all their operational activities. Based on such data, their readiness can be evaluated.
  5. Finally, MSMEs should develop their own vision of Industry 4.0 technologies that they want to adopt and identify the relevant tools and practices they need for such a tailored vision.


Advantage of data-driven decision-making results in Industrial Initiatives:

  1. Though adoption of Industry 4.0 technologies by MSMEs requires transcending a labyrinth of impediments, it will make them more competitive as they will be able to offer world-class quality products to customers.
  2. Additionally, delivery timings and the flexibility to meet different needs will improve.
  3. Thus, Industry 4.0 integrated ‘data’ with manufacturing and Information Technology.
  4. To take advantage of data-driven decision-making, the governments of other countries also coined their own industrial initiatives like Industry 4.0.
  5. Integrating MSMEs into the smart manufacturing realm is also required because the world of connected devices and sensors offers a treasure trove of data that can drive better business outcomes through substantial insights.
  6. Moreover, connected gadgets make up the edge devices of the IIoT (Industrial Internet of Things), which is the fountainhead of Industry 4.0.
  7. For example, the U.S. calls it Smart Manufacturing, China calls it Made in China 2025, and India refers it to as Make in India or Digital India.
  8. Therefore, if MSMEs are mainstreamed into Industry 4.0, all stakeholders stand to gain.
  9. Corporates can gain from an indigenous and reliable supply chain, the government from higher tax revenues, and society at large, from more inclusive outcomes and opportunities.



As India joined the group of top 50 countries in the global innovation index for the first time in 2020, it is imperative for its MSMEs to embrace Industry 4.0 technologies without any hesitation.

Proper sensitisation of the Government of India, higher education institutions, practitioners, entrepreneurs, industrial associations, trade unions, venture capitalists, consultants and research agencies would help to speed up this task.

This becomes imperative given the manufacturing challenges abruptly posed by the COVID-19 pandemic when most of the healthcare infrastructure in India is MSME-dependent.