According to the European Commission's paper "Enabling Technologies for Industry 5.0," the industry represents 20% of Europe's GDP and is subject to various risks stemming from an increasingly globalized context. The manufacturing sector's response to these challenges has always been innovation, which in the last 15 years has led to the birth and spread of the Industry 4.0 model, hailed as a revolution in terms of efficiency and productivity.
Industry 4.0: A Technological Paradigm
Industry 4.0, or smart manufacturing, is an industrial model based on the digitization and integration of advanced technologies, from IoT to artificial intelligence, including cloud computing and augmented reality, aimed at maximizing efficiency, productivity, and growth at the level of individual organizations, supply chains, and systems.
The enormous investments made over the years, facilitated by government incentives, have allowed companies to reduce waste, meet their customers' needs, avoid productivity drops (with predictive maintenance being a typical solution), prevent critical issues, and, with a higher level of observation, overcome the challenges of constantly changing markets and economies. This growth also positively impacts the labor market, even though the manufacturing sector is plagued by one of the most significant skills gaps in the economic fabric.
The limitation of the 4.0 paradigm is that it has never elevated its point of view, meaning it has never considered the organization within the contemporary context it lives in and its major challenges, from climate change to social inequalities. As the Commission stated, "The Industry 4.0 paradigm, as currently conceived, is not fit for purpose in a context of climate crisis and planetary emergency, nor does it address deep social tensions."
Industry 5.0: What It Is and Its Pillars
To address the limitations of Industry 4.0, which were conceptual long before technological, the 5.0 paradigm was conceived, beginning to spread after the EU Policy Briefing of 2021 but circulating since 2015.
The model does not intend to create any break with its predecessor, at least from a technological point of view; rather, it "integrates the current 4.0 approach by specifically putting research and innovation at the service of the transition to a sustainable, human-centric, and resilient European industry." In other words, 5.0 operates on the same ground and with similar technologies but shifts the focus to people and the planet. It is indeed a revolution, but in approach and culture, not technology.
Human Centricity, beyond automation
The centrality of technology, typical of Industry 4.0, gives way to human beings, well-being, creativity, and autonomy. The paradigm shift is motivated by the intent to value talent over an evolutionary model that for decades has focused on automation but is now caught off guard by today's key issues such as mass personalization.
Without losing ground on efficiency, productivity, and time-to-market fronts, the 5.0 model envisions processes being designed collaboratively combining the capabilities of machines with the humans’ ones. Not surprisingly, one of the distinctive technological elements of Industry 5.0 is Collaborative Robots (or Cobots), designed specifically to interact with humans in the same environment, something unthinkable even a few years ago due to safety reasons.
Cobots are not the only human-centric manifestation: companies are also accelerating the adoption of AI solutions in their processes, but leaving human traits like instinct, ethical judgment, and creativity a key role at the decision-making level. This way, they can harness the potential of technologies without losing sight of the value of experience, ensuring more informed and sustainable decisions, even in everyday operations.
The human-centric approach also manifests in the responsibility of companies to continuously train their employees, mitigating the skills gap. Additionally, it places a strong focus on social responsibility issues, ensuring that the adoption of new technologies and the focus on productivity do not significantly impact employment or violate workers' rights.
Sustainability and Circular Economy by Design
Industry 5.0 places environmental, social, and economic sustainability at the center, and does so at all levels: individual organization, supply chain, and system.
The core principle that every organization should be inspired by is a regenerative and circular economy by design, based on minimizing waste and reusing resources. Digital technology plays a central role in this context, allowing for the monitoring of material flows, optimization of logistics, and information acquisition throughout the product lifecycle. Through data analysis, it is possible to extend the product's life and effectively manage regeneration processes.
The potential impact is significant not only in terms of ESG (Environmental, Social, Governance) ratings, which can influence access to various opportunities such as incentives and financing; it also enhances brand reputation, attracts talent increasingly interested in companies' environmental and social commitment, and creates innovative business models, such as those based on servitization.
Advanced technologies, such as digital twins, smart materials, AI, and energy efficiency solutions, contribute positively to the success of sustainability initiatives, with impacts that can now be quantified and monitored through specific indicators.
A Resilient Industrial Model
It is no coincidence that the acceleration of Industry 5.0 occurred in the last 3 or 4 years. COVID-19 and subsequent geopolitical tensions have highlighted the fragility of traditional industrial models and supply chains. The need to quickly adapt to unexpected changes, such as those caused by the pandemic, has reinforced the importance of adopting practices and technologies that promote resilience. This means extending and distributing supply chains so they can withstand unforeseen events and adapt quickly to changes.
Technological contributions can be significant in this respect, beyond traditional redundancies and business continuity strategies: for instance, digital twins allow for the simulation of crisis scenarios, while artificial intelligence can leverage its predictive capabilities to facilitate informed and rapid decisions, crucial during periods of instability.
The Revolution Is Here, and Real
While Industry 4.0 enchanted people with its high-profile technological ensemble, Industry 5.0 proposes an even deeper change. Building on the digitization and digitalization introduced by its predecessor, 5.0 proposes an industrial model capable of addressing the great challenges of our time.
Industry 5.0 invites all organizations, governments, and businesses to evolve towards sustainable economic models that combine economic growth with respect for human, environmental, and social components, without which it is impossible to ensure lasting and inclusive progress.
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