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Misunderstanding Industry 4.0: Indonesia's premature leap toward revolution
There are widespread misunderstandings about what the new industrial revolution, particularly Industry 4.0, truly entails.
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Hard at work: A farmer tills a plot of land using a hand-held tractor in Lumajang, East Java, on Nov. 6. (Antara Foto/Irfan Sumanjaya)
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member of the Indonesian House of Representatives recently urged state-owned enterprises (SOEs) to prepare for Industry 5.0, expressing concerns that humans would be replaced by robots. His reference to Industry 5.0 was not a mere slip of the tongue; the term has increasingly been used by politicians, academics and citizens to describe the use of robots and other emerging technologies.
However, the reality is that even highly industrialized countries have yet to fully harness the potential of Industry 4.0, as noted by Ralf Seifert, a professor at École Polytechnique Fédérale de Lausanne in Switzerland. Discussions about Industry 5.0, therefore, are premature, as it does not yet exist. This confusion highlights a broader issue of widespread misunderstandings about what the new industrial revolution, particularly Industry 4.0, truly entails. These misconceptions arise from varying levels of technological maturity, inconsistent adoption rates and, most importantly, a lack of understanding of the core principles driving this transformative industrial paradigm.
The driving force behind Industry 4.0 originated in Germany's industrial sector, driven by concerns over declining competitiveness as manufacturing technologies and industries increasingly relocated to Asia, particularly China, attracted by lower labor and production costs. Germany's traditional industrial hubs faced mounting pressure, mirroring a broader trend across Europe.
Once a global center for innovation, Europe now struggles under the weight of excessive regulation and taxation, leading to a significant shift in innovation dynamics. This shift is emphasized by China's technological advantage, prompting the European Union to introduce stricter trade policies for clean technologies. Notably, the EU plans to require Chinese companies to transfer intellectual property to European businesses in exchange for subsidies, reflecting efforts to address this growing disparity.
Previous industrial revolutions were focused on achieving efficiencies through mass production, significantly lowering production costs. However, this model was no longer sufficient to maintain competitiveness in Europe. To address this challenge, Germany introduced the concept of “Industrie 4.0” at the Hannover Fair in 2011. The vision behind Industry 4.0 was to create a new technological standard that could enable the production of highly customized products at costs comparable to mass-produced items. The core objective was to leverage digital transformation and cyber-physical systems to connect and modernize industrial production, making German industries more sustainable, resilient and globally competitive. Recognizing its strategic importance, the German federal government backed the initiative.
In 2013, several German industrial associations, supported by the federal government, established Plattform Industrie 4.0, a collaborative initiative to advance and implement Industry 4.0. This platform brought together diverse stakeholders, including industry leaders, academic researchers, policymakers and trade unions, to shape the future of smart, connected manufacturing.
