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Industry 4.0

Call it the “Fourth Industrial Revolution” or the more hip “Industry 4.0” if you like. What matters most is that industry, or the process of making things, is changing in ways that seem fundamental and permanent. The world is moving on to a new era which, difficult as times like this can be to understand, appears to be rather well defined and describable.

If you do a deep dive into Industry 4.0, however, there is still something missing. It’s the “why” of the process which seems to be at least assumed, if not elusive. Not just why it is happening, but why it is being driven now and why it is expected to cast aside Industry 3.0.

What’s missing in the increasing chatter of Industry 4.0 appears to be the fundamental force behind it, which is the decline of what we might call “capitalism” in favor of a purely market centered, low overhead “marketism” approach.

A general depiction of the four proposed stages of industrial development.

There is a lot to this topic, so it’s probably best to simply dive into criticisms and definitions. There are many who deny that there is any such thing in the first place. Yes, this thinking goes, technology is changing the way the world works in many ways. But this is an evolution, not a step change. Nothing is particularly new about any of this, and industry has constantly evolved for centuries.

The staunchest critics note that this view is being pushed especially hard by the World Economic Forum, best known for the Davos Conference, since 2016, particularly its founder and chairman Klaus Schwab. This is an important point that we will come back to later. But is all of this really just one man’s personal crusade to shape and define the world?

Let’s start with what it means. Industry 4.0 is different from Industry 3.0 in that it has the following four characteristics:

  • Transparency: Information is shared, and the inner workings of the product as well as the company are known. Machines communicate frequently through wireless transfer as well.
  • Interoperability: Things work with other things according to standards. This can also include intraoperability, or that products are made primarily of other technologies stitched together.
  • Human factors: From design and user experience (UX) considerations through to support and service, the utility of manufactured devices is more developed and yet simpler.
  • Decentralization: Manufacturing is performed everywhere, with supply chain management the most critical consideration. Machines themselves make autonomous decisions, too.

User Experience (UX) is at the center of products.

All of these are clearly inter-related in many ways. From the perspective of end users, the experience can best be described as “plug & play” as things work right out of the box. From an historical perspective, much of this is the culmination of the work of W Edwards Deming developing what we know as Total Quality Management (TQM).

What is most striking, however, is that all of these are described in terms of industrial and consumer principles. Industry 4.0 is defined by and for Industry 3.0 and presumes a strong link between industry and the consumer without even describing that link. It’s assumed. As every engineer can tell you, the devil is never in the details as much as he lurks in the assumptions.

Industry 4.0 is all about the shift from Industry domination to market domination.

This is where the “why” of it all becomes important. The primary reason for all this that markets are demanding it, that consumers want more from their products. It’s not a revolution but an evolution. Yet not only are all these points defined by a global open market, they are made essential by one.

Industry 4.0 is by, for, and of marketism. So how do we cast these same elements in market terms?

  • Transparency: In many ways, this is simply integrating marketing into every aspect of producer and product. You don’t buy a car, you buy a 2.2 liter turbocharged seven speed with a fully independent suspension. Transparency is all about product and brand definition.
  • Interoperability: As surely as markets tend towards standardization or monopoly, industry must trend towards interoperability. Value is added when a product plays well with others. This is the flip-side of brand identification in that a certain sameness is required to meet expectations set by the market.
  • Human factors: A product that simply works well out of the box is a product with low overhead. Gone are training costs and specialized skill sets. When there are problems, someone is there to help, often at a small cost which provides an ongoing revenue stream.
  • Decentralization: Shipping and customization have long been the bane of industry, and the inventory in warehouses or on the road has defined the limits of TQM for some time. Products need to be in the hands of consumers. And more value is added if the products can make decisions.

The concept of a market starts here.  But it goes much, much further.

The move towards marketism, or the integration of market values and considerations through the entire manufacturing process up through to management systems, is what defines all of this. It can also be described as the move to a “software economy” where physical goods are less important than intellectual property, but that is by itself clearly just an evolution. Manufactured items will be with us forever, even as they have to respond to changing perceptions of value by consumers.

That the concept of a Fourth Industrial Revolution is a product of the World Economic Forum is not a mystery at all. This is, after all, the leading think-tank on globalism and how markets are changing around the world. What is fascinating, however, is how little time is spent defining the process in terms of Market Globalism as a replacement for Industrial Nationalism.

As always, Market Globalism is assumed but never studied. It is seen as such a universal positive that it should be taken on faith.

The stated goal of Industry 4.0, if there can even reasonably be such a thing, is for a world that is more human centered. That’s good in and of itself, but the primary assumption of Market Globalism as well as the primary assumption about Market Globalism is the chilling part. Populist waves washing over the developed world question or even dismiss the basic underpinning of everything as nothing but a tool of oppressors.

You say you want a revolution? Well, you know.

At some point you have to ask, “Who are the robots really working for?”

The shift away from Industrial Nationalism to Market Globalism is not something which can be turned back. In that sense, it is a revolution. But defining it entirely in terms of the previous systems is not a way forward. And it certainly has to involve the very people that it proclaims to be all about helping. The Fourth Industrial Revolution is definitely real and definitely a turning point that can be described and distinguished. It will be forced to meet its stated goals of making life better for everyone, too.

But there are some dark flaws hidden deep in the assumptions about all of this which make it much more difficult, at least in this moment. Those have to be addressed. The best way to start is by starting with the real revolution, globalism, and an understanding of how market forces underpinning absolutely everything is a very sharp double edged sword that in the wrong hands can easily swing the wrong way.

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4 thoughts on “Industry 4.0

  1. I read this 3 times. My only issue is that you don’t make the case why market globalism has to be explained. Its all about democracy and that’s what is missing in everything.

  2. Pingback: Equity & Debt | Barataria - The work of Erik Hare

  3. Pingback: The Disconnect | Barataria - The work of Erik Hare

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