In business, buzzwords are always in fresh supply. Every day, market experts come up with new and creative terms to describe new trends, products and services. People write books and articles about these trends and entrepreneurs scramble to create companies to exploit these new market conditions. The latest megatrend we have identified is Industry 4.0 or the Fourth Industrial Revolution.


For the uninitiated, the First Industrial Revolution was marked by the leap from hand production to machine-based manufacturing. The Second Industrial Revolution came with the development of assembly line mass production. The Third describes the introduction of computer and automation, and the Fourth involves the addition of robots monitored and controlled by computer-based algorithms.


During a recent business trip to China, I was surprised to find Chinese manufacturers very focused on converting their factories to the Industry 4.0 model, with some companies making large investments into these technologies. These forward-thinking companies are focused on advancing, not just surviving, during the recent market downturn. Other companies that insist on maintaining their low-cost labor business model are on a path of self-destruction.


As computers and robots become more sophisticated and intelligent, Industry 4.0 will continue to grow and become mainstream. As CEO of a company that is introducing robotic automation to the sewn products industry, I have identified the following five characteristics of a successful Industry 4.0 transformation:


  1. Software: Robotics and automation hardware have mostly become commoditized. Robots are being developed and deployed very inexpensively, but, much like the commoditization of desktop computing, it is all about advanced software, this includes computer vision, machine learning and work-cell controls.


  1. Cooperative Ecosystem: In the same way the supply chain automation movement was about connecting companies inventory and logistics data, Industry 4.0 is about creating a deeper connection between purchasing and manufacturing. This requires a cooperative platform that allows for massive connectivity via the cloud, and an alignment of business systems and cultures. Alignment of a truly innovative culture against business strategy is a non-negotiable.


  1. Collaborative Platform: Collaboration between companies is typically very expensive and risky. Industry 4.0 is very much about leveraging a common language and platform. However, like the Internet, the platform isn’t owned by any one company. In order to embrace Industry 4.0, companies will have to implement platforms that are scalable, flexible and cooperative. Otherwise, the ecosystem will falter at its weakest link… like driving down a superhighway and turning onto a dirt road.


  1. Joint Intellectual Property: The cooperative ecosystem will result in an industrial mashup of connected machines, and, in some cases, these collaborations will create new joint IP. The co-creation of new ventures to convert these ideas into great companies will create unique investment opportunities for large corporations and accelerate Industry 4.0.


  1. Commitment to Iteration: It is important to note that we are in the early stages of Industry 4.0, and these concepts and technologies are still maturing. Not every process will be automated on day 1. The formation of these complex ecosystems will require patience, ingenuity and a commitment to iteration and learning. There are no failures, only key learnings. Companies should understand the risks and benefits associated with these forward-thinking programs and budget their time and money accordingly.


Industry 4.0 is more than just the latest buzzword. It is an innovation that promises to change the way most products are manufactured in the coming years. As with every innovation, the key to the success of an Industry 4.0 transformation is proper planning and execution, along with capital, risk tolerance, and a commitment to collaboration and creativity.


Industry 4.0 is not the future. It is happening today, and I am thrilled to be part of it.