Industry 5.0 Puts People at the Heart of Digitalization

Industry 4.0 is a neat term that encapsulates many aspects of the digital transformation of industries. It has come to be associated primarily with manufacturing, but it applies to many other sectors, and leans on technologies including the Internet of things (IoT), cloud and edge computing, software-defined systems, digital twins, analytics and machine learning.

The main thrust of Industry 4.0 is about gathering data on as many aspects of the system as possible and using it to automate and optimize production. In other words, it’s all about the hard metrics of efficiency and productivity.

The core vision is seen clearly in “lights-out manufacturing”, where there’s so much automation — in the handling of materials, the manufacturing process itself, the continuous calibration of the machinery and the maintenance — that the whole plant can run 24/7 in the dark because it doesn’t normally need human intervention. The benefits are lower operating costs, lower downtime, higher yield, higher consistency, higher productivity, smaller sites, less waste and a lower carbon footprint.

This vision is starting to take shape in manufacturing, with lights-out factories being run by Fanuc in Japan where robots are used to build robots, by Foxconn with a smartphone factory in China, by Philips in the Netherlands for electric razors, and by Rolls Royce in the UK for jet engine turbine blades. Beyond manufacturing, we’re starting to see this level of automation in ports, mines and warehouses as more sectors embrace the same principles.

As a thought experiment, imagine if Industry 4.0 had been so stunningly successful that all factories, warehouses and other relevant facilities were fully automated like this. They’d be humming along quietly in the dark, producing optimal goods, with the processes and logistics operating at peak efficiency. Which would be great… until something major changed.

That something could be a pandemic, a supply chain disruption, a shortage of materials or a huge price rise — all events that industrial players have faced in the past couple of years.

When a big change like that happens, a fully automated system can’t adapt as much as it needs to, so we call on expert humans to cope with the need for new materials, the use of new processes and the innovation to introduce new versions of products.

Industry 4.0 on its own is clearly not enough. What we need is Industry 5.0.

At IoT Solutions World Congress earlier in 2023, I discussed this with Sean O’Reagain, deputy head of the European Commission’s Industry 5.0 initiative, who gave an update on how this is progressing in the EU.

The first point he made about Industry 5.0 is that it’s not a revolution, but complementary to Industry 4.0 in that it puts workers centre stage in the digitalization process, and explicitly addresses two societal goals: sustainability and resilience.

With sustainability high on the global agenda, factories and industrial processes will need to do more with less, so efficiency is clearly important — as is innovation and finding new ways to do things using significantly fewer resources. The emphasis on resilience is partly geopolitical, with energy independence, security of raw materials and supply chain adaptability as major concerns, and partly linked to sustainability. With a human-centric view, industrial players should see workers as an investment area, because it’s only through them that the innovations we need will come about.

Because Industry 4.0 centres on efficiency and productivity, it tends to reinforce the finance community’s focus on companies’ quarterly performance. By contrast, Industry 5.0’s focus on worker skills would typically bear fruit over a longer period and, Mr O’Reagain suggests, should be seen as a three- to five-year rolling investment programme that covers all stakeholders, not just shareholders. Although there’s something of a mismatch in the focus of the finance community, interest is growing there: for example, digital industry venture capital specialist, Momenta, now has an Industry 5.0 fund.

Momentum is also building, and more rapidly, in other areas. Mr O’Reagain pointed out that about a year ago, the EU’s efforts toward Industry 5.0 started to shift from defining the concept to encouraging adoption. Different industry players are taking the lead, starting with manufacturers and broadening out to companies in medical technology, pharmaceuticals and retail. The interest seen through services such as Google Scholar is running at a higher rate for Industry 5.0 than it did for Industry 4.0 at a similar point in its development.

There’s also an awards contest run by the European Commission in collaboration with European Factories of the Future Research Association, or EFFRA, and industrial platform ManuFuture. The first awards contest ran in early 2022, recognizing EU-funded projects that make the region’s industry more resilient, sustainable and human-centric. The three awards finalists highlighted below are good illustrations of the principles of Industry 5.0.

  • The Ramp-PV project upcycles key raw materials including silicon and silver from industrially generated photo-voltaic waste. This helps the environment and reduces European reliance on supply from other countries. By adapting technology to the workers, the approach minimizes health-related risks from the materials and reduces training time.
  • The Secure Collaborative Intelligent Industrial Assets, better known as SeCollA, project sets out to secure the digital transition of manufacturing as its systems expand to include industrial IoT and collaboration across the supply chain, both of which create a larger attack surface. It also explores the challenges of security assurance, especially to ensure that interactions between humans and robots are safe and secure as industrial systems increasingly use machine learning for decision-making. This is fraught with technical challenges as well as legal challenges in accountability and law enforcement.
  • The Sherlock project focusses on manufacturing, where flexibility depends on combining the capabilities of humans and robots. The operators’ well-being hasn’t had much focus in the past, so the project aims to develop flexible and safe robotic applications for workplaces where humans and robots work alongside each other. It also introduces robotic technologies such as collaborative robots, known as cobots, and exoskeletons to boost human capabilities.

In fairness, companies that have implemented Industry 4.0 knew that the move wasn’t just about efficiency, productivity and full automation. Most of them recognized that keeping a highly skilled workforce is vital and many had set up training programmes for this.

Most, however, had not explicitly expanded the scope of their work to encompass sustainability and resilience as part of the same initiative. This highlights the need for formalizing those aspects, and wrapping them into the broader banner of Industry 5.0 is a good way to do that. Driving Industry 5.0 is a massive task spanning all countries and many sectors — it will clearly benefit from having the weight of the European Commission behind it.

Mr O’Reagain summed this up: “Digitalization is clearly essential for competitiveness and can certainly help company performance. To capitalize on it fully, however, we need to look beyond the factory floor and realize how it can also benefit our economy and society in multiple ways. This is why the European Commission is playing a central role in building momentum for the take-up of Industry 5.0”.