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Industry 4.0: Is the East Really Advancing Ahead of the West?

Donna Lee
Product Marketing Analyst

The global race for innovation hasn’t looked like it’s going to be a close one of late. Recent figures from McKinsey show Europe spending only around $3bn-$4bn on AI technologies in 2016, compared to $6.2bn in Asia during the same amount of time. The EU is clearly worried about the region starting to lag behind, having last week announced a €9.2 billion investment into tech innovation, helping Europe catch-up with innovation hubs like China. But is Europe really falling as far behind in the innovation stakes as we all think?

When it comes to manufacturing, perhaps not. We conducted some research recently, looking at Industry 4.0 technology in the manufacturing sector – both to see how it’s being adopted, but also to see what gains manufacturers have made from their implementations so far. Overall, we found most manufacturers have already implemented some form of Industry 4.0 technology, but there are still many opportunities ahead to open up a digital thread across their entire value chain, to make better use of data and improve interactions with their customers.

But how did that boil down between the regions? We ran the research across the UK, France, Germany, the Netherlands and Switzerland – and then China and the UAE, specifically so we could see if there were any disparities in the findings between the continents – especially comparing the East to the West. And, surprisingly, we found the results to be pretty flat across the board – with Chinese and UAE manufacturers in just the same position as their European counterparts.

There were a few stats that showcased regional differences. Only half of manufacturers globally said they were using their customers’ data to help them inform the way new products were being designed. Though the UAE was leading the way in this respect, the number of manufacturers there using customer data in this way went up to 71 per cent. In fact, the UAE does appear to be leading the way in working closer with customers. While nearly two thirds of manufacturers in total said they were in a position to make sales more directly to customers (rather than through retail or distribution partners), that went up to 72% in the UAE but down to 47% in Germany.

When we looked at some of the benefits of deploying Industry 4.0 technologies, we found a third of manufacturers overall were starting to open up new routes to market for their products, but that this was actually higher in China (42%), compared with it being as low as 22% in France and 25% in Switzerland.

So, while there are a couple of instances of the East using Industry 4.0 technology in more advanced ways that the West, these are few and far between. So, maybe, although they still have a way to go to extend a digital thread across their value chain and truly derive innovation from Industry 4.0, European manufacturers can take heart that they’re not lagging so badly behind their Eastern counterparts in this arena after all.

For more information on Industry 4.0 and how Manufacturers can best embrace it, take a look at our page here - https://www.oracle.com/uk/applications/manufacturing.html

 

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