Industry 5.0: What is it and what does its future hold?
As Industry 5.0 becomes a more popular topic of conversation in the business tech world, critics have come out to question its legitimacy as a revolution instead of a progression
At the EIT Grow Digital event in Brussels in June, Sean O’Reagain, the deputy head of Industry 5.0 for the European Commission’s Directorate General for Research and Innovation, was tasked with trying to find a way to explain Industry 5.0 in simple terms. You could almost smell the scepticism in the room. Is this another one of those throwaway bits of jargon that typically resonate with management consultants and marketeers? And what happened to Industry 4.0?
“What industry has told us is that they need to be much more effective in bringing together the greater speed and accuracy of digital technologies and the potential of workers,” said O’Reagain. “Also, the evidence from a lot of academic research was showing that those companies that were being most innovative were the ones that were able to capitalise on digital technologies to increase the creativity of the workforce and stimulate innovation.”
So, this isn’t particularly new. To be fair, neither is the idea of Industry 5.0. The EU says that Industry 5.0 “recognises the power of industry to achieve societal goals by making production respect the boundaries of our planet and placing the wellbeing of the industry worker at the centre of the production process.” Again, a little vague.
5.0 or 4.0?
The Industry 5.0 term was coined in 2015 by logistics pundit Michael Rada who based his idea around the reduction of waste in manufacturing (time and materials) and the recognition of virtual technologies impacting the working world. Almost certainly industry is having to think about how technology and humans interact, especially around augmentation and virtual reality and the role of artificial intelligence (AI).
It’s important, says O’Reagain, to see workers “as an investment rather than a cost for the company,” and use digital technologies “to empower them and make them agents of change to drive innovation in the company.”
This doesn’t actually feel very different from Industry 4.0. But it is inferring that what went before did not consider the human element and that it was not really capable of embracing new technologies and ways of thinking, as if it was somehow a physical thing tied to a chair. The reality is that many manufacturers have been innovative, often leading the way in automation and virtual tools. You only have to think of advances in digital twins, 3D printing and machine automation (including predictive maintenance) to realise how manufacturing is changing.
We all want more sustainable manufacturing, but saying so doesn’t make it a revolution
Paul Miller, Forrester
O’Reagain said that Industry 5.0 is not a chronological upgrade to 4.0 (sack the marketing team) but a reflection of how the working world is changing. He argued that in an increasingly competitive labour market, manufacturing is becoming less attractive due to its focus on efficiencies and profitability and not on its wider societal and environmental impact.
“From my perspective Industry 5.0 is all marketing, and not particularly helpful,” says Paul Miller, vice-president and principal analyst on smart manufacturing at Forrester. “The individual goals attached to Industry 5.0, such as sustainability and human-centricity are, while worthy and difficult to argue against, much less obviously any kind of revolutionary jump forwards. We all want more sustainable manufacturing, but saying so doesn’t make it a revolution.”
Miller adds that of course there is a clear argument for putting people back at the centre of a conversation around manufacturing. He mentions Forrester’s Automation Triangle, a methodology for balancing software, robotics, and the human workforce as an example of why he thinks Industry 5.0 as a concept is already being done.
“There is no real technological advance being linked to Industry 5.0,” he says. “Instead, it’s apparently about using the technologies we already have in a better, smarter, and more sustainable way. I’d argue that the good Industry 4.0 projects – those celebrated as Industry 4.0 Lighthouse Factories by the World Economic Forum, for example – are wonderful examples of sustainable and human-centric manufacturing. They’re not doing Industry 5.0. They’re just doing Industry 4.0 intelligently.”
Technology advances human thinking
For tech leaders it’s interesting in that the ideas behind Industry 5.0, the environmental, social and governance (ESG) considerations and the integration of all aspects of manufacturing, are technology driven. Data management in manufacturing, as in all industries, is an increasing necessity. Today, where is this more obvious than in the development of digital twins?
As a Capgemini report last year found, “Digital twins can help organisations to better utilise resources, reduce carbon emissions, optimise supply and transportation networks, as well as increase employee safety.” In fact, the report claims that 60% of organisations across major sectors see digital twins as a catalyst to not only improve operational performance, but also to fulfil their sustainability agenda.
Then there is the use of digital twin technology to radically rethink spaces and how people interact with technology. You only have to look at what Vrame Consult, with Bentley Systems’ iTwin digital twin technology, is doing at Siemens’ Siemensstadt Square in Berlin to realise that the ideas and ideals of Industry 5.0 are already in play.
Siemensstadt Square is a 25-year sustainable smart urban development project that is planning to transform more than 70 hectares of brownfield area into a modern, carbon-neutral campus, including approximately 100 new, low-emission buildings and cutting-edge mobility concepts.
Back in Brussels O’Reagain had said that Industry 5.0 is about “using digital technologies to identify ways of doing more with less by developing full product lifecycle processes and focusing on the way in which technologies can be used in a dynamic and flexible way, in order to make companies more resilient.”
Again, Vrame Consult would argue this is exactly what they are trying to do with Siemensstadt Square. In all fairness, this is an advanced project using leading-edge technologies, with complete buy-in from all parties. For many organisations, still grappling with which cloud strategy to adopt, it will look like another world. But what can be learned here? How can the concepts of a more human-centric, sustainable, tech-driven idea benefit businesses, as well as wider industries?
Accelerating transformation
“Making hardware smart, equipping machines with sensors, connecting them to the internet of things, and using artificial intelligence to make them intelligent is the basis for industrial digitalisation,” says Peter Korte, chief technology officer and chief strategy officer at Siemens. “Yet the best solution becomes a bad solution if it does not work well together with other technologies.”
That is the key point - interoperability, with cloud-based platforms that eliminate data silos and connect systems driving agility, scalability, and opportunity. But it’s not that simple. The cloud can be complex, as we know. Multi-hybrid cloud strategies can challenge data management. As the Cloud Industry Forum’s 2023 cloud research also revealed, only half of surveyed executives believe that adopting the cloud had made a significant impact in terms of transformation and business effectiveness. The conclusion was that this is still a work in progress. Adoption is high but implementation is evolving, as are migrations to cloud-first applications.
The point is that industry has to prioritise. While cloud strategies have to come first (Gartner even suggests industry specific clouds are the way to go this and next year), so many businesses are still firefighting against economic issues such as inflation. Accelerating transformations does not seem high on the agenda and yet it is through that acceleration that organisations are more likely to find opportunities and efficiencies.
“Today, the question isn’t whether you’re going to move to the cloud but how you’ll do it and how fast,” says Suneet Dua, partner, products and technology chief revenue and growth officer at PwC. “It’s a great point. The cloud is underpinning everything and enabling advances in leading technologies, such as digital twins, and even thinking around how to engage and enable a modern workforce. It’s all connected, whether it’s technology or human and that is where Industry 5.0 wants to sit.”
However, if anything, the Industry 5.0 moniker is a little misleading, as it suggests it is another industrial revolution, such as 4.0. As Forrester's Miller says, the problem with this idea is that Industry 5.0 doesn’t have a unique technology advance to pin this on, as most of the tech has already been covered by 4.0.
“I absolutely want, support, and work to help our clients achieve all of the goals attributed to Industry 5.0 – sustainability, human centricity, and the rest,” says Miller. “Giving it a new name, and pretending it’s yet another revolution, diminishes the value of everything that went before, and risks making the very real benefits we’re all working towards risk looking like we’re just chasing the latest buzzword.”
In fact, it shouldn’t matter if organisations are pursuing these ideas and ideals - interoperability, reduced waste, less carbon, better use of time, an engaged and engaging, diverse and digital workforce. O’Reagain’s point is simple: The Industry 5.0 framework is for those that don’t get it, or don’t know what to do. It’s merely a way of packaging the modern-day challenges of industry into a digestible format, maybe with a view to regulate on certain aspects in future. And that is a whole different ball game.
