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Industry 4.0 transformation reaches communications inflection point

Survey finds huge potential for investment in advance 4G and 5G technology among industrial organisations

A study from communications equipment giant Nokia and analyst ABI Research has found massive potential for investment in advance 4G and 5G technology among industrial organisations aiming to evolve their operations.

Nokia partnered with ABI to assess investment strategies from manufacturing decision-makers related to 4G/LTE, 5G and Industry 4.0. The study took data from 602 respondents with various decision-making job roles across the automotive (201), consumer goods (201) and machinery (200) markets. Respondents were from the US (161), Germany (100), Japan (100), China (40), India (40), Australia (40), the UK (41), Canada (40) and France (40).

It should be noted that the survey was completed at the end of 2019, before the onset of the Covid-19 pandemic.

The research examined near-term drivers influencing buying decisions for new industrial systems across IT and OT (operations technology). IT drivers were primarily focused on reducing downtime (53%), improving operations efficiency (42%) and enhancing security (36%). OT drivers reflected a desire to replace ageing infrastructure (43%), improve efficiency (40%) and increase capacity (38%).

Leading priority buying areas were automation and machine upgrades (47%), IIoT initiatives (41%) and cloud infrastructure (37%). Some 88% of respondents said they were familiar with private wireless (4G/5G) networking.

Nearly three-quarters of the manufacturing decision-makers surveyed said they planned to upgrade their communications and control networks by the end of 2022 to advance digital transformation and Industry 4.0 and more than 90% were investigating the use of 4G and/or 5G networks for their operations.

Of those considering 4G and/or 5G, 84% said they would deploy their own local private wireless network in their manufacturing operations. Just over half of respondents (52%) believed that the latest generation of 4G/LTE and 5G would be needed to meet their transformational goals.

Crucially, the research found that the communications networks would not be technology looking for applications and that use cases had been envisaged by the sample. Among the key business use cases that would drive investment in 4G or 5G, respondents reflected the need to digitise and improve existing infrastructure (63%), automation with robotics (51%) and achieve new levels of employee productivity (42%).

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Manish Gulyani, vice-president marketing at Nokia Enterprise, said Industry 4.0 transformation had reached an inflection point as the fast, secure, low-latency connectivity underpinning its implementation becomes available. “This research indicates the strong marketplace appetite for industrial-grade wireless networking to capture the transformational benefits of digitisation and automation,” he said. “We believe that demand, combined with easy-to-deploy private wireless solutions, will drive adoption.”

ABI Research principal analyst Ryan Martin added: “Importantly, research findings indicate a preference for deploying private fully-owned and operated​ wireless networks, with manufacturers favouring in-house management to allay security concerns​. It is evident that respondents are not entirely committed to Wi-Fi/WLAN and will consider latest generations of wireless technologies. As a result, 2020 is a critical year for networking suppliers to educate the market regarding the merits of 4G/LTE and 5G.

“We also observe a pan-industry need to quantify not only the potential ROI of investing in private wireless, but also to clearly indicate the cost of inaction – vendors need to make the case for investing in Industry 4.0 today to gain a clear competitive advantage over those who choose to wait.”

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