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It’s time for Industry 4.0


Industry 4.0 or the Fourth Industrial Revolution (4IR) is the ongoing automation of traditional manufacturing and industrial practices, using modern smart technology. There is an increased importance in exploring how the adoption of Industry 4.0 technologies can make MSMEs more efficient and competitive.


GS-III: Industry and Infrastructure (Industrial Growth, Industrial Revolution), GS-III: Indian Economy (Growth and Development of Indian Economy)

Mains Questions:

What is the ‘Fourth Industrial Revolution’ and how have arrived at it? Discuss the role that MSMEs in India can play in the Fourth Industrial Revolution. (10 marks)

Dimensions of the Article:

  1. Industrial Revolution I, II and III – Steam, Electricity and Digital
  2. History: What is ‘The Industrial Revolution’ (18th to 19th Century)?
  3. Fourth Industrial Revolution
  4. The potential of MSMEs in the 4th Industrial Revolution
  5. Challenges faced by MSMEs in the 4th Industrial Revolution

Industrial Revolution I, II and III – Steam, Electricity and Digital

Industrial Revolution I

  • The First Industrial Revolution was about coal, water and steam, bringing with it the steam engine and innovations that enabled the large scale manufacturing of goods and products, such as textiles.
  • Its impact on civilisation was immense. No longer centered around villages, farming and the local crafting of goods, people flocked to cities to work in factories under low wages and in terrible conditions.

Industrial Revolution II

  • The Second Industrial Revolution came about with the invention of electricity and enabled mass production (think production lines).
  • Dating from the late 1800s to early 1900s, from this phase emerged the internal combustion engine, and thus the automobile.
  • The period was marked with an increased use of steel and eventually petroleum, and the harnessing of electric current.
  • It allowed much of the progress of the first industrial revolution to move beyond cities and achieve scale across countries and continents.

Industrial Revolution III

  • The Third Industrial Revolution was all about computers. From the 1950s onwards, computers and digital systems enabled new ways of processing and sharing information.
  • Transistors, microprocessors, robotics and automation – not to mention the internet and mass communications – would eventually allow for the ultimate in scale: globalisation.

History: What is ‘The Industrial Revolution’ (18th to 19th Century)?

  • The Industrial Revolution, which took place from the 18th to 19th centuries, was a period during which predominantly agrarian, rural societies in Europe and America became industrial and urban.
  • Prior to the Industrial Revolution, which began in Britain in the late 1700s, manufacturing was often done in people’s homes, using hand tools or basic machines. However, these cottage industries were enormously labour intensive, with the merchants supplying the raw materials and collecting the finished goods later. The whole process was largely inefficient. The supply was erratic as the self- employed workers had to tend other works.
  • Industrialization marked a shift to powered, special-purpose machinery, factories and mass production. The iron and textile industries became the mainstay of industrial revolution. From cooking appliances to ships, all had components of iron and steel. The process went in hyper drive with the advent of steam engine and ships.
  • The industrial revolution took place in the rest of Europe after Britain. It was mainly inspired by the growth of technology, prosperity, and power of Britain. The base of the industrial revolution was dependent on local resources, political will and the socio-economic condition of each individual European country.
  • The industrial revolution spread in all corners of the British Empire and took roots in the United States in the 1860s, after the American Civil War (1861-65). This part of the revolution is called the Second Industrial Revolution. This changed America from an agrarian society to an industrial one.

Fourth Industrial Revolution

  • The Fourth Industrial Revolution (4IR or Industry 4.0) is the ongoing automation of traditional manufacturing and industrial practices, using modern smart technology. 
  • Large-scale machine-to-machine communication (M2M) and the internet of things (IoT) are integrated for increased automation, improved communication and self-monitoring, and production of smart machines that can analyze and diagnose issues without the need for human intervention.
  • There are four design principles identified as integral to Industry 4.0:
    1. Interconnection — the ability of machines, devices, sensors, and people to connect and communicate with each other via the Internet of things, or the internet of people (IoP).
    2. Information transparency — the transparency afforded by Industry 4.0 technology provides operators with comprehensive information to make decisions. Inter-connectivity allows operators to collect immense amounts of data and information from all points in the manufacturing process, identify key areas that can benefit from improvement to increase functionality.
    3. Technical assistance — the technological facility of systems to assist humans in decision-making and problem-solving, and the ability to help humans with difficult or unsafe tasks.
    4. Decentralized decisions — the ability of cyber physical systems to make decisions on their own and to perform their tasks as autonomously as possible. Only in the case of exceptions, interference, or conflicting goals, are tasks delegated to a higher level.
  • The Fourth Industrial Revolution consists of many components like Mobile devices, Internet of things (IoT) platforms, Location detection technologies, Augmented reality/ wearables, etc. Mainly these technologies can be summarized into four major components: 
    1. Cyber-physical systems
    2. Internet of things (IoT)
    3. On-demand availability of computer system resources
    4. Cognitive computing.

The potential of MSMEs in the 4th Industrial Revolution

  • Micro, Small and Medium Enterprises (MSMEs) are expected to become the backbone of India as the economy grows larger.
  • MSMEs form more than 95% of the industries in India.
  • They produce more than 45% of the total manufacturing output and employ more than 40% of the workforce.
  • According to the Economic Survey 2020-21, over 6 crore MSMEs employ more than 11 crore people and contribute roughly 30% to the GDP and half of the country’s export.
  • MSMEs are also ancillaries to larger enterprises, leading to a seamless supply chain integration.
  • As a result, making MSMEs more efficient will be advantageous for the whole economy.

Challenges faced by MSMEs in the 4th Industrial Revolution

  • MSMEs face challenges in adopting the new technologies of Industry 4.0.
  • They lack awareness regarding Industry 4.0 and its benefits.
  • While Industry 4.0 believes in improving the existing system, MSMEs consider such technologies to be disruptive.
  • MSMEs will need to make major financial investments to adopt Industry 4.0.
  • Investing in the right set of technologies will also need experts and consultants.
  • The frameworks and steps that can assist MSMEs in adopting Industry 4.0 technologies have been missing.

-Source: The Hindu

February 2024