After publishing the first post on the transition from Industry 4.0 to 5.0 I received this interesting comment:
There is a Sustainability reason behind the shift from industry 4.0 to industry 5.0. We need to put again humans at the center of the equation. Industry 4.0 is an intensification on the Unsustainable Industrial production paradigm (machines at the center) with Iot and AI we can enter in a sustainable post-industrial production paradigm based on an outcome economy (human at the center). Shifting from ownership of things to the performance of things. More profits for companies, more wellness for people and no damages to the environment (to spaceship Earth).
As you might have seen I addressed part of the “sustainability” reason in the second post. However I feel that this comment requires a more specific discussion.
Sustainability addresses a variety of issues, from the focus on the wellbeing of people, and workers in particular, to the attention to resources (both in terms of consumption and in terms of waste/pollution). It also underlines the need for economic sustainability, although this is often in the backstage because it is taken as a given. No solution that is economically unsustainable can be pursued in the long term. we need to take this into account any time we talk about sustainability focussing on societal, environmental aspects.
At the same time, economic sustainability is not just an industry (company) issue. It is a systemwide (Country, Planet) global issue. An industrial production paradigm based on renewable sources of power may be economically unsustainable at a company level (because the cost of power would make the product price non competitive on the market – you won’t be able to sell it, or to generate a revenue), but it can become sustainable if a Government action sustains the use of renewable by lowering their price (like through tax-exemption) or by imposing to all business in a given market to use renewables, thus levelling the market rules.
As previously noticed, the market itself can direct industry towards environmental sustainability by choosing not to buy from companies that are not attentive to environmental issues, and be willing to pay more for products that are environmental friendly. However this market influence is not as strong as the “imposed” Government influence. There are surely plenty of customers that are environmental sensitive to the point of paying more to walk the talk, but the majority is most likely to go for a lower price (a recent article providing a quantitative analyses on the action taken by air passengers to offset carbon emission by voluntary paying a bit more on their ticket showed ZERO voluntary payment!). We should always keep in mind the difference between the declaration that “Yes, I am all for being environmental friendly” and the actual implementation of that statement.
Let’s not fool ourselves. If what stated in the comment is right (More profits for companies, more wellness for people and no damages to the environment) there should be no need to having a Government intervention, actually there would be no need for Industry 5.0 since all companies, driven by their search for profit, would be implementing Industry 4.0 with all the characteristics of societal and environmental friendly pursued by Industry 5.0.
The reality is that pursuing these goals is a cost to industry, a cost that is more than offset by societal and environmental advantages but that has to be paid one way or another. Industries are willing to pay for that, as long as the added cost is not making their portfolio economically unsustainable. Hence the need to step out from the industry “box” and take a system wide view.
Just to be clear, I am all in favor of a shift to Industry 5.0 pursuing the societal and environmental objectives. I am just saying that the shift requires effort and energy that will not spontaneously come from industry. The graphics showing the frequency of word recurrence in articles on Industry 5.0, has sustainability as one of them but surely not the most recurring ones.
Also notice that Industry 4.0 is fully based on exploiting IoT and AI, thus it is not the exploitation of these technologies that enables, per se, the shift to Industry 5.0.
I’ll try to address the technology side in my next post.