Home > Digital Development > Industry 4.0 to Digital Industrialisation: When Digital Technologies meet Industrial Transformation

Industry 4.0 to Digital Industrialisation: When Digital Technologies meet Industrial Transformation

As digital technologies increasingly permeate all aspects of our physical world, many believe that we are moving into a hyper-connected, intelligent society and economy. One of the emerging concepts underpinning this potential transformation is the Fourth Industrial Revolution, or Industry 4.0.

What is Industry 4.0?

According to the proponents of Industry 4.0, each industrial revolution has shifted manufacturing opportunities and patterns of specialisation, enabled by key technological developments as illustrated in Figure 1.

industry 4.0 timeline2

Figure 1. Industry 4.0 trajectory (source: Author based on [1] and [2])

The vision of Industry 4.0 includes digitalising all elements of industrial activities to achieve a highly flexible, distributed production and service network. Through advancements of technologies such as Artificial Intelligence (AI), advanced automation and robotics, 3D printing, big data and Internet of Things, a tighter integration of digital and physical elements will allow machine-to-machine interactions and a mode of operation that provides more efficient production. In an absolute Industry 4.0 world, every object and all machinery in the factory will be interconnected to share data and operate without much human presence [2].

This of course, is only viable when an advanced level of technological, social and economic integration occurs. Given that technologies progress at an unpredictable rate, and that their real-world applications often lead to unexpected outcomes, it is difficult to know how (or whether) industry 4.0 will manifest. Nevertheless, recent studies warn us that this industrial change can drive uneven global development even further.

Shifting focus from manufacturing to “digital industrialisation”

AI and robotics may take 800 million jobs by 2030 in the world, and emerging economies such as China and India could be hit the hardest, losing 236 and 120 million jobs by 2030 respectively [3]. The costs of operating robots and 3D printers in furniture manufacturing in the US is predicted to be cheaper than Kenyan wages in 2033 [4], indicating that the lower labour cost may no longer be the main attribute ensuring competitiveness in a global market.

Given that industrialisation has long been considered to play a vital role in economic growth of developing countries, the development implications of this transformation have been mainly discussed in manufacturing, albeit with a negative perspective: changing patterns and geography of production [2] (such as re-shoring manufacturing back to high-income countries) and technological unemployment in labour-intensive manufacturing industry [4].

However, I would like to bring more attention to the development of the “digital” side of this industrial transformation – which I will refer to as digital industrialisation. This is a work-in-progress concept that encompasses not only the technological integration of digital technologies into manufacturing, but also the extensive re-organisation of an economy to digitalise production processes.

Some work on this has already been carried out within the DIODE (Development Implications of Digital Economies) network [5], but we need more research to build a better picture of the current and future landscape: for example, how digital industrialisation can take place in small-scale, localised production networks in the global South [6] and how the economic models emerging within the digital economy (such as platform economy and gig economy) may impact innovation and manufacturing processes globally [7].

I will further argue that this impending industrial transformation is best understood as a continuous process rather than a goal to reach – something that terms such as industry 4.0 tend to project. Rather than focusing on the potential winners and losers in this race, we need to elucidate how this transformation can take place in an inclusive and sustainable manner.


[1] Lasi, H., Fettke, P., Kemper, H. G., Feld, T. and Hoffmann, M. (2014) ‘Industry 4.0.’ Business and Information Systems Engineering, 6(4), pp. 239–242.

[2] Hallward-Driemeier, M. and Nayyar, G. (2018) Trouble in the making? The future of Manufacturing-led development. Washington, DC: The World Bank.

[3] Manyika, J., Lund, S., Chui, M., Bughin, J., Woetzel, J., Batra, P., Ko, R., Sanghvi, S., (2017) Jobs lost, jobs gained: Workforce transitions in a time of automation. McKinsey Global Institute.

[4] Banga, K. and te Velde, D. (2018) Digitalisation and the future of manufacturing in Africa. London: Overseas Development Institute.

[5] Bukht, R. and Heeks, R. (2017) Defining, conceptualising and measuring the digital economy. GDI Development Informatics Working Paper 68. Centre for Development Informatics, University of Manchester, UK.

[6] Seo-Zindy, R., & Heeks, R. (2017) ‘Researching the emergence of 3D printing, makerspaces, hackerspaces and fablabs in the global south: A scoping review and research agenda on digital innovation and fabrication networks‘, Electronic Journal of Information Systems in Developing Countries, 80(1), pp. 1–24.

[7] UNCTAD (2017) The ‘new’ digital economy and development, UNCTAD Technical Notes on ICT for Development no.8. Geneva: United Nations Conference on Trade And Development.

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