Impacts of the Transformation to Industry 4.0 in the Manufacturing Sector: The Case of the U.S.

Abstract

Background and purpose: The transformation to Industry 4.0 increases the number of robots installed within industries, which brings great shifts in industrial ecosystems. For this reason, our research goal was to analyze the key performance indicators to investigate the economic and social sustainability of the changes in production.Methodology: The combination of official (World Bank, U.S. Bureau of Labor Statistics) and publicly available (Federal Reserve Economic Data, Industrial Federation of Robotics) data was used for statistical data processing, including comparison, correlation, cross-correlation and vector autoregression analysis, to present the past developments and also to predict future trends within the U.S. manufacturing sector.Results: In contrast to robust industry robotization observed in the 2008–2018 period, the share of manufacturing output and employment declined. Nonetheless, the vector autoregression model forecast shows, that the U.S. manufacturing sector has arrived at a turning point, after which robotization can increase employment and labor productivity of workers, while also stimulating further growth of their education levels.Conclusion: The transition to Industry 4.0 has a major impact on increasing demands for new knowledge and skills for increased productivity. Accordingly, forecasted growths of analyzed manufacturing indicators suggest that negative impacts of robotization in the recent past were only temporary, due to the entrance to the Industry 4.0 era. Nonetheless, additional policies to support sustainable industry development are required.

Industry 4.0 and Its Implications: Concept, Opportunities, and Future Directions

“…As a result, anticipated growths of assessed manufacturing indicators imply that the negative effects of robotization in the recent past were only transient, as the Industry 4.0 age has begun. Nonetheless, further policies are needed to enable long-term industry development [37].…”

“…Products will become increasingly modular and configurable, allowing for mass customization to match individual consumer needs [35]. As a result, Industry 4.0 is defined by the emergence of new products and services as embedded systems that can become attentive and interactive, be managed, and tracked in real-time, optimize the entire value chain, and provide pertinent information about their status throughout their lifecycle [37].…”

“…Some academics anticipate that Industry 4.0 would lead to new economic forms in the industry, agriculture, and services [3]. The majority of businesses expect a two-year payback on their Industry 4.0 investments, which leads to a considerable rise in investment in this area is likely, it's reflected in economic growth [37].…”

“…On the other hand, some experts believe that Industry 4.0 will result in increased inequality due to its threat of disrupting labor markets. It is argued that the continuous growth in automation, robots, and computers will take the jobs of workers in many industries with the most worrying factor being the increased danger of the disappearance of low-skill/low-pay jobs which will cause a lot of challenges for the poor, which will lead to a rise in social tensions [37]. The most concerning fact in Industry 4.0 is that it is not only the transfer of labor from one sector of the economy to another but also the availability of technology that will replace human capital, in other words, taking people's jobs.…”

Global Changes and Disruptions in Supply Chains—Preliminary Research to Sustainable Resilience of Supply Chains

“…• Dynamic development of production technology and organization, commonly known as the "fourth industrial revolution" or Industry 4.0 [4][5][6][7]; Industry 4.0 affects people, who need to develop their skills to meet high-tech requirements [8], organizations, that need to change their technologies [9], and economies, which need to adapt their business models to changing processes [10]. The impact is on cost, productivity, and performance [11,12], hence it affects the supply chains on a global scale; Industry 4.0 technologies can enable firms to mitigate the risk of disruption so that they can continue their operations [13].…”