Emerging Trends | ICT4SDG | Infrastructure | SDG9
June 14, 2017

How ICT infrastructure is crucial to achieving the SDGs in the era of the fourth industrial revolution

By LI Yong

We are currently experiencing the onset of the fourth industrial revolution, which is significantly different from the ones that preceded it. The first industrial revolution was triggered by water and steam, the second industrial revolution was built on electric power, and the third depended on electronics and information technology.

By contrast, the fourth industrial revolution — which is also referred to as Industry 4.0 — is more complex and is characterized by a trend of automation and data exchange in manufacturing technologies. Information and communication technologies (ICTs) are an important driver and are essential for the fourth industrial revolution to be fully realized.

In many developed countries, Industry 4.0 and the use of ICTs are already quite advanced. Companies are applying innovative solutions, for instance through the Internet of Things, cloud computing, miniaturization and 3D printing. These solutions enable better interoperability, more flexible industrial processes, and autonomous and intelligent manufacturing. Further, the physical components of industrial production are being transformed into cyber-physical systems by smart, digital networking, allowing for real-time management of production processes across great distances and products.

Government response

Governments in several more advanced countries have launched medium and long-term strategies to respond to these trends. For example, the German government has institutionalized its commitment to Industry 4.0 by setting up a platform, which brings together representatives from business, science and trade unions in five working groups. Mexico’s Ministry of Economy has also developed a national roadmap for Industry 4.0, which outlines opportunities and challenges, and lists steps for action.

Similar progress at the policy level can be observed elsewhere, including the European Commission’s Digitising European Industry strategy, Russia’s National Technology Initiative, and Japan’s New Robot Strategy.

Opportunities for developing countries

The fourth industrial revolution also brings important opportunities for less-advanced developing countries. Improved manufacturing processes can lead to more sustainable production and consumption patterns, thereby contributing to the implementation of the 2030 Agenda for Sustainable Development and the achievement of the Sustainable Development Goals (SDGs). This concerns, in particular, Goal 9 — Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation — which is central to our work at the United Nations Industrial Development Organization (UNIDO). Moreover, developing countries can benefit from the experiences of more advanced countries at the business and policy level, and leapfrog into Industry 4.0. Retrofitting manufacturing equipment provides an opportunity for developing countries to achieve sustainable manufacturing at a low cost.

An important step towards the full implementation of Industry 4.0 is digitalization. Digitalization makes the global flow of information cheaper and easier. Digital technologies can also improve productivity and competitiveness, as well as enhance resource and energy efficiency, thereby creating new business and employment opportunities while protecting the environment.

Digitalization, e-commerce and online marketing can help small and medium-sized enterprises overcome logistical and geographical challenges and improve their access to markets.

“UNIDO stands ready to work with international fora, governments, and businesses to … realize the potential that Industry 4.0 and ICTs have for the achievement of the SDGs.”

The potential impact of digitalization could also contribute to the transition to a circular economy — one in which resources are kept in use for as long as possible through reuse, remanufacturing, and recycling.

Overcoming the challenges of digitalization

It is clear that the integration of digital technologies puts pressure on businesses and governments to adjust business models and regulatory frameworks. Other challenges that need to be faced include a lack of data, inadequate skill sets, a lack of physical and digital infrastructure, and limited connectivity. This is especially true in developing countries and economies in transition.

Several steps need to be taken at the policy and business level in order to respond to these challenges, and boost the kind of inclusive and sustainable industrial activity that leads to higher employment and economic growth.

These include the following:

  • Reliable physical and digital infrastructure needs to be made widely accessible. At the moment 3.9 billion people — which corresponds to slightly more than half of the world population — have no or minimal access to the internet. The huge digital divide between developed and developing regions needs to be addressed in order to reap the full benefits of Industry 4.0.
  • Both small and large enterprises need to find new, creative ways of organizing traditional manufacturing processes. They need to move from a “centralized” to a more “decentralized” production, in which a product might use intelligent machinery to communicate what needs to be done, instead of simply being “processed”.
  • The ICT infrastructure requires new skill sets, for instance in mechatronics, digital medicine, precision agriculture, robot design, and smart grid design, as well as management. These skill sets cannot be created overnight, and require changes in education and vocational training.
  • Businesses and governments need to adapt to a new reality, in which workers collaborate and coexist with machines (co-bots), and in which new industry sectors, such as digital medicine and precision agriculture, emerge.
  • Agreement on new standards for the exchange of data pertaining to Industry 4.0 need to be found. These will likely be demanded by consumers and other stakeholders and might be related to the exchange and storage of big data, security and privacy, as well as to ethics guiding the relation between machinery and the work force.

UNIDO stands ready to work with international fora, governments, and businesses to overcome these challenges and realize the potential that Industry 4.0 and ICTs have for the achievement of the SDGs. UNIDO and ITU recently made a commitment to strengthen collaboration in the areas of Industry 4.0, digital transformation and broadband infrastructure, capacity building, and the development of new international ICT standards in order to connect the unconnected, and to enable people worldwide to reap the benefits of the fourth industrial revolution.

LI Yong
Director General of the United Nations Industrial Development Organization (UNIDO)

For more thought leadership on how ICTs can speed progress on the SDGs, read the latest edition of ITU News Magazine.
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