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The concept of Industry 4.0

Paper type: Essay
Pages: 8 (1841 words)
Categories: Cloud Computing, Computer, Event, History, Industrial Revolution, Industry, Technology
Downloads: 27
Views: 3


It is evident that in the concept of Industry 4.0 the pace and intensity of the development of new technologies are increasing. The impact of the transformation of new technologies is not only increasing in the field of strategic management, but also in all other spheres of modern business. Through that impact on creating unprecedented consumer habits and needs, or through the creation of brand new market segments, the need to change the strategic paradigm is created so the enterprises could adequately respond to modern business challenges.

Bearing in mind the above facts, the purpose of this paper is to analyze the implementation of new technology trends in some European countries and point out their impact on strategic management.

Keywords: Industry 4.0, new technologies, strategic management, European countries.


Since the beginning of industrialization, technological leaps have led to the crucial shifts that are called ”industrial revolutions”. It happened first in the field of mechanization (the first industrial revolution), then with the intensive use of electricity (the second industrial revolution) and widespread usage of information technology (the third industrial revolution).

Based on the ever-present process of advanced digitization within factories, a combination of Internet technologies and new technologies in the field of ”smart” objects, both machines and products, it can be noticed that the new change of paradigm in industrial production is beginning. In the vision of the future production, which is becoming clearer, integrated, modular and efficient production systems stand out [1]. Those production systems are characterized by the fact that the products are capable, to some extent, to control their own production process. Production systems designed in this way should be able to realize production in a series of one product as if they were mass-produced, while still holding on the economic benefits of mass production. In these expectations of the future of production and service systems, the term ”Industry 4.0” has been established to denote the forthcoming fourth industrial revolution [1].

The term called ”Industry 4.0” focuses on the development and vertical and horizontal integration of small and medium-sized technology-oriented organizations in the manufacturing sector. This concept ”aims to provide continuous and clear insight into all phases of production by applying Information and Communication Technologies (ICT) to vertically and horizontally import manufactures, and to enable product monitoring and improvement throughout product lifecycle” [2].

Peter Drucker, one of the most famous authors in the field of strategic management points out that the development of new technologies drastically affects the transformation of strategic management [3].

The transformational impact of new technologies on strategic management is fundamentally based on the growing importance and intensification of information gathering, especially: information on the rate of development and diffusion of new technology; the rate of substitution of one technology by a new technology (replacement of one technology and/or product by another); information on the frequency of technological innovation and the time required between the invention and its comercialization, all in order to anticipate and make optimal strategic decisions more successfully, with the purpose of achieving a sustainable competitive advantage [4].

Purpose of the research

The fourth industrial revolution presents a change in the industrial sector: everything evolves from a pre-planned and sequential process to an organizational, self-organized logistics system. Digital technologies such as the Internet of things (IoT), Robotics, Cloud Computing, Cyber-Physical Systems, and Big Data, are the key to implementing Industry 4.0. Industry 4.0 involves the complete digitalization of all production processes and the implementation of the aforementioned digital technologies when creating an idea of a product, product engineering, production organization, production realization, process control and the provision of industrial services. Industry 4.0, as the fourth industrial revolution, has already begun and is ongoing in many countries, and this ensures the survival of the industry and its competitive development in modern conditions.

Because of the faster, more intense and more frequent development and application of new technologies in all areas of business, but also the increasing transformational impact on change of paradigm of strategic management, as well as on the functioning of the global economy, many authors in the field of strategic management and the fields of new technology and information technology development point out that the world is currently in an era of high-tech or digital revolution. The high-tech or digital revolution is one of the most significant things happening to humanity and involves ”drastic changes caused by the rapid introduction, but also the replacement of new technologies.”[5].

Bearing in mind the above facts, the purpose of this paper is to analyze the implementation of new technology trends in some European countries and point out their impact on strategic management.

Results of the research

The graph in Fig. 1 shows the high and low estimates of the impact of Information and Communication Technologies (ICT) on industrial growth in some European countries, so it can be concluded that the largest incremental growth of GDP due to adoption and utilization of ICT, especially in industrial production, besides the other sectors [6].

Fig. 1. Percentage of the ICT sector in GDP in 2018 (Source: Eurostat database)

As can be seen in Fig. 1, the largest impact of the ICT sector on GDP growth in 2018 was in Malta, Hungary, and Bulgaria, while the least was in Greece, Lithuania, and Poland.

Another indicator of the economic progress of the countries is the total high-tech trade. The results presented in Table 1 show the value of imports and exports of high-tech in 2018. The values are expressed in millions of euros. It can be noted that the highest imports of high-tech were in Germany, the Netherlands, and the United Kingdom, while the lowest imports of high-tech were in Montenegro, Northern Macedonia, and Malta. The highest exports of high-tech were in Germany, Netherlands, and France, while the lowest exports of high-tech were in Northern Macedonia, Montenegro, and Serbia. Comparing the data presented in Fig. 1 and Table 1 it can be concluded that the total high-tech trade is not influenced by the impact of the ICT sector on GDP growth. This is especially noticeable in the examples of Malta and Germany.

Table 1. Total high-tech trade in 2018 (Source: Eurostat database)

Country Imports in mil. euro Export in mil. euro Country Imports in mil. euro Export in mil. euro
Belgium 39,63 40,59 Malta 795 654
Bulgaria 2,67 1,666 Netherlands 115,276 130,6
Czechia 31,464 30,556 Austria 22,645 21,529
Denmark 9,506 8,705 Poland 26,445 18,521
Germany 164,333 199,848 Portugal 6,751 2,31
Estonia 1,796 1,664 Romania 9,278 5,658
Ireland 33,186 48,491 Slovenia 2,575 2,168
Greece 4,249 1,504 Slovakia 11,367 7,674
Spain 29,431 16,15 Finland 7,357 3,904
France 77,384 100,776 Sweden 18,659 15,827
Croatia 2,066 1,185 United Kingdom 94,087 68,669
Italy 44,408 35,907 Montenegro 177 6.9
Latvia 2,46 1,489 North Macedonia 409 5.3
Lithuania 2,276 2,243 Serbia 1,645 8.2
Hungary 16,729 16,609 Turkey 15,195 9.5

Considering that the core of the Industry 4.0 concept is composed of several advanced digital technologies that largely initiate and enable the successful transformation of the existing business models, the percentage of total enterprises in some European countries that use Cloud Computing services and Big Data analysis is given in Table 2 and Fig. 2.

Cloud Computing is an infrastructure that can deliver great value because of its ability to deliver computing resources as a service. One of the most important features of Cloud Computing is scalability, and the key technology that enables it is virtualization [7]. As it is stated, Cloud Computing services are one of the keys to implementing Industry 4.0, so the participation of enterprises that use Cloud Computing services is very important task that will contribute to the successful transformation of their business models. As can be seen from Table 2 Finland, Sweden and Danmark are the countries that have the highest percentage of enterprises that bought Cloud Computing services in 2018, while Bulgaria, Turkey, and Poland had the lowest percentage of enterprises that use Cloud Computing services.

Table 2. Percentage of enterprises that bought Cloud Computing services in 2018 (Source: Eurostat database)

Country Cloud Computing services Country Cloud Computing services
Belgium 40 Malta 37
Bulgaria 8 Netherlands 48
Czechia 26 Austria 23
Denmark 56 Poland 11
Germany 22 Portugal 25
Estonia 34 Romania 10
Ireland 45 Slovenia 26
Greece 13 Slovakia 21
Spain 22 Finland 65
France 19 Sweden 57
Croatia 31 United Kingdom 42
Italy 23 Norway 51
Latvia 15 Montenegro 18
Lithuania 23 Serbia 15
Hungary 18 Turkey 10

Another digital technology that has been analyzed in this research is Big Data. ”It is an analytical model for processing large amounts of different formats of data, and transmits the focus of business focus, from product manufacturing to value delivery.”[2]. The diagram in Fig. 2 shows the percentage of enterprises in European countries that analyzed Big Data from any data source in 2018. The highest percentage of enterprises had Malta, Netherlands, Belgium and Ireland (24%, 22%, 20%, and 20%, respectively), while the lowest percentage of enterprises had Hungary, Austria, Bulgaria, and Italy (6%, 6%, 7%, and 7%, respectively).


”The enterprises that are the last to go through the application of the concept Industry 4.0 and through the digitization of all business processes will be the first to disappear from the business scene” [2]. The research presented in this paper has shown that economically developed European countries are significantly more successful in applying the concept of Industry 4.0 and new technology trends. All of the above indicates that the development and application of new technologies is one of the most significant generators of change in the modern economy, but also in the field of strategic management.


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The concept of Industry 4.0. (2019, Nov 22). Retrieved from https://studymoose.com/the-concept-of-industry-4-0-essay

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