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Industry 4.0 Technologies for MSMEs

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August 26, 2021

What is the issue?

As MSMEs are expected to become the backbone of India there is a strong need to make them more efficient and competitive by adopting Industry 4.0 technologies.

What is Industry 4.0?

  • Industry 4.0/ 4th Industrial Revolution is the digital transformation of manufacturing/production, related industries, and value creation processes.
  • Refers to the intelligent networking of industrial machines and processes with the help of information and communication technology (ICT).
  • The technologies involved include -
    1. Additive manufacturing
    2. Internet of Things
    3. Cyber Physical Systems
    4. Augmented Reality/Virtual Reality
    5. Data analytics

The term ‘Industry 4.0’ was coined by German government in 2011. Other countries have specific terms for their own industrial initiatives. E.g., U.S. - Smart Manufacturing, China - Made in China 2025, and India - Make in India or Digital India.

What is the significance of MSMEs?

  • Form more than 95% of the industries in India
  • Produce more than 45% of the total manufacturing output
  • Employ more than 40% of the workforce
  • Contribute roughly 30% to the GDP and half of the country’s export
  • Support larger enterprises, leading to a seamless supply chain integration

How do Industry 4.0 technologies benefit MSMEs?

  • Make MSMEs more competitive by offering world-class quality products to customers.
  • Increase the level of efficiency and productivity.
  • Improve the delivery timings and the flexibility in meeting the different needs.
  • Promote innovation and revolutionise the production processes.

What are the challenges involved?

  • Lack of awareness regarding Industry 4.0 and its benefits 
  • Less scope for major financial investments to adopt Industry 4.0.
  • Lack of experts and consultants.
  • Absence of a positive organisational culture and the support of people.
  • Absence of frameworks and steps that assist MSMEs in adopting Industry 4.0 technologies like understanding of data.

What are the measures needed?

  • Promotion of investments in digital infrastructure and data.
  • Changes to curriculums (under National education systems) to meet the changing skill sets.
  • Identifying the relevant tools and practices in adopting new technology.
  • Promoting R&D in both public and private sectors to facilitate innovation.
  • Regulatory frameworks that encourage innovation, digitalisation and the adoption of new technologies while ensuring data protection
  • In all, government intervention in funding, infrastructure and human capital development is the need of the hour.


Source: The Hindu, Business Line

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