The Industry 4.0 Revolution for SMEs

The Industry 4.0 Revolution for SMEs

Most information about Industry 4.0 centres around use in large factories by large companies. In actual fact, the majority of companies in the World are small to medium in size.

For example, the United States Census Bureau says there’s 6,064,000 businesses in the USA and only 0.32% qualify as large businesses (2012). In the UK, the Office for National Statistics says 98.6% of manufacturers are SMEs (2018). There were 24.5 million SMEs in the European Union in 2017.

The top European countries with the largest manufacturing turnover are Germany, Italy, France, the United Kingdom and Spain. Improving productivity within these countries, particularly within their SMEs, could prove to be a critical factor in their future prosperity.

The main industry sectors are energy and utilities, automotive, chemicals, pharmaceuticals, transport and logistics, machinery equipment repair, food and retail. It’s sometimes not easy to classify an SME’s sector because most work is in creating sub-assemblies, components or ingredients across multiple sectors. When considering Industry 4.0, it’s not just operations and data transfer within SMEs that are important but inter-SME and to/from large companies, the so called value chain, that are just as important.

While there’s ambiguity as to what actually defines a company as being SME, it’s usually seen to be companies employing less than about 500 people. This is also the number at which it isn’t usually financially viable to seek the help of the top consultancies or large technology companies such as Siemens and General Electric.

A 2018 report by the UK KTN found that 60% of SMEs thought that SME business support and advice for Industry 4.0 was too fragmented with a lack of leadership to support diffusion of the new technologies:

“What SMEs want are opportunities to test out and get hands on with these new technologies to de-risk the process of adoption and enable them to decide for themselves which are the most appropriate for their businesses”

Most importantly they want to find a cost-effective way to integrate new technologies with legacy systems.

The Vodafone IoT Barometer 2019 showed that Industry 4.0 has the potential to have a greater affect on SMEs than larger companies. 57% of SMEs with less than 250 employees reported achieving significant benefits versus 49% for businesses with over 1000 employees. Why is this? Vodafone thinks that even the smallest of implementation can have a disproportionate major impact on a small business.

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