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70% of Industry 4.0 Pilots Fail. A New Center Hopes to Change That.

June 14, 2023
The World Economic Forum chose Michigan for its US Center for Advanced Manufacturing.

The fourth industrial revolution is reshaping the manufacturing industry, bringing new opportunities and challenges for businesses to navigate.

But for Industry 4.0 technologies to be meaningful in manufacturing, businesses must work across the value chain to drive adoption and achieve faster, more sustainable change. That is not just a personal opinion but a determination of the World Economic Forum, one of the world’s leading authorities on the subject.

WEF is known for its thought leadership on Industry 4.0, bringing together business leaders, policymakers, subject matter experts and other stakeholders to discuss weighty issues, but its impact goes well beyond that. The organization recently selected Michigan for its first-ever U.S. Center for Advanced Manufacturing, which is led by Cynthia Hutchison. The U.S. Center is part of a global network of 4IR communities, but it's the first to focus on accelerating and strengthening advanced manufacturing.

The timing could not be better as the world grapples with industrial transformation and many jobs are at risk of becoming obsolete. The WEF has found that more than 70% of companies investing in Industry 4.0 technologies, including 3D printing and artificial intelligence, fail to move beyond the pilot phase of development.

Michigan is experiencing the disruption firsthand with the automotive industry as one example, with its transition from the internal combustion engine to battery-powered vehicles. Policymakers here are laser-focused on retaining our leadership position in mobility for generations to come. That’s one of the key reasons Michigan partnered with the WEF to support the U.S. Center for Advanced Manufacturing. We want the U.S. to be the voice for change and show the world how to increase productivity, engage workforces, become more sustainable and build supply chain resilience.

Increasing Success

The rapid pace of technological change, coupled with geopolitical, climate and supply chain disruptions, has created an urgency for manufacturers across the globe to adopt advanced manufacturing technologies and practices to remain competitive.

But embracing advanced technologies can be challenging on many levels, including the costs of new machinery and software and training workers in new skills and ways of working. Most companies struggle to scale digital deployments because of the high costs that can have a lengthy return on investment.

The U.S. Center seeks to accelerate the growth of cutting-edge technologies by creating communities of industry leaders, governments and academic institutions. As we’ve learned during the pandemic, managing a public health crisis requires working in a collaborative way across sectors. This cooperative model applies to innovation, too.

Just as the pandemic presented us with new conditions that allowed for and inspired innovation, the advent of new technologies and communication tools has democratized innovation, making it more accessible and inclusive. For example, open-source software allows anyone to access and modify the code, which fosters transparency and the sharing of insights.

In the same way, when it comes to advanced manufacturing, there is room for cooperation between supply chain partners, customers and even rivals to make industrial transformation a success. Automakers have taken this collaborative approach to building supply chains for electric vehicles (EVs), working together with battery producers to open joint factories and develop different ways to make batteries more efficiently.

A New Sharing Platform

Training and involving workers in the transition to EVs is critical, as automobile and parts manufacturing accounts for about one million of America’s 13 million manufacturing jobs. In Michigan, about 20% of the workforce is tied to the auto industry.

With the U.S. Center for Advanced Manufacturing right here in Michigan, the WEF has created a new platform to exchange ideas and address common challenges with joint solutions. It’s a huge win for our nation and for our state, and underscores our leadership in global manufacturing as well as the collaborative ecosystem of government, industry, labor and education that have fueled our economy for generations.

The U.S. Center complements other initiatives that the Michigan Economic Development Corporation (MEDC) supports to strengthen the state’s leadership in advanced manufacturing and job creation. One of MEDC’s priorities is to help small and mid-sized companies prepare for the future of manufacturing. Advanced manufacturing technologies aren’t just for big business; we want ALL businesses to benefit from the technological advances available today and in the future. For example, Michigan has taken a multi-pronged collaborative statewide approach to supporting advanced manufacturing. This includes a program for small manufacturers looking to adopt transformative production methods as part of a multi-million dollarIndustry 4.0 Technology Implementation Grant program.

One of the U.S. Center’s projects includes sharing insights from the frontrunners in emerging technologies who are part of the WEF’s Global Lighthouse Network, which offers use cases for responsible industry transformation. Companies that have earned the Lighthouse recognition, including Flex, HP, Schneider Electric and Western Digital, are all represented on the US Center’s executive committee.

They can be beacons to show other manufacturers the way in a dynamic environment. On one hand, new technologies are transforming the way products are designed, produced and delivered, leading to greater efficiency and customization. On the other hand, global competition, rising costs and changing consumer preferences are putting pressure on traditional manufacturing businesses to adapt and innovate in order to remain competitive.

Several forces are shaping manufacturing all at once, but the challenge of adopting the latest technologies can be daunting. By coming together under the first-ever U.S.  Center for Advanced Manufacturing right here in Michigan, we can lead and influence the dialogue on advanced manufacturing and demonstrate how it can drive economic, social and environmental impact.

As CEO for the U.S. Center for Advanced Manufacturing, Cynthia Hutchison leads efforts to engage the national manufacturing ecosystem through local, national, and international projects and activities that accelerate the transition toward advanced manufacturing.

As the senior vice president of Small Business Solutions for Michigan Economic Development Corp., Natalie Chmiko is responsible for overseeing the development and execution of organizational strategy and is accountable for implementing a long-term vision and short-term strategy to support small businesses, grow Michigan exports, foster rural development, connect businesses with key services and support to adopt Industry 4.0 technologies and other small business services available through MEDC and its partners. 

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