Man and machine in Industry 4.0: how will technology transform the industrial workforce through 2025?

This paper examines the current transformation of industrial production referred to as Industry 4.0, resulting from the rise and introduction of new digital industrial technologies. Questions asked include: How will this next wave of industrial evolution play out? Will it create or destroy jobs? How will job profiles evolve? And what types of skills will be in demand? To understand how the industrial workforce will evolve with Industry 4.0, the authors used the example of Germany to study the effects of the introduction of digital industrial technologies on the evolution of 40 job...  [+] Show more

This paper examines the current transformation of industrial production referred to as Industry 4.0, resulting from the rise and introduction of new digital industrial technologies. Questions asked include: How will this next wave of industrial evolution play out? Will it create or destroy jobs? How will job profiles evolve? And what types of skills will be in demand? To understand how the industrial workforce will evolve with Industry 4.0, the authors used the example of Germany to study the effects of the introduction of digital industrial technologies on the evolution of 40 job families in 23 industries. The conclusion is that more jobs will be gained than lost but workers will require significantly different skills.

The findings suggest that technology will help people remain in or return to the workforce. The detailed modeling forecasts a net increase of approximately 350,000 jobs in Germany through 2025. Greater use of robotics and computerization will reduce the number of jobs in assembly and production by approximately 610,000. But this decline will be more than offset by the creation of approximately 960,000 new jobs, particularly in information technology (IT) and data science. To successfully adopt Industry 4.0, companies need to retrain their workforces, revamp their organization models, and develop strategic approaches to recruiting and workforce planning. Education systems should seek to provide broader skill sets and close the impending gap in IT skills. Governments can explore ways to improve central coordination of initiatives that promote job creation.

Edited excerpts from publication.