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Some Tech is Better Than Others When it Comes to Industry 4.0

As businesses pivot to the new reality of Industry 4.0, data is beginning to reveal sectors that have experienced the most growth—and investors are taking notice.

According to new research by Deloitte, organizations implementing Industry 4.0 technology and practices are trending toward specific products and services, as well as creating their own proprietary technologies to compete.

Deloitte has found that the highest rate of growth geared toward Industry 4.0 has occurred within predictive maintenance and operations optimization technology. The products and service within these sectors have demonstrated the most obvious ROI when implemented in modern business models and are essential for any company on its way to fully embracing the move toward total connectivity.

A key example reflecting the power of these technologies is the installation of maintenance sensors that can predict a machine breaking down before a human takes notice. Factory owners with this technology can avoid costly slowdowns due to technological issues and all that it takes is a laptop and an engineer to interpret the information.

Practical applications of 4.0 technology will garner the most interest but in order to fully appreciate this information, it’s important to note that not all 4.0-focused companies are on the same pathway. And the way a company evolves through these stages of change will likely have a considerable impact on its economic future.

Deloitte’s research divides these organizations between three stages of technological maturity: Process optimization, process flow and quality, and new business models.

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These stages are not linear, but rather represent milestones based on a company’s technological needs.  An organization making progress within one category is not necessarily completely removed from the previous stage. This is owed to the current trend of Industry 4.0 implementation being used as a problem-solver or a stop-gap, rather than a holistic approach to business.

Current advancements are primarily being focused on maximizing profitability and minimizing inefficiency as these approaches currently have the most obvious ROI potential of the three stages. As a result, most organizations are still within the first stage of maturity.

Of the 80 Industry 4.0 examples Deloitte examined, 50 percent used the technology to optimize their own operations and processes—a key indicator of the first horizon. Fifteen percent of these were also able to directly increase their gross revenue, as well as their bottom line.

Industry 4.0 is also responsible for an increasingly elevated role for startups in the new economy. Of the organizations used in this study, four out of every five have already integrated a 4.0-focused startup into their business model. Producing and integrating Industry 4.0 technologies into your business can be a prohibitively expensive proposition, no matter how inevitable they seem.

That’s where the more flexible startup comes in, filling the technological holes of larger companies for a significantly reduced price point. In fact, startups that are active in the aforementioned areas of growth have received nearly 60 percent of all available VC funding since 2014.

However, once Industry 4.0 technology begins to show more direct value, more organizations will likely develop their tech in-house and the role of the easily-discarded startup will become uncertain. This will also signal trouble for any businesses that have yet to integrate into the digital world as the third horizon is reached and successful companies find new, more profitable business models created by new technology.

In fact, future industries are already expected to benefit from this final surge toward end-to-end connectivity. Sensing and imaging technology, along with cybersecurity services, are pegged to be the areas with the most growth in the near future, once corporations move on toward less obvious improvements than simple maintenance.

For now, the most reliable indicator of informational connectivity will be the implementation of collaborators into existing business models. Already, OEM’s, manufacturers, and suppliers are moving toward a future where a small fluctuation in conditions, prices or availability will correspond to an immediate computerized response that can maximize any potential gains and avoid losses.