Thinking machines: What you need to know about Industry 4.0

President Obama made headlines recently as the first American President to attend the world’s largest industrial fair. Held in Hanover, Germany, the event –known as Hannover Messe – provided an occasion for President Obama and German Chancellor Angela Merkel to talk trade policy and get a look at the latest applications of the Internet of Things.

With technology transforming industry as rapidly as it’s already disrupted retail, both governments and businesses are urgently seeking ways to stay in front of what’s been called “The Fourth Industrial Revolution.” Ahead of Hannover Messe, Bloomberg convened The Future of Manufacturing, a deep-dive into exactly that with a high-level group of business leaders and policy makers.


Photo: James Berglie/Bloomberg

Discussion among lawmakers from both sides of the aisle, officials from the US Departments of Energy and Commerce, and top business executives revealed three essential takeaways about what’s coming next:  

1. Millennials are on the front line. The expectation is that millennials will hold more jobs during their careers than any previous generation – and they’ll need to have the skills to compete, as well as a global outlook. “What we’re looking for is workers coming in with the mentality that they want to be part of the high-tech manufacturing revolution,” said Marion Blakey, Chairmain, President and CEO of Rolls-Royce North America.


Marion Blakey, President and CEO, Rolls-Royce North America, speaks to Bloomberg Managing Editor Nicholas Johnston. The panel also included Dan Collins, COO, United Launch Alliance and Jay Timmons, President and CEO, National Association of Manufacturers. Photo: James Berglie/Bloomberg

To do that, forward-thinking engineering and manufacturing firms are partnering with both tech companies and public educational institutions to foster the next generation of job candidates. “Today, states are not competing with each other – they’re competing with China and Taiwan [for qualified employees],” added Jay Timmons, President and CEO of the National Association of Manufacturers.  

2. Advanced manufacturing is the next revolution. Robotics, big data, cloud computing and software will matter more to the future of industrial production than traditional factors like energy costs or labor costs. An example of this that’s already happening is in design, where prototypes that used to be costly and laborious to produce can now be created digitally. “The most effective way to design products – and even factories and shop floors – is no longer by investing in all the materials and building expensive models,” said Eric Spiegel, President and CEO of Siemens USA, in the event’s opening remarks. “Now it can be done right on a computer screen.”


Siemens USA President and CEO Eric Spiegel welcomes the audience. Photo: James Berglie/Bloomberg

That’s increasingly important as demand cycles shorten. When hyper-fast delivery is the expectation, it no longer makes sense to outsource everything. “Everything from SpaceX to clothes – we’re seeing factories refurbished,” said Vinai Thummalapally, Executive Director of Select USA, part of the International Trade Administration of the U.S. Department of Commerce.


Vinai Thummalapally, Executive Director, SelectUSA, U.S. Department of Commerce joined a panel that also included Rob Ivester, Deputy Director of the Advanced Manufacturing Office, U.S. Department of Energy, and Shaun Donnelly, VP, Investment and Financial Services, U.S. Council for International Business. Photo: James Berglie/Bloomberg

3. The future is non-partisan

Smart factories, computer-driven design and global demand are reshaping industry from supply chain to same-day delivery. That’s driving radical change in trade policy, regulation and the workforce.  As Representative Tim Ryan (D-OH) put it, “The question now for us as policy makers is: how do we address the anxiety of people to understand the economy is global now? To make them excited to move around in a dynamic economy?”


Rep. Tim Ryan (D-OH) speaks with Bloomberg News Economics Correspondent Brendan Greeley, as Rep. Tom Reed (R-NY) looks on. The two lawmakers co-chair the House Manufacturing Caucus. Photo: James Berglie/Bloomberg

Solutions could include job training, wage security, portable healthcare, portable pensions and other public policy measures – and because right and left can both agree on the importance of advanced manufacturing, this might be one of the few policy areas where change can happen no matter who wins in November. “We live in a global world,” pointed out Representative Tom Reed (R-NY). “We need an environment in America where we can be competitive across the board.”

Read next:

The Future of Transportation

– Jen Robinson | May 9, 2016