Wednesday, October 31, 2018

Allow Industry 4.0 Technology in New Units in Backward Locations

Allow building new plants with Industry 4.0 Technology in backward industrial locations up to a cumulative capacity of 10%

Remove the Idea of Job Losses

Regulation of Industry 4.0 

Allow Industry 4.0 Technology in New Units in Backward Locations - Increase Employment and Infrastructure

Now Industry 4.0 technology is being implemented world over. There are worries about employment issues due to introduction of new technology. Government has to regulate its introduction and diffusion to protect current employees.  In this context, I propose that in the first installment Government may allow building new plants in backward industrial locations up to a yearly limit of  10% of the existing capacity of an industry (5% productivity improvement and 5% new products).  The objectives of such a policy are allowing technological absorption and its further development concurrently with the rest of the world, backward area development and decongestion of existing industrial locations. We have to note that when already congested industrial locations are being used for further setting up facilities, new infrastructure development is not taking place. All concerned are ignoring infrastructure and overusing existing facilities. Instead, if new technology is allowed only in new backward location, infrastructure development also takes to an adequate extent.

Allowing only 10% expansion each year in new location with new technology may not disturb existing employment at all, as the market may absorb the new production at the reduced cost of production that the new technology may be able to produce. In this context, productivity of the new technology is an important consideration.

To my email communication campaign on this issue, I got one reply saying the limit can be increased to 20% to encourage employment in new locations.

By taking up this policy stance, Government can actively promote startups in Industry 4.0 Factories and Service Facilities.

Progress of Industry 4.0 in India

Feb 2018
Many Indian companies have started exploring applications of Industry 4.0 in their operations.
According to a recent BCG-CII survey, almost 60% of the surveyed companies have started deploying data analytics in some fashion.
20-40% are experimenting with autonomous robots and additive manufacturing.
More than 75% of the companies indicated that they will be trying at least three or more of industry 4.0  technologies over the next five years.

Updated  31 October 2018,  15 July 2018
First published on 3 July 2018

1 comment:

  1. I got a comment through email suggesting that capacity up to 20% can be created.