Ireland’s Industry 4.0 Strategy 2020-2025

I R E L A N D 2019

Preparing Now for Tomorrow's Economy

Ireland's Industry 4.0 Strategy 2020-2025

Supporting the digital transformation of the manufacturing sector and its supply chain

Developed by the Department of Business, Enterprise and Innovation

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Minister's Foreword

This Industry 4.0 Strategy is a key output of Future Jobs Ireland, the Government's new economic pathway to ensure that Ireland is well placed to prosper in a rapidly changing global economy.

Manufacturing is a central pillar of our economy employing over 227,000 people with 85% of that employment outside Dublin. Ireland has successfully established a global reputation in manufacturing sectors such as Pharmaceuticals and Chemicals, Food and Drink, Medical Devices, Computers and Electronics, and Engineering. However, the emergence of a new wave of advanced ICT technologies is spurring a radical transformation across the sector. Such is the scale of this transformation that it is often referred to as the fourth industrial revolution or Industry 4.0.

Firm adoption of Industry 4.0 will be critical to maintaining a competitive manufacturing base into the future which will drive national productivity gains and underpin sustainability of high-quality jobs and export-led economic growth. However, firms of all sizes will face challenges in developing and adopting Industry 4.0 strategies. In 2019, Future Jobs Ireland acknowledged these challenges and signalled Ireland's ambition, not just to respond, but to embrace the opportunities offered.

One of Ireland's advantages in the Industry 4.0 transition is the depth of world class manufacturing and ICT expertise located here. Government programmes that support clusters, such as the Disruptive Technologies Innovation Fund funded under Project Ireland 2040, will bring this expertise together to develop innovative solutions and new business opportunities, as well as ensuring the widespread adoption of new technologies.

A key policy concern is the effect that digitalisation will have on employment. It is expected to reshape the skills that will be required from the workforce of the future. The Government will ensure that the education and training system responds to those changing skills needs. The Industry 4.0 Strategy will also support Ireland's Climate Action Plan as digital technologies can lead to more efficient and flexible production processes with increased resource efficiency in terms of both energy and materials.

Through this Strategy, the Government is responding to the scale of the transformation presented by digital technologies with an ambitious plan that will help ensure that by 2025 Ireland will be at the frontier of the fourth industrial revolution and at the forefront of Industry 4.0 adoption.

The Industry 4.0 Strategy builds on Ireland's industrial capabilities built over the decades, including a thriving community of indigenous supply chain SMEs and the presence of world-leading software and ICT industries.

As the technologies driving the Fourth Industrial Revolution are developing so rapidly, research and development (R&D) will play a key role in ensuring that Ireland is at the forefront of Industry 4.0. To ensure that Ireland stays ahead of the curve, we have already invested in a number of research centres, including the SFI funded research centres CONFIRM and I-Form and the Irish Manufacturing Research Centre funded by Enterprise Ireland and IDA Ireland.

To ensure coherence across these centres my Department is establishing a new coordination mechanism Future Manufacturing Ireland as part of this strategy. The role of FMI will be to ensure the publicly funded centres develop the full breadth of capability required to support companies in this time of rapid and complex change and to make it easier for companies to access the expertise that they need.

Heather Humphreys TD Minister for Business Enterprise and Innovation December 2019

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Contents

Executive Summary

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1. Introduction

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1.1 Enterprise Policy Context

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1.2 Importance of Manufacturing to Ireland

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1.3 Industry 4.0

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1.4 Rationale for an Industry 4.0 Strategy

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1.5 Structure of Ireland's Industry 4.0 Strategy

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2. Vision and Goals

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2.1 A Vision for Industry 4.0 in Ireland

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2.2 Goals of Ireland's Industry 4.0 Strategy

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3. Strategy by Strategic Actions

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Theme 1: Future Manufacturing Ireland

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Theme 2: Awareness and Understanding of Concepts

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Theme 3: Exploring and Planning

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Theme 4: Implementation of firm-level Industry 4.0 Strategies

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Theme 5: Framework Conditions for Industry 4.0

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Theme 6: Implementation of Ireland's Industry 4.0 Strategy

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References

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Executive Summary

The vision underpinning this strategy is that by 2025 Ireland will be a competitive, innovation-driven manufacturing hub at the frontier of the fourth industrial revolution and at the forefront of Industry 4.0 development and adoption.

Future Jobs Ireland 2019 acknowledges the impact that advanced digital technologies, such as artificial intelligence, robotics and big data and analytics will have on Ireland's economy and manufacturing base. With its focus on the quality and sustainability of jobs and the productivity of the enterprise base, Future Jobs Ireland signals Ireland's ambition, not just to respond to the challenges, but to embrace the opportunities presented by these new technologies.

New digital technologies have already begun to transform global manufacturing value chains, supply chains and business models, redefining sources of competitive advantage for both firms and national economies. Digitalisation of manufacturing refers to the use of digital technologies, data and applications to deliver advancements in manufacturing-related operations (including the broader value chain of manufacturing activities) and to enhance the performance of manufactured products (and related services) in both established and emerging sectors. The family of technologies underpinning digitalisation includes: cloud computing; advanced sensors; highperformance computing; advanced automated and autonomous systems; robotics; artificial intelligence; machine learning; augmented/virtual reality; blockchain; big data; and digital fabrication (including 3D printing), among others. The boundaries of manufacturing therefore are being reconfigured as digital capabilities and firms that were traditionally outside of manufacturing, become part of emerging value networks.

Ireland has a strong manufacturing base employing 227,000 people in key sectors such as Pharmaceuticals and Chemicals, Food and Drink, Medical Devices, Computers and Electronics, and Engineering in 2018 [1]. Industry 4.0 therefore presents both opportunities and challenges for enterprise policy in areas such as employment, productivity, competitiveness, and sustainability. There will be new cross-cutting opportunities for manufacturing firms arising from Industry 4.0 product and service innovation including enhanced business models (through the provision of a range of data services to customers) and the development of more functional products. These underpinning capabilities can potentially strengthen the competitiveness of Ireland's manufacturing base.

Process innovation built on digital technologies can also lead to more efficient and flexible production processes with increased resource efficiency (both energy and materials). Industry 4.0 adoption will therefore contribute to the climate action agenda as set out in Ireland's Climate Action Plan 2019.

A key policy concern however is the effect that digitalisation will have on employment. It is expected to reshape the skills that will be required from the workers of the future, driving significant disruptions in the labour market. In Ireland it is projected that overall there will be growth in manufacturing employment over the next five years, but only under the assumption that manufacturing in Ireland remains internationally competitive. Industry 4.0 capability will be a critical driver of that competitiveness, underpinning productivity growth and innovation in new goods and services across the value chain.

International benchmarking exercises have signaled Ireland as a leading country in terms of readiness for the future of production. A number of key features have been identified in the Irish enterprise base that could help position Ireland as a leader in Industry 4.0 if appropriately leveraged, including our existing industrial capabilities, the presence of world leading software and ICT industries and the relative proximity of firms which facilitates collaboration.

However, firms of all sizes face challenges in developing and implementing Industry 4.0 strategies including: investing in RD&I and access to demonstrators; challenges around technology adoption including the availability of technology roadmaps and expertise, interoperability and standards and identifying common opportunities and new value chain partners; and finally challenges internally around deployment including firm capability, skills gaps and technology implementation and integration costs.

While the Industry 4.0 transformation will be led by firms, the presence of enabling conditions that facilitate the development of new technologies, as well as their diffusion and absorption, will play a key role in the digital transformation. This strategy therefore sets out a clear vision and goals for Industry 4.0 in Ireland and the strategic actions that will help to achieve those.

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A Vision for Industry 4.0 in Ireland

The vision underpinning this strategy is that by 2025 Ireland will be a competitive, innovation-driven manufacturing hub at the frontier of the fourth industrial revolution and at the forefront of Industry 4.0 development and adoption.

Manufacturing firms, and their supply chains, will be employing Industry 4.0 technologies to support productivity, international growth and sustainable employment. Firms will be exploiting opportunities offered by Industry 4.0 technologies by: ? adapting their methods of manufacture to improve productivity and enable

enhanced customisation and made to order products; ? competing in new markets based on innovations in goods and services; ? developing new business models; ? better integrating supply chains; ? building competitive advantage through the development,

adoption and strategic use of relevant standards. Ireland will excel at providing the opportunities to develop skills and capabilities of the current and future workforce required for Industry 4.0. Ireland will be globally recognised for the development and deployment of new Industry 4.0 technologies building on our strengths in RD&I. A strong collaborative culture will be a key driver of Industry 4.0 in Ireland, and will support the digital transformation across sectors, value chains and supply chains, and will position firms in Ireland at the global forefront of the Industry 4.0 transformation. The Industry 4.0 ecosystem will be underpinned by a strong and balanced policy, legal and regulatory framework.

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Goals of Ireland's Industry 4.0 Strategy

1. To stimulate firms to adopt and build capability in Industry 4.0 technologies.

2. To stimulate firms to harness the new opportunities enabled by Industry 4.0 technologies.

3. To become a global leader in RD&I which underpins Industry 4.0.

4. To facilitate the current and future workforce to develop the skills to deliver the Industry 4.0 transformation and exploit the new opportunities arising in manufacturing and supply chain firms through Industry 4.0 technologies.

5. To establish a world class business environment for Industry 4.0 which is underpinned by an appropriate regulatory, legal, standards, and internationally connected ecosystem.

Strategic Actions

The strategy has been structured around six themes:

1. Future Manufacturing Ireland 2. Awareness and

Understanding of Concepts 3. Exploring and Planning

4. Implementation of Firm Level Industry 4.0 Strategies

5. Framework Conditions

6. Implementation of Ireland's National Industry 4.0 Strategy

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Theme 1: Future Manufacturing Ireland

To achieve Ireland's goal of becoming a global leader in RD&I underpinning Industry 4.0, the Department of Business, Enterprise and Innovation (DBEI) will establish a new coordination mechanism - `Future Manufacturing Ireland'. The role of Future Manufacturing Ireland will be to develop the breadth of capability required across publicly funded research centres in a coherent and coordinated manner and to ensure that this capability is promoted to firms of all sizes. This new coordination mechanism will ensure maximum alignment of activities across the system, avoiding unnecessary duplication and fragmentation of effort.

Theme 1: Future Manufacturing

Ireland

Strategic Actions

Strategic Action 1

Establish a new coordination mechanism, Future Manufacturing Ireland, to ensure coherence and optimal delivery of RD&I supports across centres with a dedicated focus on advanced manufacturing/Industry 4.0.

Responsibility ? DBEI, EI, IDA, SFI

Theme 2: Awareness and Understanding of Concepts

These actions aim to help firms develop awareness of the opportunities and challenges arising from Industry 4.0, and the supports and expertise that are available to support firms.

Theme 2: Awareness and Understanding of

Concepts

Strategic Actions

Responsibility

Strategic Action 2

Raise awareness and understanding amongst manufacturing firms and their supply chains of the concept of Industry 4.0 and the potential business benefits and opportunities to be derived from engaging in Industry 4.0 activities.

? EI, IDA, SFI, NSAI, LEOs

Strategic Action 3

Support the activation of enterprise-led Industry 4.0 clusters including through the use of the Regional Innovation and Technology Clusters Fund.

? EI, IDA, SFI, NSAI

Strategic Action 4

Provide clear communication and guidance to firms at all stages of their Industry 4.0 journey, mapping where current digital capability and technical expertise may be found, and signposting public supports available for supporting the Industry 4.0 transformation.

? EI, IDA, SFI, NSAI, LEOs

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