Made in China 2025: Make or Break for Europe?

Made in China 2025: Make or Break for Europe?

China’s ambitious plan to lead the world in advanced manufacturing will have global ramifications, whether or not the effort succeeds. Made in China 2025 (MIC 2025) is an aggressive, government-orchestrated strategy to pull the country’s manufacturing sector out of the low-labor-cost race to the bottom. China intends to compete with the high-value-add manufacturing industries in Europe and North America by adopting the latest technology and by developing domestic innovation and R&D capabilities.

How does MIC 2025 compare with European strategies for advanced manufacturing? And how will European companies be affected as China’s strategy plays out?

Industry 4.0
The European Union calls its approach to next-generation smart manufacturing Industry 4.0, casting it as the fourth industrial revolution (after mechanization via steam power; electric power and mass production; and, most recently, electronic automation of industrial machinery). While there is a tendency in the United States to equate Industry 4.0 with machine connectivity and the Industrial Internet of Things (IIoT), in fact the initiative is far greater in scope, encompassing sophisticated sensor networks, machine-to-machine communication, additive manufacturing, robotics, machine intelligence, analytics, and cloud technology. These cyber-physical systems will monitor factory processes and make decentralized, autonomous decisions, leading to smarter, more automated factories.

The Industry 4.0 movement started in Germany in 2010 when the German federal government published its Action Plan for High-Tech Strategy 2020. The plan comes with a budget of 8.4 billion euros ($9.8 billion), initially allocated for 2012-2015, for its 10 constituent projects, one of which is Industry 4.0.

While other European countries are working on adopting Industry 4.0 technologies in their own manufacturing industries, Germany is by far the leader in the field, thanks in part to its strong expertise in industrial embedded systems, combined with support from its government.

To oversee the architecture of Industry 4.0, the industry body Plattform Industrie 4.0 was set up in 2013. This group of German business associations develops technologies and standards, as well as business and organizational models, and promotes cross-industry idea exchange. Its working groups are currently drafting system reference architectures and communication standards; addressing issues such as network security, workforce education and training; and evaluating opportunities and risks under the current, human-centric legal framework.

An EU report issued in 2016 states: “While many member states are carrying out these activities, Industry 4.0 as implemented in Germany is doing it in a very targeted, coordinated, and structured manner. As such, Industry 4.0 is certainly a comprehensive and ambitious approach that appears to be well-suited to the German situation. In some EU member states, notably Austria, Belgium, Denmark, Finland, France, Italy, The Netherlands, Portugal, Spain, Sweden and the U.K., there is strong support and interest. But only in a few instances is the program as comprehensive as in Germany.”

IBM says it established its global headquarters for the Watson IoT Ecosystem in Munich partly because of Industry 4.0. (Source: IBM)IBM says it established its global headquarters for the Watson IoT Ecosystem in Munich partly because of Industry 4.0. (Source: IBM)

Indeed, the program is so advanced in Germany that companies operating in that country are already looking at the next step: machine intelligence in the industrial setting.

IBM opened its global headquarters for the Watson IoT Ecosystem in Munich earlier this year, saying that it chose to locate the center in Germany partly because of Industry 4.0.

“Germany, and Bavaria in particular, is widely recognized globally for being on the front edge of adoption and development of IoT technologies, in part due to Industry 4.0,” said Niklaus Waser, vice president of IBM’s Watson IoT Ecosystem and head of the ecosystem’s headquarters in Munich. “Germany is home to some of the most innovative automotive, manufacturing, and industrial companies, which all need strategies to deal with the massive amounts of data their products are creating. While this is a global phenomenon, there are advantages that come with proximity, and we believe being here in Munich will foster greater collaboration and accelerated innovation.”

Artificial intelligence is a natural fit for industrial applications, Waser said. “The potential of cognitive IoT and Industry 4.0 can be fulfilled by marrying physical and digital systems — harnessing information from connected machines, and applying analytics and cognitive computing to transform operational performance.”

IBM added more than 50 clients to its IoT platform in the past quarter, and the number of developers on the platform has logged double-digit growth since it opened earlier this year. In the industrial sector, IBM has partnered with ABB (Zurich) to make cognitive computing part of the ABB Ability connected-machinery platform. The idea is to allow industrial machines not to only gather data, but also to use artificial intelligence to analyze and understand the data, and then to reason and take appropriate action based on the findings. For example, Watson analyzes real-time production images from ABB machines to look for defects.

Utility companies are using Watson to predict supply patterns for electricity grids based on historical and weather data in order to optimize load management and enable real-time pricing models. Watson is also used at Schaeffler Group, where cognitive insights from the cloud enhance predictive maintenance systems. Smart bearings can measure their vibration, temperature, torque, and speed, and Watson uses that data to predict and prevent failures.  

Next Page: MIC 2025 vs. Industry 4.0


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