'Industry 5.0' - nonsensical, indispensable or unavoidable? - An approach from the perspective of innovation communication and R&I policy

The term 'Industry 5.0' is the subject of controversial debate: While some dismiss it as nonsense, others see it as a further development. Industry 4.0 has revolutionized production through intelligent networking, but the increasing pressure to innovate and technological advances such as AI and machine learning require new approaches. Industry 5.0 focuses on sustainable, resilient production that puts people at the center. This development is supported by institutions such as the EU Commission and individual universities. The article examines the importance and necessity of Industry 5.0 as part of the transformation process in five steps.

The term 'Industry 5.0' is subject to debate: some dismiss it as nonsense, while others see it as a necessary evolution. Industry 4.0 has revolutionized production through intelligent networking, but increasing innovation pressure and technological advancements such as AI and machine learning require new approaches. Industry 5.0 focuses on sustainable, resilient production that places humans at the center. This development is supported by institutions like the EU Commission and individual universities. The article examines the significance and necessity of Industry 5.0 as part of the transformation process in five steps.

Introduction

Is the term Industry 5.0 'nonsense' [1], as the trade magazine Maschinen Markt judges, or is it just being used carelessly and thus contributing to uncertainty [2], as the Industry 4.0 Research Advisory Board and the Industry 4.0 Platform believe? These were at least the voices that were heard around the Hannover Messe trade fair in April this year. In the summer of 2024, the Fraunhofer Institute for Cognitive Systems (IKS) [3] sounds a little less militant. Industry 4.0 has led to the intelligent, optimized and flexible networking of machines and processes in production. However, increasing pressure to innovate coupled with digitalization, AI technologies and machine learning would bring with it new tasks that describe sustainable and resilient production as a guiding principle that focuses on people. And this is what at least the EU Commission would describe as Industry 5.0. This aspect is also taken up by the TU Ilmenau in the final report of its research project 'Engineering for Smart Manufacturing (E4SM)' [4] - the focus is on the interaction between humans and machines and this interaction is supported by AI and that is 'Industry 5.0'. So is the term 'Industry 5.0' nonsensical, indispensable or perhaps just unavoidable? The answer to this question cannot be formulated unambiguously, but it is reasonable to conclude that terms such as 'Industry 4.0' and now 'Industry 5.0' are necessary elements of transformation processes. This answer will be derived in five steps. The introductory reflection on the framework conditions of innovation and transformation as the first step is followed by an approximate assessment of the term 'Industry 4.0' and its success story as step two. This includes a look at the reception on international markets and the factors of success as the third step. This then leads to questions about the idea and resources of the term 'Industry 5.0' in the fourth step, before finally formulating a conclusion and an outlook in the fifth and final step of the argument.

Innovation and transformation: communication as the basis

Sectors and industrial companies are facing challenges due to changing markets, new market players, shorter innovation cycles for technologies or changing (geo)political conditions, but also due to changing social priorities. In general, circumstances or events that need to be solved or overcome are referred to as problems. And what is identified as a problem to be solved is the result of a social, societal or technical and industry-specific negotiation process that is influenced by various public, political, economic and social actors and mediated by media systems and intermediary institutions. However, it is not only problem definitions that play a role in this negotiation process; goals, desirable or avoidable scenarios and conditions are also outlined and discussed. Whether a solution to a problem is an innovation, how the transition from the current to the desired state can be shaped as a transformation, requires communicative means that make possibilities, risks, opportunities or side effects imaginable and thus discussable. In research, the term 'socio-technical futures' has become established for this purpose, allowing the actors involved to discuss ideas about the future, paths to achieving goals and acceptable or unacceptable side effects. Innovations that open up new markets, tap into new customer segments or help secure the future of a company as new business models must first be described as such in the literal sense. Changes have a goal and both the necessity and the goal of this transformation also require visualization and description. In research on innovation communication, there is a consensus that innovation is what is considered innovative and that innovations are therefore created in people's minds and that it is important to reach them under the conditions of the media society [5].

In the case of so-called 'emerging technologies' or the emergence of new fields of technology in general, no precise definitions give the starting signal, but rather these technologies and fields of technology emerge in mostly iterative processes of research, development and discussion. Examples include the field of nanotechnology or currently the field of artificial intelligence. However, concepts, visualizations and narratives are required in order to be able to agree on goals, paths, desirable or inevitable things. This becomes all the more important when impacts are not limited to sectors or markets, but affect societies as a whole or are either beneficial or detrimental to certain population groups. In democratic, pluralistic societies, this requires at least the opportunity for information and ideally also the opportunity to participate in the negotiation process. This presupposes that societies have concepts that enable them to talk to each other without complex and precise definitions. New technologies open up 'speculative spaces' whose contours are blurred, as Sascha Friesike and Johanna Sprondel put it in 2022 [6]. These technologies made promises that are flexible and can therefore be interpreted differently from different points of view and interest perspectives or filled differently as empty signifiers Terms such as 'Industry 4.0' also fall into this category.

Entrance to Hannover Messe 2024 - the concept of 'Industry 4.0' was presented for the first time at the 2011 trade fair

'Industry 4.0' as an idea and impulse for Germany as an industrial location.

You can't buy 'Industry 4.0'. Unfortunately, it may have to be said afterwards, as Prof. Birgit Vogel-Heuser from the Technical University of Munich [7] had perceived the desire of many players in various industries as well as in politics in 2017. To date, little has changed from the diagnosis made at the time. 'Industry 4.0' is a concept that has many facets and primarily encompasses the digitalization of production, the cross-machine and cross-company exchange of data, data business models and flexibility and efficiency in production. As concrete but unspecific as it is, it has helped companies and industries to agree on what change was and is necessary. For change and transformation, it is important to be able to put their necessity at the top of the agenda. This is less successful when facts require complicated explanations and more successful when the ideas can be condensed into a single term. This was achieved at the time with the creation of 'Industry 4.0'. Prof. Henning Kagermann (then President of Acatech - German Academy of Science and Engineering), Prof. Wolfgang Wahlster (then Director of DFKI - German Research Center for Artificial Intelligence) and Wolf-Dieter Lukas (then a member of the BMBF - Federal Ministry of Education and Research), who first presented the concept under this name at the Hannover Messe 2011, are regarded as the intellectual authors of the term Industry 4.0. The term fits in with the high-tech agenda of the German government at the time and, with its focus on industry and the manufacturing sector, it almost seamlessly ties in with existing narratives of Germany as an engineering and industrial nation. Kagermann, Lukas and Wahlster were members of the so-called promoter group for information and communication technologies in the Industry-Science Research Alliance, an expert committee that supported the German government's high-tech strategy. The two promoters Wahlster and Kagermann were thus two figures of identification for the concept of 'Industry 4.0' who, as policy brokers or so-called epistemic authorities, helped to raise its profile, credibility and importance. The digitalization of manufacturing and the industrial sectors cannot be described as a continuous, self-evident development, but is characterized by conflictual discourses about the threat of job losses due to automation and digitalization or is framed by moments of crisis threatening to drive German companies out of the market due to a lack of digitalization. This revealed a need for action, a constellation of problems that required measures. This necessity was somewhat called into question by the industry's export success after the financial crisis had been overcome. For the manufacturing sector in Germany, however, threats were described that had arisen as a result of technological advances, international competitors and the lack of technical prerequisites, as well as a lack of willingness to transform in the SME sector. Digitalization was the desired solution strategy here. On the other hand, the dystopia of the deserted factory was a virulent conflict with the labor market and the workforce and their representatives, which was also taken up by the news media. According to Wahlster's account, the term Industry 4.0 and its mention in the Hermes Award speech at the 2011 Hanover Trade Fair raised awareness of the topic with then Chancellor Angela Merkel and anchored the issue in federal politics and in the public eye.

This is what a production facility without people could look like

In retrospect, it is clear that the two promoters and the institutions they represented were able to successfully act as brokers in industrial policy and mediate between the conflicting positions of necessary transformation, preservation of previously successful concepts and defense against employment disadvantages. From a research perspective, the decisive factor here is that the term 'Industry 4.0', and precisely because of its lack of an exact definition, has made a discourse possible in which orientation has been provided and at the same time there has been sufficient room for interpretation for the individual players to position themselves and identify their own strategies within a path. Even taking into account critical voices that miss concrete results in the form of productivity gains, it can be stated that the term 'Industry 4.0' has succeeded in building an agenda that has influenced the discourse of all players in industrial policy, from companies to politics and the media to society. Kagermann and Wahlster were and are consulted by both politicians and the media to comment on progress or further needs in the digital transformation of industry. The number combination 4.0 is now widely used as a cipher in discourses on the labor market, education and social policy. This process has not yet been completed, but according to experts, it is showing clear successes, which are measured by the fact that Industry 4.0 itself can be described as a German export hit.

The export hit abroad: Is 'Industry 4.0' the same as 'Industry 4.0'?

At the opening of the Hannover Messe 2015, the then Federal Minister of Economics Sigmar Gabriel picked up on the concept and expressed his conviction that 'Industry 4.0' had what it takes to become an export hit. This proved to be the case, as the example of Norway illustrates. In 2017, the Norwegian government officially presented an 'Industry 4.0 strategy' and defined the approaches of the German 'Industry 4.0' concept as a role model. As a model, yes, but not as a blueprint. In research, concepts such as 'Industry 4.0' are described as a vision of the industry of the future, which, as a socio-technical vision, carries within it certain values and ideas of order from the original context of Germany as an industrial location and therefore cannot be adapted one-to-one. While efficiency and productivity aspects dominated the Industry 4.0 debates in Germany, the government in Norway did not pursue the goal of reindustrialization, but rather an innovation strategy aimed at the diversity of production sectors. Norway's main branches of production are fishing on the one hand and the oil and gas industries on the other. Due to the changing economic and social conditions, Norway wants to reduce its dependence on the raw materials industries. As a result, the government wants to promote applied research and innovation orientation in industry. In addition to a tax policy and start-up support geared towards this, the main aim is to promote diversity in industrial production. The government's white paper focused on green and smart technologies that help create economic growth, jobs and tax revenues in trade and industry beyond the oil and gas industries. The white paper on 'Industry 4.0' was aimed at broadening the industrial base and thus follows the evaluations of the research group from Harvard [8], which worked out the dependence of an economy's innovative strength on its diversified industrial base in the Atlas of Economic Complexity. The fact that the Norwegian adaptation of 'Industry 4.0' is also not based on an exact definition or that 'Industry 4.0' must be seen as both a strategy and a concept underlines the fact that companies in Norway are also asking for a definition and description or managers want a uniform roadmap for implementation in order to be able to introduce 'Industry 4.0' 'correctly'. In Norway, too, the term 'Industry 4.0' is used to describe a path and an idea in order to be able to agree on directions and details. However, this concept meets different basic requirements in Norway than in Germany. Researchers emphasize the importance of the well-equipped and innovation- and digital-friendly public sector in Norway, the broad anchoring of trade unions, the generally egalitarian structures and the (digital) qualifications of employees as key success factors for the digital transformation in the face of globalizing markets. Whereas in Germany, where 'Industry 4.0' was invented, the main focus was on efficiency arguments that centered on a batch size of 1 and customer orientation as well as flexibility in production and were also intended to enable the reshoring of industrial jobs, the main thrust in Norway was to broaden the industrial base beyond oil and gas industries. Aspects of smart and green production, which are mentioned in Norway in the context of this project, were completely absent in Germany at the beginning.

And now 'Society 5.0' and 'Industry 5.0' - the EU's mission orientation

Japanese Prime Minister Shinzō Abe during his speech at CeBIT 2017The'green gap' of the 'Industry 4.0' concept was then taken up by the EU Commission in the debate on innovation and industrial policy. The EU Commission had focused early on green technologies, sustainability and innovation as a strategy for re-industrialization, but addressed these as the Green Deal or Green Industry. Industrial resilience played an important role in the Industry 4.0 concept, but without addressing the aspects of sustainability and environmental compatibility. After the term 'Industry 4.0' had long dominated the agenda in politics, society, the media and the manufacturing industry and had become an integral part of the marketing communication of industrial companies and industrial policy in German-speaking countries, the EU Commission initially attempted to extend the digital transformation and 'Industry 4.0' to green issues. After the EU Commission identified the restructuring of European economies and the challenges posed by globalization, digital transformation and changing geostrategic technology policies as an important field, an attempt was made to combine industrial strategy, innovation policy and sustainability in a common term and to address not only environmental and green aspects but also the effects on society and social structures, which ultimately led to the concept of 'Industry 5.0', which can be seen as a social extension of the digital transformation. However, this has come up against a heterogeneous landscape of EU member states, which is also reflected in the discussion of 'Industry 5.0' in the respective cultural contexts. Alongside the Netherlands and Austria, Sweden and Denmark discussed, researched and implemented sustainable economic development at an early stage. It is noticeable that in Sweden and Denmark in particular, 'Industry 5.0' is currently being discussed less with regard to sustainability goals, but rather focuses on the aspect of human-centeredness and above all on collaborative robots and their integration into production, i.e. human-machine interaction. This indicates that the integrating effect of the EU Commission's concept may reach its limits in view of the specific features in the member states. However, 'Industry 5.0' can also be seen as a reaction to an impulse from the industrialized nation of Japan. In his opening speech at Cebit 2017 in Hanover, then Japanese Prime Minister Shinzo Abe outlined his government's program for a Society 5.0 - the development of Japan into a 'Super Smart Society'. A programme that considers digitalization in its disruptive significance for society as a whole and was seen as an approach to overcoming the so-called Grand Challenges such as demographics or climate change or the security situation in Asia. The Japanese Society 5.0 was also seen as a response to the German 'Industry 4.0'. At the time, Prime Minister Abe also approached German Chancellor Angela Merkel with the proposal to bundle the competencies of 'Industry 4.0' and 'Society 5.0' in future, although this had no consequences. According to Japan's own description, 'Society 5.0' is not aimed at productivity, but should help to tackle social issues. Society 5.0' is currently being discussed primarily in the Asian economic areas and is rarely present in European discourse. With the concept of 'Industry 5.0', the EU Commission is responding to the challenges with its own approach, which can also be seen as an impetus for 'Society 5.0'. Grand challenges such as demographics, migration, climate change or the security situation require a response that cannot focus solely on technologies. Modern societies that follow the innovation paradigm also have a need for orientation. Concepts such as 'Industry 5.0' emphasize that it must be possible to shape technological developments with foresight and create an orientation framework. 'Industry 5.0' focuses on the three interlinked core values of people-centricity, sustainability and resilience and is therefore not a technology-driven revolution, but a values-driven initiative that drives technological change with a specific goal. 'Industry 5.0' relies on social heterogeneity in terms of values and acceptance, measurement of ecological and social value creation, participation and transparency of customers or interest groups and NGOs, interdisciplinarity of research disciplines and system complexity as well as ecosystem-oriented innovation policy with an outcome orientation. With the goal of human-centricity, the term 'Industry 5.0' includes a topic that has accompanied the discourse on digitalization in the factory and the debates on Industry 4.0 from the very beginning: the factory without people. Early on, protagonists of the digitalization of factories in Germany tried to integrate people into their digitalization concept as the "conductor of the value chain" in order to counteract dystopian narratives. However, after an initially intense debate, the topic of 'Industry 4.0' took a back seat to the focus on the implementation of digitalization and its technical implications, such as cybersecurity or data management. In the context of 'Industry 5.0', the topic appears as collaborative robotics, as a facilitating tool or as an answer to the shortage of skilled workers and therefore less threatening and more supportive. 'Industry 5.0' cannot be viewed in isolation. Industrial policy has been at the heart of the EU Commission's recent policy proposals in order to achieve climate targets, to be more resilient to external shocks and to maintain or re-establish a leading role for the European economy in changing market environments. However, 'Industry 5.0' attempts not only to focus on industrial policy, but also to tackle the challenges systemically. Research on industrial policy and on policy fields of research and innovation policy agrees that concepts, empty signifiers or narratives such as 'Industry 5.0' are necessary to enable societies and associations such as the European Union to debate common objectives and transformation paths, the acceptance or rejection of the effects of measures. The focus on missions and the SDGs (the Sustainability Development Goals) flows into regulatory policy and therefore also has an impact on companies, which not only respond to legal requirements in sustainability reports, but also position themselves in relation to employees, junior staff and customers and their local environment. Corporate social responsibility or corporate citizenship are concepts with which companies respond to the awareness and the resulting requirements that they are not only part of industries and markets, but also of a society and must interact with it.

Image: @European Commission: Directorate-General for Research and Innovation

'Industry 5.0' necessary for policymakers - but also for companies?

This brief analysis shows that 'Industry 5.0' marks a paradigm shift in the EU Commission's industrial policy, which should be seen as a response to the shortcomings of previous policies. The orientation towards values and the achievement of goals is decidedly normative and thus a shift from technological paradigms to a mission orientation that is guided by the SDGs, but also keeps in mind the idea of reindustrializing the EU member states through green manufacturing processes. The EU Commission's Directorate-General for Research and Innovation has described 'Industry 5.0' as a "gamechanger" in its recent publication. According to the group of experts, the concept is an opportunity to future-proof European industries and the innovation ecosystem. Resilience as a goal of 'Industry 5.0' is referred to in the latest publication with regard to the climate crisis, the coronavirus pandemic and the Russian war of aggression against Ukraine. These backgrounds, but also the evolving demands on companies, require a dialog between companies and their environment. Last but not least, digitalization is changing many things in communication: stakeholders are exchanging information about companies and organizations faster and more intensively. In the digital age, communication takes place in communication arenas. This is primarily due to intensified and accelerated competition and the increasing loss of companies' authority to interpret the discourse relating to them. This is why social legitimacy, the "licence to operate", is becoming increasingly important and even existential for organizations and companies. As with 'Industry 4.0', the term or concept of 'Industry 5.0' offers the opportunity to ensure an exchange between different stakeholders about goals, transformation paths, opportunities and risks. Of course, the formulation with the version numbers seems as if the discussion of Industry 6.0 or at least Industry 5.1 could be called for the day after tomorrow. There are suggestions in industrial policy research that 'Industry 4.0' should also take into account the UN's sustainability goals and not just focus on production and manufacturing. Even if resource efficiency is an aspect of Industry 4.0, this does not automatically lead to environmental relief, contrary to various marketing statements; rather, as research shows, Industry 4.0 concepts have both a positive and negative impact on the environment, without the overall ecological effects being foreseeable on balance. What's more, the vision of 'Industry 4.0' has so far been associated with technology-centered and growth-oriented ideas, with resource efficiency appearing more as an unintended side effect. From the perspective of the Association of German Engineers, however, the green economy and Industry 4.0 can easily be brought together via the concept of resilience. However, the VDI's latest project 'Future Germany 2050' also deals with goals, visions and scenarios of technologies, society and the environment - in other words, with elements that are integrated into a discourse on 'Industry 5.0'.

Instead of a conclusion

The preoccupation with 'Industry 4.0', but also with 'Industry 4.0', shows that socio-technical visions, as they can be described and imagined by such terms, are necessary in order to be able to agree on transformations, goals, desirable states or effects to be avoided. The discussions outlined above also show that the concept of Industry 4.0 generated in Germany as an industrial location is understood differently in other European countries. There is no instrument for communication within the EU. Here, 'Industry 5.0' with the impetus from the EU Commission can be an opportunity to engage in the necessary exchange with stakeholders in business, society and politics in order to discuss goals and paths in view of the Grand Challenges. The new elements such as resilience, sustainability and future viability are given little or no consideration in 'Industry 4.0'. The concept of 'Industry 5.0' can be helpful for the dialog between companies and their environment, with the various players in the EU, if those involved in the discourse engage with it. The question remains as to whether this can be as successful as Industry 4.0. This process, the concept or the term were also controversial at the beginning, rejected as marketing or questioned as to their meaningfulness with the reference "we've had it all before". The promoters Wahlster and Kagermann, who are not visible in 'Industry 5.0', have certainly contributed to its success and such personalization seems difficult at the moment due to the current constitution of the new commission. It also remains to be seen whether the public and target groups in Germany will respond positively to the new term 'Industry 5.0' after the debate about 'Industry 4.0', which is certainly not yet over. Researchers will be watching this with interest. However, the term 'Industry 5.0' is in the world, the EU Commission will continue on this path of discourse and the need to discuss the topics mentioned is evident. Companies as actors in societies, whether German or European, need such terms in order to make themselves heard in the discourse and also to be able to absorb and process impulses from their environment in exchange with other actors. It seems reassuring that a new term such as 'Industry 6.0' is not on the horizon.

Literature

Banholzer, V.M. (2023). Industry 5.0 as a social extension of Industry 4.0? The EU's industrial policy attempt to integrate social issues conceptually and communicatively. In: Schmidt, C.M., et al. (eds) Social issues in corporate and business communication. Springer VS, Wiesbaden. https://doi.org/10.1007/978-3-658-40705-6_1 (Retrieved: 17.09.2024).
Banholzer, V. M. (2021). Is 'Industry 4.0' the same as 'Industry 4.0'? The importance of cultural contexts for international business communication: A comparison of technology terms in Germany and Norway. In: Matrisciano, S., Hoffmann, E., Peters, E. (eds) Mobility - Economy - Communication. Springer VS, Wiesbaden. https://doi.org/10.1007/978-3-658-32370-7_5 (Retrieved: 17.09.2024).

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