Is India Ready for Industry 4.0?


If the fourth industrial revolution is a given, then India needs to make sure that it has the right people and infrastructure in place to make the most out of it. ELE Times’ Soumyarendra Barik analyses India’s current positioning in the grand scheme of things and finds out whether or not, the country is ready for industry 4.0.

The industrial revolution of the 18th and the 19th century changed the world forever. It substituted human labour for machines, and gave rise to the first factories. Before that, people produced products either for their own consumption or for the consumption of their masters. But, with the increase in the number of factories, and rapid development in mechanisation, products for the first time were made for entire continents, let alone countries.

After almost two centuries since the world first witnessed the power of machines, today, we stand at a juncture where machines in harmony with other forces like the internet are on the path to give rise to a new kind of production industry altogether: Industry 4.0. India was unable to reap benefits of the massive production of commodities and capital during the first industrial revolution because it was still being ruled by the British.  And that saw India’s economy plummet.

However, gone are the days when India used to be one of the most unproductive markets, the reason of which was the rampant exploitation and loot during the British rule on India; today, India is the fastest growing economy in the world, and according to many economists, is set to take over the very country that ruled over it only 70 years ago.

However, over the last seven decades since India’s independence, and on the verge of booming into Industry 4.0, where exactly does India stand in the grand scheme of things? In short, is India ready to reap the benefits of the new industrial revolution this time around? In his acclaimed book, ‘A Whole New Mind’, Daniel Pink argues that Asia will be the hub of wonders in the future. One should however not forget that India is yet to become a major powerhouse in Asia. Its developed counterparts in South Korea, Singapore, and Japan already have a ready infrastructure that would allow them to realise the full potential of the fourth industrial revolution. Infact, India’s neighbour China has also made a name for itself on the global stage. Latest data shows that India is way behind the three developed nations and its neighbour in terms of industrial automation.

In terms of installed robot capacity in India’s factories, we see a rather worrying stat. For every 10,000 factory workers, there are only 3 installed robots. That is clearly not a figure that will allow you to usher into the fourth industrial revolution as amajor nation. There is however, some respite. Since 2017, the annual shipment of robots to India has been on a constant increase. Infact, annual shipments have been constantly growing at a healthy CAGR of 24 per cent. And it is being predicted that come 2020, India’s installed robot capacity will be twice as much than in 2017. In 2017, nearly, 3,000 robots were shipped to India, and by 2020 that could go up to 6,000. While these numbers are still modest to say the least, a growth is nonetheless always a welcome thing.

As of now, the automobile industry in India is the only industry that has shown good promise in terms of factory automation. The number of installed robots in the automobile industry is 58 for every 10,000 workers. Though still a modest figure, it is nearly 19 times more than the nation average of just three. The government has been pushing for more indigenous production and has been constantly pressuring factories and companies to manufacture in India wither by imposing high taxes on imports or by giving special incentives for local production. If that goes on the way it has been going on, India will take small but necessary and meaningful steps towards Industry 4.0.

While on the policy and capital front, India need not be worried about much, the biggest problem in India today remains its lack of a skilled workforce. The number of trained people that can understand the sophistication of the cutting edge robotic technology coupled with other technologies like the Internet of Things (IoT) and big data is far inferior compared to some other developing and developed countries.

According to consultancy firm KPMG, India currently has one of the worst number of formally skilled workforce. In South Korea, for instance, the percentage of formally skilled work force is 96 per cent, while in India, it is a meagre 4.7 per cent. China’s skilled workforce makes up for 24 per cent of its population, that is almost six times more than India.

Like Karl Marx predicted in his famous book The Communist Manifesto, humans were at the mercy of machines in the 19th century. That doesn’t seem to have changed a lot in two centuries. A key things still plague India’s chances of making the most out of Industry 4.0, the most prominent one being lack of formal training. While India seems ready to embrace the new industrial revolution, the government need to invest heavily in the country’s education system and bring the literacy rates to respectable number. Currently, India’s literacy rate is a shade more than 70 per cent. That surely has to change. Further, localisation of production should be promoted, and startups should be given enough freedom. It is only then that the fourth industrial revolution would bring about a meaningful change in the lives of Indians.