Time to Accelerate in the Race Toward Industry 4.0

Time to Accelerate in the Race Toward Industry 4.0

          
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Time to Accelerate in the Race Toward Industry 4.0

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    The Lack of Qualified Employees Is the Top Challenge

    Industry 4.0 is having a significant impact on the industrial workforce. Because Industry 4.0 requires fundamentally new skills, there have been job losses in some work categories (such as manufacturing and maintenance) and gains in others (such as IT). Reflecting this transition, data management, data security, software development, programming, data science, and analytics are among the most desirable Industry 4.0 skills in both Germany and the US. (See Exhibit 3.)

    exhibit

    The extent to which companies benefit from Industry 4.0 will depend on how successfully they build and manage newly skilled talent pools. Respondents recognize the challenge: 40% of German companies and 35% of US companies regard the lack of qualified employees as a major (“big” or “very big”) challenge. (See Exhibit 4.)

    exhibit

    To close the Industry 4.0 qualifications gap, German companies appear to be considering an approach that is less aggressive than that of US companies. Consistent with the constraints imposed by Germany’s strict labor regulations, almost two-thirds (64%) of German respondents say that they will focus on continuing education to ensure that their current employees are qualified for Industry 4.0. (See Exhibit 5.) They place much less emphasis on occupational retraining (15%) and recruitment of new talent (20%). In contrast, approximately half (48%) of US respondents say that they will focus on continuing education, while about one-quarter will focus on occupational retraining (27%) and hiring new talent (25%).

    exhibit

    By broadening and intensifying their efforts to educate employees internally and train them on the job, companies can facilitate their workforce’s transition to Industry 4.0. However, while German companies’ focus on internal education may help maintain the employment of the current workforce, it will not be sufficient to meet the skill requirements of Industry 4.0. The critical Industry 4.0 jobs—for example, for data managers and scientists, software developers, and analytics experts—require skills that are fundamentally different from those that most industrial workers possess today. To close such skill gaps, German companies need to place a greater emphasis on tapping into the global pool of digital talent.

    A study that BCG conducted last year on the future of work in Industry 4.0 suggests that companies’ concerns about finding qualified talent are well founded. (See Man and Machine in Industry 4.0: How Will Technology Transform the Industrial Workforce Through 2025?, BCG Focus, September 2015.) Our detailed modeling forecasts a net increase of approximately 400,000 jobs in Germany from 2015 through 2025. This analysis indicates that approximately 600,000 German manufacturing jobs will be lost during the next ten years. But the decline will be more than offset by the need for approximately 1 million new Industry 4.0 jobs in areas such as software development, advanced analytics, human-machine interaction, IT solution architecture, and user interface design. There will be demand for approximately 200,000 new highly skilled workers in IT, analytics, and R&D roles, as well as the creation of approximately 800,000 new jobs resulting from revenue growth opportunities. Design tasks, data analytics, and management of network processes will replace operating machines and moving objects as the most important aspects of industrial job profiles.

    The survey found that IT and software development skills ranked as the most desirable skills for Industry 4.0. This result is consistent with our previous modeling of the evolution of Germany’s industrial workforce from 2015 through 2025, which indicated that demand for workers with competencies in IT and software development will increase the most. The modeling also found that the number of IT and data integration jobs in Germany will nearly double: 110,000 jobs will be added. Within this job category, growth in demand for industrial data scientists—one of the roles created by Industry 4.0—will be the highest: approximately 70,000 new jobs will be added. Industrial data scientists extract and prepare data, conduct advanced analytics, and apply the findings to improve products or production. Industry 4.0 will also require workers with programming skills, including the ability to use both statistical and general-purpose programming languages. The modeling estimated that 40,000 new jobs will be created in Germany for such Industry 4.0 roles as IT solution architect, user interface designer, and robot coordinator.