To estimate how Industry 4.0, as represented by the ten use cases, will affect the evolution of Germany’s industrial workforce from 2015 through 2025, we examined a number of scenarios for two variables: the additional revenue growth generated by these technological advancements and their adoption rate. (See Exhibit 2.) The Boston Consulting Group’s proprietary quantitative model can also be used to analyze the implications of Industry 4.0 for the workforce of specific companies.
Manufacturers can generate revenue growth by taking one or more routes:
- Adopting more flexible production lines, robotics, and 3-D printing to offer products with higher levels of customization
- Implementing innovative business models, such as machines as a service, to tap into new markets
- Deploying augmented reality in the field to expand after-sales service and to develop new services
- Expanding their efforts to meet increased demand for Industry 4.0 technologies, such as autonomous robots
In all of the scenarios, the adoption rate of technological advancements will lead to significant productivity gains, thereby reducing the number of employees required to achieve a given level of output. Although some jobs will be lost, the level of cooperation between humans and machines will increase significantly.
In the most likely base-case scenario, we believe that German companies would use Industry 4.0 to generate additional growth of 1 percent per year and that the adoption rate of these technological advancements would be 50 percent. In this scenario, Industry 4.0 would lead to a net increase of approximately 350,000 jobs, representing a 5 percent gain when compared with today’s workforce of approximately 7 million people in the 23 manufacturing industries studied. A greater use of robotics and computerization will reduce the number of jobs in assembly and production by approximately 610,000. However, this decline will be more than offset by the creation of approximately 960,000 new jobs. The job gains will result from demand for an additional 210,000 highly skilled workers in IT, analytics, and R&D roles, as well as the creation of approximately 760,000 new jobs resulting from the types of revenue growth opportunities cited above.
In the base-case scenario, an examination at the level of specific categories of work and industries reveals a highly differentiated picture. (See Exhibit 3.) In general, demand in Germany will increase most strongly for employees with competencies in IT and software development. The number of jobs in IT and data integration will nearly double—110,000 jobs will be added, representing a 96 percent increase for this category. Jobs in R&D and human interface design will also increase by approximately 110,000.
As would be expected, given the importance of data in Industry 4.0’s use cases and business models, industrial data scientist will be the job function experiencing the highest growth—approximately 70,000 new jobs. The increased use of software and IT interfaces will also cause demand to surge for IT solution architects and user interface designers. As the deployment of robots becomes more common, manufacturers will need to create the new role of robot coordinator, resulting in an estimated 40,000 additional jobs.
Demand will decrease for workers who perform simple, repetitive tasks, because these activities can be standardized and performed by machines. Most of the job losses will result from the introduction of robotics on the shop floor and the computerization of routine jobs. Job losses will reach 120,000 (or 4 percent) in production, 20,000 (or 8 percent) in quality control, and up to 10,000 (or 7 percent) in maintenance. Routine cognitive work will also be affected; for example, more than 20,000 jobs in production planning will be eliminated. As discussed later, the replacement of labor by robots and artificial intelligence will likely accelerate
At the industry level, the expanding market for intelligent machinery will allow manufacturers of this equipment to add 70,000 jobs to their workforce, representing a 6 percent increase. By contrast, the introduction of robotics will limit job gains for the automotive industry and for fabricated-metals manufacturers.
Of all the use cases, we estimate that robot-assisted production will cause the largest net decrease in jobs in the relevant manufacturing industries, because the efficiencies it creates will allow manufacturers to significantly reduce the number of jobs on the shop floor. At the same time, robotics and other uses cases, including predictive maintenance and augmented reality, will also allow manufacturers to deploy new business models that promote job creation.