Digitization of the manufacturing sector across the EU: assessing readiness for industry 4.0

Abstract

Industry 4.0 is a concept that represents the adoption by industrial companies of techniques and processes allowed by digitization, cloud computing, the internet of things and big data to gain competitive advantages in domestic and global markets. Measuring how the manufacturing sector is adopting Industry 4.0 is challenging, given that there is not a closed definition of the term and that the collection of information is not specifically directed to Industry 4.0 concepts. Recognizing these difficulties, the present study measures the presence of the factors that characterize Industry 4.0 across EU countries. The analysis provides evidence that the existence of a digital infrastructure combined with the analytical capabilities to deal with big data emerge as the two dimensions that show the readiness for Industry 4.0 in each country. At EU level, five homogeneous groups of countries were found, showing large disparities across countries. The implementation of the single digital market strategy with regard to the manufacturing sector demands the collection of more detailed information on Industry 4.0.