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Industry 4.0: Where the U.S. and EU could lose

Around the world, companies are automating their manufacturing systems more and more, including migrating toward “smart factories.” Smart factories embrace Industry 4.0 practices such as using cyber-physical systems to monitor and control production and the use of sophisticated analytics to optimize efficiency. Over the last five years, Industry 4.0 — commonly referred to as the fourth Industrial Revolution — has transitioned into a global phenomenon with measurable impact on many industrial and non-enterprise operations, businesses and global economies.

According to PwC’s fourth annual Industry 4.0 Global Digital Operations Study 2018, APAC is leading the way in digitization. Compared to other global regions, APAC is the most digitally advanced and is emerging as the fastest adopter of digital operations. Close to 20% of companies in the region are adopting bleeding-edge technology in order to digitize manufacturing and automated systems, followed by the Americas with 11% and 5% in EMEA.

This may seem surprising, since advancements resulting from the Industry 4.0 and IoT movements are largely driven out of EMEA and the U.S. This prompts the obvious question: “Why are the regions that are generating the majority of these technological advancements not the regions that are adopting them most?”

The answer is clear. Industrial infrastructure has long existed in the more mature economies of Europe and North America. These operational networks were built long before the Industry 4.0 phenomena and over time have become non-homogenous and old. Companies cannot simply rip and replace manufacturing, control and security infrastructures to adopt the newest in automation and IoT technology. Nor can they easily modernize these systems with Industry 4.0 technologies.

APAC companies on the other hand, according to the report, have introduced digital products and services at a much faster rate than their counterparts in the other global areas — the result of the region’s young, tech-savvy corporate managers’ enthusiasm to embrace digital technologies, as well as soaring compensation and production costs that are forcing Asian companies to digitize key operations processes to maintain competitiveness.

And while companies within North America and Europe are feeling the pressure to speed their course, they are taking a slower approach to Industry 4.0, throttled in part by an acute awareness of its implications for new cyber-requirements for effective cybersecurity.

In the race to implement Industry 4.0 technologies, organizations understand they cannot overlook cybersecurity. Cybersecurity is not simply a characteristic that can be added to the long checklist of nice-to-haves. It is not a technology that can be bought and added to a system long after implementation. This is a misconception that has led to critical consequences for insecure systems throughout the internet. Cybersecurity is a design principle that should be considered early on and should pervade all aspects of the system produced. And whether it’s built into the system from the very beginning or incorporated as a part of the evolution to Industry 4.0, cybersecurity should be regarded as an ongoing process that allows for adjustments in the face of new threats.

Deciding where to start is often the struggle for organizations that are integrating Industry 4.0 technologies into existing legacy systems with their own cybersecurity challenges. There are a number of steps organizations can take in order to secure today’s intricate and complex industrial systems, and achieve higher levels of visibility and cyber-resiliency:

  • Assess where your organization is in terms of cybersecurity maturity and defense in depth measures. Then create a plan to proactively address where you fall short.
  • Don’t overlook the basics, like inventorying all of your industrial network assets and monitoring your system in real time for threats and risks.
  • Educate your team on industrial networking and cybersecurity best practices. Consider reading widely used reference documents like those available from the Industrial Internet Consortium.
  • If your Industry 4.0 implementation includes shared cloud infrastructure, be sure to include data integrity and data confidentiality cybersecurity measures within your cybersecurity protocols.
  • Remember that cybersecurity is an ongoing process. Put in place teams and processes that will help your organization achieve continuous improvement.
  • And finally, review your incident response plan and do practice drills so the organization is ready for when a significant security attack or incident occurs.

It is inevitable that industrial organizations within North America and Europe will continue to charge forward with implementing Industry 4.0 and IoT technologies. It’s the dawn of a new age of automation and these regions are laboring to maintain their lead. The winners will be those who embrace security as a critical component of technology planning.

All IoT Agenda network contributors are responsible for the content and accuracy of their posts. Opinions are of the writers and do not necessarily convey the thoughts of IoT Agenda.

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