Machines communicating with each other, massproduced products that can be individually configured, robots working alongside or even completely replacing employees ...


“Industry 4.0” has many facets – and far-reaching effects on both companies and employees. In an interview, scientist Prof. Michael Schenk, chairman of TÜV SÜDProf. Axel Stepken and futurologist Hazel Henderson highlight various aspects of the “fourth industrial revolution” and explore the opportunities and challenges presented by the digital changes.



16. April 1953 / Roßlau

Michael Schenk has been director of the Fraunhofer Institute for Factory Operation and Automation IFF since 1994. He is also director of the Institute for Logistics and Material flow engineering at the University of Magdeburg.
The expert for factory planning and logistics is considered to be one of the drivers of the digitization of production and logistics processes. He has been chairman of the Fraunhofer Group for Production and a member of the presidential council of the Fraunhofer Gesellschaft since 2013.
The interview first appeared in the special edition “Trends for Industry 4.0” of the Fraunhofer Gesellschaft.

»The protection of personal data of customers and employees, known as cyber security, will play a major role and will have to be carefully treated and facilitated in the future.«

Professor Schenk, to what extent will Industry 4.0 transform the way that industrial companies work and think?

a / On the one hand, consumers and producers will be more digitally interconnected in the future, thus giving rise to a high level of product customization. On the other hand, demand will only exist for products combined with digitized services related to production. Digital added value will exceed pure product value, and the creative and work processes in product design, development and production will merge. This shift will be rapid and sweeping and increasingly facilitated by artificial intelligence tools. Expediently collecting and analyzing all of the data in the value chain, i.e. big data, in near real-time enables us to boost workforce and energy productivity.

q / Companies are using cyber physical systems to customize more products. Customized customer-specific products can then be manufactured more cost effectively than before. Where are the major technological hurdles and where is there need for research?

a / The protection of personal data of customers and employees, known as cyber security, will play a major role and will have to be carefully treated and facilitated in the future. In this context, I would like to draw attention to Industrial Data Space, an initiative launched by Fraunhofer Gesellschaft. Researchers are working in a funded project on reference architecture for secure data spaces and its implementation since companies’ retention of sovereignty over their data is the prerequisite for Industry 4.0.
There is also a completely different kind of hurdle: If we are to make custom products on equipment from different manufacturers, then these machines have to be able to communicate with one another. Common standards are still nonexistent even for this lowest level of “smart connectivity”. Industry 4.0 has sparked discussion on this issue, at least. Things get even more complicated when, for instance, semantic “understanding” and autonomous deduction of consequences for subsequent manufacturing operations are required in addition to pure data transmission. We are only at the very beginning of a development here, which still requires a great deal of research.

q / Small and medium-sized companies often still have problems identifying the potential of Industry 4.0. How can we make them aware of these opportunities so that they stay abreast of global developments?

a / Small and medium-sized companies often do not have the human resources, let alone experts, to deal with this paradigm shift extensively over the long term. Building and expanding government subsidized model factories and learning platforms can provide valuable support here. Special attention should also be paid to technical trades. The concept of “Trade 4.0” has not been intro duced but it plays an important role in implementation in the system and supplier network. The paradigm shift aspired to will only occur when every institution with a stake in the overall value added can partake of and participate in “4.0”.

q / This change entails numerous challenges for employees. What are the central issues?

a / People will remain the focal point in Industry 4.0, too. We can increase employees’ skills by systematically introducing digital learning and assistance systems and by developing individualized training and coaching programs. We increasingly need digital tools. Physiological stresses can be reduced by human-robot collaboration, for instance, while psychological stress can be minimized by adaptive and visualizable handling of data streams, for instance.

q / What measures is Fraunhofer taking to shape jobs of the future?

a / Related activities are wide-ranging and geared toward manufacturing systems with specific work­stations. They are chiefly focused on collaborative humanrobot systems, user interfaces for different equipment and varied forms of assistance systems.

q / How is Fraunhofer helping companies make the switch to Industry 4.0?

a / We are helping companies in a wide variety of ways, from performing “Industry 4.0 checkups” in companies and organizing industrial forums together with professional associations and chambers up through building demonstrators such as model factories and learning platforms. Of course, projects are being completed with many partners.

q / “Made in Germany” stands for quality German engineering. How do German industrial companies stack up against their international competitors with respect to Industry 4.0?

a / Implementing Industry 4.0 enables industrial enterprises to offset comparatively high unit labor costs and energy costs in capital-intensive business. This could be termed “digital productivity” and de scribes the level of effciency with which a company handles its own and third party data in its creative and value-added processes. With Industry 4.0, we will strengthen and expand our international competitiveness in machinery and equipment manufacturing. 



23. August 1958 / Essen

As Chairman of the Board of Management of TÜV SÜD and Chairman of the Association of Technical Inspection Agencies [”Verband der Technischen Überwachungsvereine”, VdTÜV], Axel Stepken is one of the most important representatives of technical security in Germany.
The 58 year-old electrical engineer initially held several manage- ment positions at ABB. He joined TÜV SÜD as member of the Board of Management in 2002 which he has chaired since 2007.
Axel Stepken also brings his expertise to the Presidium of the Association of German Engineers [“Verein Deutscher Ingenieure”, VDI] and is responsible for ASEAN in the Asia-Pacific Committee of German Business.

For many companies, Industry 4.0 is currently little more than a catchword. This will change rapidly in the coming years. Where do you see the greatest challenges of digitization?

a / Digitization opens up new business models to companies and at the same time radically revolutionizes manufacturing processes as we know them. Machines, resources and people are networked in the smart factory, which makes production more flexible and efficient. As automation increases, innovation cycles are becoming shorter and shorter. In order to remain viable and to remain successful on the marketplace, companies should drive digital change as quickly and actively as possible. Those companies that are dynamic and innovative will be able to position themselves as pioneers. At the same time, we must deal with equally diverse challenges, as digitization introduces a new category of risks for companies.

q / Which risks are you referring to?

a / Security will become a key requirement. With increasing networking comes an increasing risk of cyber attacks and espionage. This affects all companies, not just international corporations. Our entire economy as well as large parts of our infrastructure will become more vulnerable through digitization. Two years ago, TÜV SÜD simulated a virtual waterworks of a small German town in a honey net project. Within eight months there were more than 60,000 attacks on this relatively insignificant waterworks from servers in 150 countries with partially hidden IP addresses. At least three attacks got far enough that operating conditions could have been changed in a real waterworks.

q / Comprehensive and established security concepts exist for our analog world, in many of which TÜV SÜD played a decisive role. Does security need to be fundamentally redefined in Industry 4.0?

a / Yes, because the challenges facing security have changed fundamentally. Digitization has broken down important system boundaries. Enterprise IT and operational technology are growing together, closed production systems are now opening up. The more complex networks become, the more vulnerable they are to digital threats. There is, however, no alternative course to digitization. In order to minimize the new security risks, a greater awareness for IT security with companies is essential.

»We want to actively shape digitization, by developing the right products and solutions for the challenges of our customers«

q / Prevention thus acquires an entirely new significance. How can companies such as TÜV SÜD support its customers?

a / We want to actively shape digitization, by developing the right products and solutions for the challenges of our customers. Virtual testing methods for highly automated driving and certifications in data protection are just two concrete examples. We aim to be able to test and evaluate increasingly digitized, automated and networked processes. The growing pace of innovation challenges us to react very quickly and proactively in the future. What is more, digitization also has a high economic value for TÜV SÜD. We have been setting the right course for this over the past years.

q / What does that actually mean?

a / In 2016, we invested heavily in developing IT expertise in order to strengthen our digital profile – including two Centers of Excellence in Munich and Singapore. Here we are working hard on our solutions for system and data analysis, industrial cyber security, functional security and other topics. For example, we can test the security set-up of companies with cyber security checks, identify gaps in security and at the same time advise companies on how to close them. On top of that, we are one of the first providers worldwide to carry out certifications according to the international standard IEC 62443. Last year, we awarded Siemens the first IEC 62443-4-1-based certification for a complete smart production plant. We create confidence in new technologies by combining our many years of technical security experience with our expertise in IT security. With this approach, safety, security and reliability are combined to form a successful three-pronged concept for our customers.

q / Digitization thrives on automation. Can security also be automated?

a / Unfortunately, full automation is not possible. Indeed, systematic risk management will become increasingly important in the future to protect itself. It is important to take the overall process and the company as a whole into consideration. Only a fully integrated security approach can meet these requirements. The line between IT and the operational technology has been erased. In order to secure the success of their digital production, companies must combine safety, that is, technical operational safety, and security, that is, IT security. The trend is towards convergent cyber security models, which apply an integrated approach to systems, taking into consideration suppliers of hardware and software as well as system integrators.

q / What do you expect of the legislator in terms of new security standards for Industry 4.0?

a / We need binding standards, preferably transnational, which must then also be checked and certified. Let’s take as an example the German IT Security Act that came into force in 2015. So far, it applies only to critical infrastructure operators such as energy and telecommunications. However, since Industry 4.0 affects all industries, comprehensive guidelines for IT security and data protection are required. It is important to us that Industry 4.0 works securely. This is why we want to actively help shape these regulatory proceedings.

q / From standards to people: What role does digital know-how play?

a / A very important one. After all, digital technology must be controlled by people. TÜV SÜD offers a wide range of training measures and activities to achieve this. At the same time, we are in talks with universities to ensure that digitization topics become an integral part of basic training of relevant academic professions such as engineering. We are supporting companies to raise awareness in the area of security and to be alert for risks. The majority of threats are generated internally. This can be targeted manipulation of employees but also quite simply misconduct such as the irresponsible handling of USB sticks and other devices. Only those who know the dangers can take appropriate measures.

q / Taking a look into the future: Do you have a vision of the next generation of the smart factory?

a / I am sure that the smart factory of the future will control itself significantly more than is the case today. Depending on the actual circumstances and individual requirements, it can reorganize the production process, and worksteps will be adjusted or aligned accordingly. A crucial question for the future is the role of human beings in these intelligent production networks. I am convinced that the experience of human beings will continue to play a central role. Digitization provides more opportunities than risks, also for the individual. I am therefore optimistic that the smart factory of the future will provide us with new freedom to make the world a more sustainable and better place to live.



Dr. h. c. Hazel Henderson
27. März 1933 in Bristol / GB

Entrepreneur and journalist, Hazel Henderson, has been dealing with the future of the world economy and the environment for over five decades.The 84-year-old was born in the UK and emigrated to the USA in the 1950s where she studied sustain- ability economics. In the following decades, Hendersen held leading roles in a number of NGOs.In 2004 Henderson set up her own media company Ethical Markets Media in Florida, which she still leads today.

Industry 4.0, the digital factory of the future, offers many opportunities but is also fraught with risks. Ms. Henderson what are your opinions on this?

a / The current public discussion share many parallels with the automation of the US economy, which I have been studying since the 1960s. Since then the view of many futurists like me was that this gave the opportunity for improving the conditions of workers and for society. We saw the vision of a leisure sector, with more people enjoying sports, travel, the arts and furthering their education. As automation advanced we saw many industrial jobs disappear and the need to maintain purchasing power to buy the cornucopia of goods from efficient machines and factories. Many, including economist Milton Friedman, called for Negative Income Tax, a guaranteed basic income. These policy proposals were less about charity and more about replacing many distributive bureaucracies while maintaining aggregate purchasing power in the economy.

q / The ideas of Friedman are making a comeback, for example in Oman or Finland.

a / Yes, I pursue that. But several experiments already in the 1970s found that people did not become lazy but instead improved their skills, invested in their small enterprises and became civic volunteers. Today, we see these debates resurface as Silicon Valley companies promoting the Internet of Things, for example, automated vehicles are challenged to take social responsibility for the unemployment their technologies cause. Traditional economics claims that there will always be equivalent numbers of new jobs, but recent trends disprove their assumptions.

»Security is becoming more important in new aspects, terrorism cyber crime, surveillance, loss of privacy and of course income security.«

q / Ms. Henderson, how important is the aspect of security for you?

a / Security is becoming more important in new aspects, terrorism cyber crime, surveillance, loss of privacy and of course income security. We see the backlash is the hype of the so called Internet of Things which I discussed in my article “The Idiocy of Things”.

q / What does this mean to you?

a / Some of the new technologies aren’t well thought out. One example: Many of the profit seeking sale of gadgets in advertising “smart homes” turned into inconveniences. Smart locks could be hacked by burglars. All this data became the product of many social media companies, which then sold this data to brokers, insurance companies and advertisers. This is why I called for an extension of habeas corpus, the English law from 1215 establishing ownership of one’s body. Today we need an Information Habeas Corpus so that we also own our brains and all our personal information.

q / When will we have factories under extensive cyber siege and industrial robots running amok?

a / I don’t anticipate factories with robots being besieged either by cyber hackers or angry unemployed workers. Instead, I see political movements with anger at dislocation and dispossession, more like the populism of today. Cyber crime will continue and go beyond hacking companies and government agencies to influencing elections. After the Stuxnet virus showed how such software can affect technical infrastructure, we will need international standards and agreements to safeguard vital infrastructure from cyber warfare.

q / Ms. Henderson, you made it very clear that you take a critical view of the Internet of Things and the spread of interconnectivity in factories. Let’s take a look at the more distant future: What do you anticipate of the next generation of smart factories and Industry 4.0?

a / Business models must evolve beyond earlier capitalism toward social responsibility, transparency and accountability. The likely future will be growth of cooperative enterprises which already employ more people globally than all profit making corporations combined according to the UN. These will be accompanied by worker-owned companies, worker inclusion in management as in Germany today. For-profit companies will continue also, but may be a smaller sector in many economies.