Industry 4.0 adoption doubles among Indiana manufacturers in a year

More than 40 percent of Indiana’s manufacturing companies successfully implemented Industry 4.0 technologies in 2021, more than doubling the number that had reported that a year earlier, according to a recent Conexus Indiana report. The advanced manufacturing and logistics (AML) industries are considered the backbone of Indiana’s economy. Indiana manufacturers account for more than $100 billion of the state’s economy and employ 17 percent of the state’s workforce. The industry is at a crossroads, the report holds — challenged to adopt smart technologies and methods to increase its competitiveness. In 2020, Conexus Indiana and the Indiana University Kelley School of Business Center for Excellence in Manufacturing launched an annual survey to measure Indiana industries’ readiness and early adoption of Industry 4.0 technologies. That study provided a baseline for the follow-up study in 2021, which found progress on several fronts. For instance:

• In 2020, about 20 percent of respondents indicated they had implemented or piloted an Industry 4.0 technology; in 2021 that number increased to 43 percent of companies.
• The number of companies with technology adoption budgets rose from 16 percent to 29 percent year-over-year, and those with strategic roadmaps for technology adoption rose from 12 percent to 23 percent.

Budget restrictions, lack of internal skill and integration challenges with legacy systems were obstacles to Industry 4.0 adoption that were identified in the first study. The report notes that a state-funded grant program, the Manufacturing Readiness Grants program, was made available to Indiana manufacturers willing to make capital investments to integrate smart technologies and processes following the budgetary constraints identified as a top obstacle. While budget constraints still remain a top obstacle, the report found that the state program “was likely a significant contributing factor to an increase in companies now budgeting for technology adoption (16 percent in 2020 to 29% percent in 2021).”

The study also provides a look at manufacturers’ response to the pandemic since the first study closed the same day the state confirmed its first case of COVID-19 and the second study started more than a year into the economic crisis. While 35 percent of respondents said the pandemic slowed their investments, 17 percent reported that it pushed them to move faster and another 2 percent said it significantly accelerated investments.

Conexus Indiana recommends continuing momentum through a new statewide initiative focused on bolstering data infrastructure and the effective use of manufacturing data through big data analytics, artificial intelligence/machine learning, and other emerging technologies.

The full report is available for download here.