Australia risks falling behind in Industry 4.0 technologies

15 March 2020 5 min. read

While a significant portion of Australia’s business environment appears to have familiarised itself with cloud technology, few have moved beyond this “gateway” technology into more advanced technologies such as internet of things (IoT), artificial intelligence (AI) and robotic process automation. 

In a new report by KPMG, the firm’s researchers challenge the growing complacency around digitalisation and the conception that by now most businesses are familiar with the concept of the fourth industrial revolution, also known as Industry 4.0. 

Since industrialisation in the 18th century, humankind has experienced four technology-led revolutions. Each has had a profound impact on society, kicked off by steam enabling mechanical production, followed by electricity enabling mass production and the third tech-driven industrial revolution, the emergence of computers and digital systems.

Familiarity with the fourth industrial revolution

A term imported from the United States and Germany, Industry 4.0 refers to the advent of technology such as cloud, internet of things, artificial intelligence, blockchain, 3D printing, robotics, virtual reality, and a wide variety of others.

However, KPMG highlights that the term is not only a label for these technologies, but in a broader perspective refers to a sea of structural and operational change across businesses. “Industry 4.0 represents a fundamental change in the way we live, work, and relate to one another,” states the firm in its report. 

Fundamental change

“Business disruption is the most apparent consequence of Industry 4.0, while others include evolutions in innovation & productivity, changes in security & conflict considerations and considerations of ethics and identity.”

The report also points out that the high costs needed for embracing Industry 4.0 space might accentuate the existing wealth gap across the globe, while also threatening to worsen unemployment levels at first. The skills required in the workplace are evolving, and economies will need time to adapt to these changes.

Maturity in different tech segments

Industry 4.0 is also challenging the current regulatory frameworks in place globally, introducing technological capabilities in the monitoring and compliance process. Lastly, Industry 4.0 is sparking collaboration across disciplines and technological spheres, creating transformational hybrids and fusions.


A survey of Australian business leaders has found that less than half have a good understanding of Industry 4.0 and its implications. Just under 10%, meanwhile, have never even heard of the term before, indicating the distance that is yet to be covered by the advent of technology.

This mixed bag of results is reflected in the maturity of organisations in terms of adopting Industry 4.0 technologies. KPMG devised a scale between 1 and 5 to rank organisational maturity, with a score of 1 indicating that the technology has not been adopted and a strategy to adopt it has also not been devised as of yet. A score of 5, meanwhile, denotes that an organisation is on the cutting edge of integrating with the specific technology, with plans for its implementation in the short, medium and long terms.

The average score for businesses in cloud computing, for instance, was just under 4, but after that, internet of things ranked second with a score of just 2.7, highlighting the large gap between cloud and the rest.

Australia’s cloud market is growing rapidly, with Boston Consulting Group (BCG) estimates placing the market at a value of $11 billion by 2023. However, KPMG describes cloud computing as a “gateway,” often used as a means to cut costs and improve efficiency and security, which can subsequently facilitate further investment in other technologies.

Purpose for adopting technology

Artificial intelligence, robotic process automation and robotics round off the top five, with nanotechnology enjoying the lowest level of maturity of the Industry 4.0 technologies taken under scrutiny.

Organisations appear to have developed an idea of where they plan to deploy these technologies, with most opting to use them to improve customer experience. Increasing productivity, product and service innovation and cost reduction followed closely as motivations for adoption.

Australia risks falling behind

According to the researchers, the fourth industrial revolution represents a “multi trillion dollar opportunity” for the Australian market. For example, the combination of internet of things and artificial intelligence has the potential to dramatically accelerate the benefits of digital transformation and data exchange for consumer, enterprise, industrial, and government market segments.

That said, while awareness of the underlying technologies is high among Australian executives, their readiness is low. In contrast, economic superpowers China and the US have a significant strategic focus on investing in these technologies. “Australia risks being left behind over the next decade unless it addresses issues relating to awareness and intent to invest,” the authors conclude.