№ 7/2017

Ekon Ukr. 2017 (7): 22–37

INDUSTRIAL POLICY AND INNOVATION DEVELOPMENT

УДК 338.45:338.2:330.88

JEL:

VYSHNEVSKYI Valentyn¹, KNYAZEV Svyatoslav²

¹Institute of Industrial Economics of the NAS of Ukraine, Research ID : http://www.researcherid.com/rid/S-2417-2016 https://publons.com/researcher/1749980/valentine-vishnevsky/
OrcID ID : https://orcid.org/https://orcid.org/0000-0002-8539-0444
²NAS of Ukraine, Research ID : http://www.researcherid.com/rid/
OrcID ID : https://orcid.org/

SMART INDUSTRY: PROSPECTS AND CHALLENGES

The article examines the current trends in the development of production systems related to the implementation of the principles of the fourth industrial revolution and the transition to a smart industry.
The primary link of the smart industry – smart factory – is a cyber-physical production system that has the ability to monitor and control the performance of the machinery and production personnel through industrial Internet of things, as well as to use collected “big data” to more accurately adjust to consumers, increase labor productivity, improve the technological processes and product quality.
Within the smart industry system, smart factories are interconnected with researchers, developers, suppliers, distributors, consumers etc., through information and communication technologies, thereby forming a global digital platform to improve coordination and active participation of all partners in both the individual chains and whole networks of value creation.
The high potential of the smart industry as a smart factories’ network is confirmed by the practice of a number of well-known companies in the world. At the same time, the greatest windows of opportunities are opening to reduce the research and production cycle, decrease machinery downtime, reduce the cost of its maintenance and the costs of maintaining stocks, as well as to automate mental work.
Full implementation of the smart industry’s potential depends on success in overcoming barriers to its development: technical (problems with computer networks, their compatibility and security), economic (high costs of accumulation and renovation of digital capital, problems in the areas of employment and income, including those due to the changing nature of work and a sharp increase in the role of STEM personnel), institutional (problems with the formation of new organizational routines and generally favorable institutional environment).
If these barriers could be overcome, the overall prospects for the smart industry in the world look promising. In the next decade, productions, implementing industrial technologies of the Internet of things, can make up the majority of the global manufacturing.

Keywords:smart industry, Industry 4.0, smart factory, industrial Internet of things, cyber-physical production systems, information and communication technologies, “big data”

Article original in Ukrainian (pp. 22 - 37)	Download	Downloads :285
Article original in Russian (pp. 22 - 37)	Download	Downloads :419

The article was received by the Editorial staff on February 15 , 2017

References
1. Zbarazska L.O. Neoindustrializatsiya v Ukraini: kontsept natsional’noi modeli [Neoindustrialization in Ukraine: concept of national model]. Ekonomika promyslovosti – The Economy of Industry Journal, 2016, No. 3, pp. 5–32 [in Ukrainian].
2. Lazi H., Fettke P., Kemper H.-G., Feld T., Hoffmann M. Business & Information Systems Engineering, 2014, Vol. 6, No. 4, pp. 239–242.
3. Schwab К. The Fourth Industrial Revolution. What It Means and How to Respond. Foreign Affairs, 2015, 12 December.
4. Industrial Internet of Things: Cybermanufacturing Systems. S. Jeschke, C. Brecher, H. Song, D. Rawat (Еds.). Switzerland, Springer International Publishing, 2017.
5. Evans P., Annunziata M. Industrial Internet: Pushing the Boundaries of Minds and Machines. Fairfield, CT, General Electric Co., 2012.
6. Yin S., Kaynak O. Big Data for Modern Industry: Challenges and Trends. Proceedings of the IEEE, 2015, Vol. 103, No. 2, pp. 136–143.
7. Hu H., Wen Y., Chua T.-S., Li X. Towards scalable systems for big data analytics: A technology tutorial. IEEE Access, 2014, Vol. 2, pp. 652–687.
8. Baily M. N., Manyika J. Is Manufacturing “Cool” Again? Project Syndicate, 2013, available at: www.project-syndicate.org/commentary/skills-and-workers-in-the-new-age-of-manufacturing-by-martin-n--baily-and-james-manyika?barrier=accessreg.
9. Auschitzky E., Hammer M., Rajagopaul A. How big data can improve manufacturing. McKinsey & Company, 2014, available at: www.mckinsey.com/business-functions/operations/our-insights/how-big-data-can-improve-manufacturing.
10. Jagadish H. V., Gehrke J., Labrinidis A. et al. Big Data and Its Technical Challenges. Exploring the inherent technical challenges in realizing the potential of Big Data. Communications of the ACM, 2014, Vol. 57, No. 7, pp. 652–687.
11. Manyika J., Chui M., Bughin J. et al. Disruptive technologies: Advances that will transform life, business, and the global economy. McKinsey Global Institute, 2013.
12. Holtgrewe U. New new technologies: the future and the present of work in information and communication technology. New Technology, Work and Employment, 2014, Vol. 29, No. 1, pp. 9–24.
13. Davisa J., Edgarb T., Porterc J., Bernadend J., Sarli M. Smart manufacturing, manufacturing intelligence and demand-dynamic. Computers and Chemical Engineering, 2012, Vol. 47, pp. 145–156.
14. Bughin J., Manyika J. Measuring the full impact of digital capital. McKinsey Quarterly, 2013, July.
15. Moore G. Cramming More Components onto Integrated Circuits. Proceedings of the IEEE, 1998, Vol. 86, No. 1, pp. 82–85.
16. Nelson R., Winter S. Evolyutsionnaya Teoriya Ekonomicheskikh Izmenenii [An Evolutionary Theory of Economic Change]. Moscow, Delo, 2002 [in Russian].
17. Chang, H.-J. Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism. New York, Bloomsbury Press, 2008.
18. Brynjolfsson E., McAfee A., Spence M. New World Order: Labor, Capital, and Ideas in the Power Law Economy. Foreign Affairs, 2014, Vol. 93, No. 4.
19. Karabarbounis L., Neiman B. The Global Decline of the Labor Share. The Quarterly Journal of Economics, 2014, Vol. 129, No. 1, pp. 61–103.
20. Basu K., Bourguignon F., Lin J.Y. A New Year’s Development Resolution. Project Syndicate, 2016, available at: www.project-syndicate.org/commentary/update-development-policy-inequality-by-kaushik-basu-et-al-2016-12.
21. Kochhar R. A Global Middle Class Is More Promise than Reality. Pew Research Center, 2015, available at: www.pewglobal.org/2015/07/08/a-global-middle-class-is-more-promise-than-reality/.
22. Reiman M., Ruckriegel C. (Lead authors). Road2CPS. Priorities and Recommendations for Research and Innovation in Cyber-Physical Systems. Steinbeis-Europa-Zentrum, Steinbeis-Edition, 2017.
23. Duhigg C., Bradsher K. How the U.S. Lost Out on iPhone Work. The New York Times, 2012, Januari 21, available at: www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html?_r=1&hp=&pagewanted=all.