IR 4.0: The challenge of being myopic

I have written a number of articles relating to Industry 4.0 and how the Philippines can take advantage of this especially in certain industries where automation will be relevant. In particular, I shared the drivers of Industry 4.0 and also wrote about the readiness (if at all) of the country in terms of adopting technologies, and capabilities that would increase the output and productivity of companies.

Very recently, the Department of Trade and Industry (DTI) announced a partnership with data scientists to build the artificial intelligence (AI) industry road map. This road map, according to a DTI press release, is meant to include an analysis of the impact of AI on Philippine industries and workforce, as well as policy and program recommendations such as AI training programs and laboratories. With the objective of being an “AI powerhouse,” the agency is also looking into establishing a task force composed of academicians, government officials, and industry stakeholders for a more consultative approach.

While this is a noble step in laying the groundwork for the future, the approach is still very much myopic given that AI is not the only component when it comes to Industry 4.0. AI has a lot of interdependencies, and it is not the end-all, be-all, and cure-all. We can learn a lot from other mature countries who have embraced Industry 4.0 and see how their programs benefitted the country as a whole, from the entrepreneur all the way to the big family conglomerate.

In Italy, for example, the government spearheaded a program on Industry 4.0 a few years back wherein any organization, be it a small to medium enterprise or a large company, will be given fiscal incentives as and when it adopts technology or capabilities related to that.

The government allocated a budget through its economic agency and started to promote this across all their industries. With the success of this program, Italy, France and Germany combined forces to create the regional Industry 4.0 alliance in Europe. The same thing is also happening in the Association of Southeast Asian Nations (Asean), particularly in Thailand, which has also done a lot of work and mindshare in Industry 4.0. Malaysia, in a similar fashion, is also doing its share in this regard. The critical point here is in incentivizing business owners in adopting technologies, and how the policy guidelines allow for such, and how that framework would look like.

In the case of the Philippines, there is a lot of work that has to be done in this space, and especially as to how automation will impact the future of jobs and of the employees themselves. Will the Philippines lose businesses in favor of other neighboring countries because production capacity could be higher there compared locally? Will we be able to retain and sustain manufacturing plants if our processes are not as optimized? Remember that the Philippines as a country still compete with the rest of the world and we need to define our core value proposition in order to be relevant. This is where a broader and bigger perspective is much needed rather than a myopic view of what lies ahead. The opportunities available are vast and wide, and therefore it is but necessary to have a very strong strategy as far as strengthening the industries and workforce.

In fact, we are not restricted to just AI in Industry 4.0 because technically speaking, there are at least eight pillars of capabilities ranging from Internet of Things (think of sensors or those smart home devices you use that you connect to your wifi), to cloud computing, to AR/wearables (this is fun especially for the gamers), to 3D printing (yes we can print things already!), among others. A manufacturing company in the Philippines, for example, may opt to automate its production line with capabilities in robotics or packaging-related disruptive technologies, and you will then have a smart factory. This smart factory is aligned with Industry 4.0, and is not necessarily AI that is driving this.

These capabilities will disrupt a lot of traditional business here and government, through its trade and economic agencies, should find ways on how to address these, and not just create a roadmap. A clear strategy, armed with a sound comprehensive execution plan, will help in providing an overall approach to the various stakeholders that will be impacted by the 4th Industrial Revolution.

Kay Calpo Lugtu is the chief operating officer of Hungry Workhorse, a digital and culture transformation firm. Her advocacies include nation-building, education and financial literacy. The author may be reached at


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