In collaboration withEY
For many years, the transformation towards Industry 4.0 has focused on the merging of clever technologies such as AI, cloud computing, IoT, robotics, and digital twins. Industry 5.0 signifies a crucial transition from merely integrating new technologies to scaling and orchestrating them effectively. The aim of this interconnected network of technologies in Industry 5.0 becomes more refined: to enhance human capabilities rather than only automating tasks, while also promoting environmental sustainability.
Industry 5.0 has brought forth a dramatically new style of collaboration among humans and machines, one that breaks down data silos and optimizes infrastructure, operations, and resource utilization to challenge traditional business models and generate innovative forms of enterprise value. However, without diligent tracking of value creation, investments might be squandered on marginal efficiency improvements rather than on strategic expansion.
“To harness the advantages of Industry 5.0, businesses must shift their focus from merely cutting costs and improving efficiency to emphasizing growth, resilience, and human-centered results,” states Sachin Lulla, EY Americas leader in industrials and energy transformation. “This calls for not just embracing new technologies, but also adopting novel working methods—where humans and machines work together, and value is assessed not just in savings, but in newly generated opportunities.”
A survey conducted by MIT Technology Review Insights involving 250 industry leaders globally shows that the majority of industrial investments still aim at achieving efficiency. While the data indicates that human-focused and sustainable applications deliver greater value, they remain underfunded. The research indicates that many organizations are not fully capitalizing on the potential value of Industry 5.0 due to a combination of:
• Cultural, skill, and collaboration obstacles.
• Short-term and misaligned technology expenditures.
• Use-case prioritization that emphasizes efficiency over growth, sustainability, and well-being.
According to research from EY and Saïd Business School at the University of Oxford, the challenge in achieving Industry 5.0 transformation is not merely about remedying technological issues; it also involves strengthening human-oriented components such as strategy, culture, and leadership. Corporations are making significant investments in digital transformation, but often not in ways that fully unlock the human potential inherent in Industry 5.0.
“We’re not simply engaging in digital efforts for their own sake, which I refer to as ‘chasing the digital fairies,’” remarks Chris Ware, general manager of iron ore digital at Rio Tinto. “We need clarity on which projects we pursue and the reasoning behind them. Each sector has its own specific roadmap to deliver optimal value.”
This material was created by Insights, the custom content division of MIT Technology Review. It was not authored by the editorial team of MIT Technology Review. It was researched, created, and written by human authors, editors, analysts, and illustrators. This encompasses the formulation of surveys and data collection for surveys. Any AI tools utilized were confined to secondary production phases that underwent thorough human examination.
