India SME’s development in industry 4.0 and connected machines: Status and what next

Abstract

The incumbent government of India aims to boost the GDP of the manufacturing sector from 17% to 25% by 2025. In line with this dream, Make in India was launched in 2014 with a focus to boost the manufacturing sector. At present 100% FDI in contract manufacturing and 74% FDI in defense manufacturing is allowed, to encourage these sectors to grow. To reach such high levels of productivity, the manufacturing sector is required to adopt new technologies. Industrial IoT (Internet of Things) within the premise of Industry 4.0 promises the efficiency gains for the manufacturing sector that the country envisages. Industrial IoT or IIoT refers to a system of inter-connected machines that can be leveraged to monitor, collect and exchange data. The collected data can be further analyzed to generate business insights. As per a study conducted by consulting firm Zinnov on among around 1200+ public listed companies, 35% have adopted Industry 4.0. However, most organizations are still in the nascent stages of adoption of Industry 4.0. Even for organizations that have adopted the new technology, it is mostly used for monitoring purposes. India has 75 million+ small and medium business (SMBs) making it the second largest base of SMBs in the world. This presents a significant market for the adoption of new technologies. However, only about 50K of these have adopted some form of IOT based technological solutions.