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Industry 5.0: What It Mean and Its Benefits

by | Aug 22, 2022 | Industry

Digitalization in manufacturing has led to the fourth industrial revolution. Industry 4.0 or 4IR addresses issues within manufacturing through connectivity and data analytics to help companies gain competitive edges and stay ahead in the market.

Industry 4.0 is a term coined by German professor Klaus Schwab that refers to the current era of technological change. It is the idea of a world where the manufacturing sector and information technology are seamlessly integrated to create smart factories.

The 4th industrial revolution is characterized by the convergence of the physical, digital and biological spheres. It is driven by digital technologies and the convergence of three powerful forces:

  • The digitization of economic activities (the internet)
  • The globalization of trade (e-commerce)
  • The development of new technologies (AI and IoT)

The success of the fourth industrial revolution lies in a combination of technologies such as:

These technologies are used to increase efficiency and productivity levels in manufacturing processes. The 4IR brings together cyber-physical systems, smart machines, and cloud computing to create factories where people and machines can interact. With industry 4.0, factories become machine centers and work by exchanging data.

The worldwide market value of industry 4.0 was estimated at USD 70 billion in 2019. A CAGR growth of 17% is expected from 2021-2026. Hence the market share is expected to reach USD 210 billion by 2026.

It is estimated that industry 4.0 can: (Mckinsey and company)

  • Reduce inventory holding costs by 15-20%
  • Increase labor productivity by 15-30%
  • Reduce machine downtime by 30-50%
  • Increase throughput by 10-30%
  • Improved forecasting accuracy by 85%
  • Improve cost of quality by 10-20%

According to Mckinsey and company, industry 4.0 innovations are expected to create up to USD 3.7 trillion in value by 2025. These numbers indicate the significant impact this approach has and its growing importance.

The concept has been widely adopted in many sectors and keeps gaining ground across the globe. The biggest benefit of implementing this technology is a high return on investment.

As this technology improves the way businesses work, it also allows companies to remain competitive and equip their production lines for the future.

However, industry 4.0 also faces some criticism since it is more focused on automation and mass production to maximize profits while minimizing human involvement.

While Industry 4.0 is about automating processes, it somehow affects our society and how workers keep up with the changes. Hence, industry 5.0 is expected to redefine how people work, live, and interact with manufacturing processes while also taking society into account.

What is industry 5.0?

Industry 5.0 is a way of running businesses that utilize advanced technologies to empower humans and decrease stress for machine workers. It’s a revolution that will impact every sector, and the possibilities for businesses are endless.

The term industry 5.0 has gained momentum in recent years, partly because it aligns with a refreshing and alarming new view on business and economics. It emphasizes the importance of societal value, instead of profit.

Since the inception of robotics in the manufacturing environment, they have always performed dangerous, repetitive, physical, and monotonous tasks. But now with technological advances and connectivity, machines are getting smart and more connected.

While industry 4.0 aims at automating processes and reducing human involvement in the production line, the fifth industrial revolution aim at merging cognitive computing capabilities with human resourcefulness.

The new industry focuses on human and environmental well-being rather than just bottom lines. The business model uses the latest technologies to increase productivity and reduce stress.

The concept is the same as industry 4.0, except that the 5th industrial revolution aimed to create an environment where workers can thrive together. It promotes circular production models and supports technologies that help better use resources.

The process also aims to make industries more resilient to external shocks. Here are a few of its key features that will make industry of the future more competitive and more sustainable.

Features of Industry 5.0

Industries are keys driver of a country’s economy and prosperity. Societies are facing a big transition and to remain the engine of prosperity, industries need to lead the human, digital and green transitions. Here are the focus of industry 5.0:

  • Autonomous manufacturing
  • Focus on customer experiences
  • Hyper customization
  • Personalization
  • Responsive supply chain
  • Interactive product
  • Human-centric
  • Resiliency
  • Sustainability
  • Societal value
  • Craftsmanship
  • Collaborative robots

Why do we need industry 5.0?

Industry 5.0 refers to the transformation of industries from production-based to value-based, focusing on social and environmental benefits as well as profit-making.

These changes are accompanied by calls for greater emphasis on environmental and societal value, as is evident from ESG (environment, social, and governance), CSR (corporate social responsibility), and the Triple Bottom Line (people, planet, and profit).

By placing people and the planet first, Industry 5.0 is aiming to increase productivity, attract the best talent, and help make companies more resilient to external shocks.

Industries are very important to a country’s economy. They create employment, contribute to GDP, bring innovations, and provide services and products for people to consume.

But the way companies operate is detrimental to the planet. The manufacturing and production industry consume 54% of the world’s energy source and is responsible for one-fifth of the world’s carbon emission.

With the world population expected to reach 10 billion by 2050, the pressing effects of global warming, rising unemployment due to automation, and depletion of resources, a new approach is needed. This is why the fifth industrial revolution is gaining attention.

Industry 5 is set to return to the days before industrialization when handmade products were made by people who knew the process personally and put some human touch to them.

Collaborative robots (cobots) will help human craftsmen meet demand and quality standards efficiently by performing repetitive tasks. Cobots will free up workers for creative and innovative tasks. In addition, people in the manufacturing industry can focus more on the future of the company while cobots concentrate on daily tasks.

A company in Denmark called Universal Robots claimed that they are the first provider of industrial robots that can efficiently and safely work alongside factory workers.

In a published article the CEO and co-founder of Universal Robots, Esben Østergaard said that “Industry 5.0 will make the factory a place where creative people can come and work, to create a more personalized and human experience for workers and their customers.”

In a tweet, Tesla CEO Elon Musk once says that “excessive automation” at his company was a mistake and quoted that “humans are underrated.” Even successful businessmen are admitting that too much automation in factories is not always a solution.

The consulting firm, Frost & Sullivan estimates that industry 4.0 is heavily reliant on automation and information technology to provide actionable intelligence which to some extent affects workers and operators. The firm envisions a future where the fifth revolution empowers humans back in manufacturing processes.

As a European Commission report highlights, the power of Industry 5.0 goes beyond growth and jobs. It transforms into a resilient provider of prosperity, respects our planet, and puts the well-being of workers at the heart of the production process. And the report maps out the research projects that contribute to societal value.

The benefits of Industrial revolution 5.0 go far beyond the increased efficiency and productivity of the production line. It is a human-centered manufacturing process that involves interconnecting processes, systems, and machines to achieve long-term business objectives.

Industry 5.0 is also a source of innovation and competitive advantage, enabling companies to differentiate themselves from the competition. The concept is based on the symbiosis of three distinct segments: technology, business, and society.

These three segments are closely related and interconnected. The European Commission has outlined some critical directions that are crucial to the advancement of the industry.

Future industry will play an important role in providing solutions to pressing issues of society, climate change, depletion of resources, and social stability.  It also favors circular production models and supports technologies that are energy efficient.

Industry 5.0 maintain organizational growth without impacting the environment by using new technologies to provide value to society while strategically placing workers at the center of production processes.

And by empowering workers, companies can increase their competitiveness as well as attracts the best talents. And by revisiting existing value chains, industries become more resilient against external shocks, such as pandemics and climate crises. The power of Industrial 5.0 is making production more sustainable and human-centered while respecting the limits of our planet.

Benefits of Industry 5.0

Productivity (Autonomous Manufacturing)

The benefits of autonomous manufacturing are many. They increase productivity and reduce costs by eliminating repetitive tasks. They can also be programmed offline and can run on their own. Machines can work 24/7 without resting which can increase output.

As automation 5.0 improves productivity, workers are focused on strategic tasks while robots handle mundane, repetitive tasks. With more time to spend on strategic tasks, workers can focus on increasing efficiency and product capabilities.

Autonomous manufacturing in industry 5.0 will create more highly skilled jobs as well as allow humans to concentrate on more creative work. Automation will take over monotonous and repetitive tasks, leaving human employees free to exercise their creativity. This in turn improves the quality of production.

Increase customer experience

The future of customer experience is changing rapidly, and it’s critical for any business to keep up. It’s no longer enough to offer a great product or service to a satisfied customer. Businesses must differentiate themselves by offering a better experience. This includes offering personalized experiences and engaging with their customers in new ways.

Regardless of whether you offer personalized services or products, your customers need to be able to have the best experience possible. As the world is becoming increasingly competitive, a focus on customer experience is an increasingly important differentiator for brands.

As technology has grown increasingly sophisticated, customers have become more influential than ever before. Industrial 5.0 improves collaborative interactions between humans and machines. As a result, customer experience can become a top priority for any organization.

Word of mouth travels quickly and customer expectations are increasing. A poor customer experience can be costly. By focusing on customer relationships and the overall customer experience, businesses can increase retention rates and revenue.

Hyper customization

Increasingly, consumers are demanding products and services that are customized and unique to them. New manufacturing technologies are at the heart of the fifth industrial revolution, where companies use the latest innovations to cater to human needs.

In the age of hyper customization, it is important to remember that human touch and attention cannot be replaced with technology. Companies must be able to combine a mix of human touch and a variety of technologies to satisfy customers’ unique needs.

Hyper-customization in industry 5.0 is the ability to increase customer engagement. In a world where the attention span of an average person has shrunk to less than eight seconds, providing a customized experience can significantly improve conversion rates.

Using big data, companies can learn more about their customers and adjust targeting to meet those changes in real-time. This approach helps companies stay one step ahead of customer demands and expectations.

Hyper-customization can increase conversions by allowing companies to deliver the right product or services to the right audience at the right time.

Personalized products

The rise of the fifth Industrial revolution means a shift in manufacturing from mass production to personalization. This transition will bring products and services that are more tailored to a person’s tastes, desires, and needs.

Personalized products and services offer many benefits to manufacturers. These products are tailored to individual preferences and are sold at higher prices. Personalization helps brands build trust and solid relationships with consumers.

In addition, nowadays a majority of consumers are sharing personal information with trusted retailers which is very useful for product personalization. Personalized items are more likely to be purchased than items that are not personalized.

Additionally, companies that personalize items can create a more personal connection with their customers, which can lead to higher customer loyalty and more sales. Finally, personalization can help companies stand out from their competitors and create a unique selling proposition.

Responsive supply chain

A responsive supply chain is a flexible business approach that is designed to meet the demands of a wide range of companies. A responsive supply chain can quickly adjust to changes in demand, volume, or weather.

Responsive supply chain in industrial revolution 5.0 involves collaborating with new partners, such as logistics service providers and retailers, to increase flexibility and reduce costs throughout the whole supply chain. This process also includes incorporating third-party consultation.

The aim is to respond quickly to customer demand while maintaining a continuous improvement culture. The competitive advantage that companies can get from a responsive supply chain is based on their ability to meet the needs of their customers.

Industrial 5.0 allows companies to accommodate changing sales volumes while ensuring the highest levels of customer satisfaction. It can also help companies save on costs and maximize profits while also ensuring that there are no shortages.

Interactive product

As the human center manufacturing paradigm continues to grow, combining humans and machines has several benefits. By integrating these systems, companies can increase productivity and reduce costs while enhancing competitiveness.

Interactive product in industry 5 helps people see and feel a product before they buy it which can increase customer satisfaction. Increased customer satisfaction leads to increased sales. In addition, an interactive product makes the shopping experience fun and engaging.


There are many benefits of adopting a human-centric approach. Essentially, this design methodology emphasizes the user’s journey throughout a product or service, rather than focusing on the product or service itself.

This method reduces the risk of failure by identifying and addressing sources of user error in the design process. In addition, it ensures greater consistency and better customer experiences.

Human-centric manufacturing in industry 5.0 aims to improve the lives of workers and society. It addresses the changing skills and training needs of employees, and it focuses on the well-being of the company as a whole to meet specific customer needs.

Increase resiliency

In the age of Industry 4.0, a company’s ability to survive and thrive in a constantly changing world is critical. It’s a necessary skill to balance man and machine in an increasingly complex and diversified business ecosystem.

In order to be successful, organizations must be able to plan for the potential disruptions of their value chain, supply chain, and transportation channels. The benefits of resiliency in Industry 5.0 can be felt throughout every part of a company’s value chain.

The benefits of resilience in the industry of the future are many and varied. Resiliency reduces the impact of individual failures and enhanced the ability of a company to bounce back from adversity.

With today’s current climate crisis and other uncertainty with wars and pandemics, companies’ resiliency is being put to the test. Resiliency can improve the overall performance of an organization to gain an advantage over competitors. It also reduces the risk of business failure by strengthening a company’s position in the market.


The 5th industrial revolution provides a common language for discussing issues such as societal value, pollution, and depletion of resources. And with the pressing effects of climate change and global warming, sustainable approaches are becoming a priority.

One of the most important benefits of industry 5.0 is reducing its environmental impact. Sustainability can also improve employee productivity and morale, reduce waste, and improve the quality of products.

Businesses also become more efficient at using resources which reduces waste but can also increase production with the same amount of resources. In addition, sustainable businesses are more likely to be seen as responsible and credible by their customers and peers.

Sustainability in Industry 5.0 extends far beyond the environment. It is not a matter of costing more, but rather of focusing on the long-term success of a business. While many companies may be tempted to ignore sustainability, it is a vital element of any successful strategy.

And with consumers becoming more and more environmentally conscious, a business that fails to manage sustainability risks will not achieve growth and profitability, and they will be less successful in terms of employee retention and customer satisfaction.

Societal value

Industry 5.0 refers to a new business model, which puts human interests at the heart of the production process. This industrial approach seeks to minimize pollution and waste and make production processes circular.

Societal value in industrial 5.0 is an important concept to consider when developing and implementing strategies. Achieving societal value can create many benefits for companies, including increased consumer demand, innovation, and economic growth.

Societal value can increase consumer demand by creating a sense of prestige or exclusivity around a product or service. Societal value can also increase innovation by motivating companies to create new products or services that meet or exceed consumer expectations. This in turn increases economic growth.

Craftsmanship (human touch)

There are many benefits come with having a skilled workforce in industry 5.0. When workers are well-trained and know how to do their job correctly, they can produce high-quality products and put compelling personal touch on them.

This also leads to fewer mistakes and less time spent fixing them, which in turn saves money for the company. The benefits of craftsmanship go beyond aesthetic appreciation.

The activity can foster community and friendships. Crafting brings creative outlets and can even create emotional support. Overall, having a skilled workforce brings creativity and is a key factor in success of any company.

Collaborative robots

The benefits of collaborative robots in industry 5.0 are numerous, from reducing operator workload to enhancing job satisfaction. As they can perform a variety of repetitive tasks, they are able to free human workers from labor-intensive, monotonous jobs.

The benefits of collaborative robots extend far beyond productivity, as cobots can help improve manufacturing processes and increase output. These new tools also offer companies the opportunity to diversify their workforce.

Unlike human workers, collaborative robots do not need organized supplies of objects. They can perform various tasks including picking up objects, scanning barcodes and carrying out optical inspections.

They can also perform tasks that are tedious, monotonous, and time-consuming. These robots are capable of working for long periods and are highly accurate.

Final words

We are living in a period where the world keeps experiencing new levels of consumer behavior,  industrialization, and digitalization characterized by a dramatic change in the way goods are produced and consumed. Hence the need for a next-level industry.

The fifth industrial revolution will be driven by advanced technologies which will enable companies to operate more efficiently and create new products and services more quickly. The revolution will also have a profound impact on workers and society.

Future industry will be mission-driven and values-based. Where industry 4.0 focuses on robotics and automation while reducing human involvement, industry 5.0 use advanced technologies enhanced by human capabilities.

Industry 5.0 is about designing and creating factories and manufacturing facilities that focus on humans to make sure robotics and automation don’t overtake them.

Moreover, environmental, political, and social sustainability are at the forefront of the design and creation of companies and organizations in the industry 5.0 era.

One central element of industry 4.0 was that humans focus on creativity and administrative task while machines work on monotonous and dangerous jobs. It is argued that industry 5.0 will reduce the working hours of employees.

It is argued that a three-day work week is going to be the norm for industry 5.0 and non-working days will need to be used to bring value to society. This way just like an employee brings their creativity to companies, they will also contribute it to society.

Industry 5.0 also focuses on sustainability which is very important with today’s environmental crisis we are facing. Hence, the fifth industrial revolution is going to transform the way people work, live, and learn. It will bring new opportunities while also addressing current challenges for a better future.