An expert group Policy Brief about “Industry 5.0” gives recommendations to transform the European Industry to foster the twin transition.
The independent expert group on the economic and societal impact of research and innovation (ESIR) published a Policy Brief entitled “Industry 5.0: A Transformative Vision for Europe – Governing Systematic Transformations towards a Sustainable Industry”. The study recommends a deep transformation of the European Industry to foster the twin green and digital transitions in Europe. The transformation will support Europe’s ambition to become more sustainable, resilient, regenerative, and circular whilst living within planetary boundaries.
ESIR proposes the vision for ‘Industry 5.0’, which moves past a narrow and traditional focus towards a more transformative view of growth, which is focused on human progress and well-being. This involves reducing and shifting consumption to new forms of sustainable, circular and regenerative economic value creation and equitable prosperity. The new approach has important consequences for the EU. It requires, among others, new economic orientations to industry performance, new design for business models, value chains, and supply chains and new purposes for digital transformation. The approach addresses recent knowledge and learning from the Covid-19 pandemic and the fundamental need to build resilience across value chains and secure people’s lives whilst living with planetary boundaries. Industry 5.0 proposes a different set of enabling approaches to the EU’s ‘twin transition’, intending to connect digital transformation with sustainability and climate action. The objective is to design an industrial system that is inherently more resilient to future shocks and truly integrates the European Green Deal.
Several key actions need to be taken to enable Industry 5.0. Primarily, it requires new policies and policy instruments, new partnerships and new objectives for policies affecting industry. Furthermore, it requires a portfolio approach to research and innovation projects, combined with the willingness and a mandate to take informed risks. Thirdly, agility is needed, mainly in the form of resource fluidity and an improved ability to respond quickly to changing circumstances. Finally, it requires an ability to link policy processes, policy areas, and governance levels in a more efficient and user-friendly manner. In short, Industry 5.0 needs government 5.0. This need is underlined by the fact that public sector decision-making processes are not well-adapted to the rising imperatives of speed, uncertainty and transformation. These imperatives call for greater strategic agility and leadership in the public sector than that provided by the existing budget processes, incentive structures, competencies and institutional rigidities that characterise today’s policy-making.
The study proposes the “ESIR Industry 5.0 Action Plan”. The action plan is divided into the six following topics: (i) the triple imperative and the role of industry, (ii) a new economic orientation and new approaches to industry performance, (iii) a new design for business models, value chains and supply chains, (iv) a new purpose for digital transformation, achieving life within planetary boundaries, (v) a new approach to policy-making and lastly, (vi) new capabilities and approaches to research and innovation.
Industry 5.0 was presented during the ESIR final event on 15 December 2021. ESIR Chair Sandrine Dixon-Devlève said about the proposed new direction: “Post COVID 19, building resilience within our existing economy and transforming to a new set of economic ecosystems that are more resilient to future pandemics and environmental shocks should be Europe’s mission henceforth. Ensuring that European industrial development is oriented to achieving this goal and enabling the transition to the age of sustainable well-being for all is an essential step. This Industry 5.0 Policy Brief starts to unpack what that could look like.”
Along with the report, the European Commission is launching the first Industry 5.0 Award dedicated to EU-funded projects whose results make European industry more resilient, sustainable, and human-centric. The award has been prepared in collaboration with European Factories of the Future Research Association (EFFRA) and industrial platform ManuFUTURE. The contest is open for applications and the submission deadline is 1 April 2022.