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Competitive advantages are found in heads and hands – not in technology

In manufacturing process, the employees will remain the key factor, however their role will change with the advance of new technologies.
In manufacturing process, the employees will remain the key factor, however their role will change with the advance of new technologies.

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Industry 4.0 is a label for technological developments that are expected to trigger an industrial transformation (more info:, German). Such developments are said to hold great potential for innovation – which is very important for Switzerland’s competitive position as a place of employment.

I4.0 indeed holds great potential for innovation. However, this potential can only partly be found in technology. It is also questionable whether technology-based capabilities really create a sustainable competitive advantage, seeing how competitors can also obtain the same technology.

The real competitive advantage is not in possessing the newest technology, but in being able to use this technology better than competitors do. This is what experience has already taught us. The concept of computer-integrated manufacturing (CIM) offered the vision of a factory without people. But that vision did not become reality. There might be fewer people in a factory today, but they are still there. Their role in the manufacturing process is still a critical one – perhaps even more critical than before CIM.

Competitive advantage lies in the intelligent use of technology

This has to do with the fact that operating complex manufacturing facilities is something very challenging. Production plants rely on highly skilled employees who master their field. At the end of the day, it is not the technology creating a competitive advantage but the intelligent use of that technology. Whether this is successful or not depends on the users – and thus on the employees. People become critical success factors. Whoever loses this factor will also not succeed with new technologies.

In Switzerland, human capabilities are a primary resource of process mastery and innovation capacity. This is not limited to those people whose job it is to drive product and process innovation. It refers to all employees who, with their technical competence and know-how, are the actual raw material for sustainable success. This might be a polisher who throughout the years has developed a sleight of hand that can be critical for the precision with which a specific metal alloy is processed. It is naturally possible that a robot can be programmed to do the job. However, the robot will not continue to develop its skill. And the company will lose this know-how as soon as the last experienced employee retires.

Human side of Industry 4.0

Perhaps that won’t be so tragic. But before we implement new technologies, we must consider which competencies are critical and how we should continue to develop these in a systematic fashion. There are also a number of critical competencies one might not be aware of. These exist in the form of know-how in employees’ heads and hands – which is why it is crucial not to look at I4.0 projects only from a technological point of view, but to see them as having potential for innovatively, competitively designing the interaction of human, technology and organization. The basis of innovation capacity and process mastery won’t be found in technology but in the heads and hands of the employees who will make it possible to use technological potential intelligently and thus create a competitive edge.

The author: Anton Wäfler is a professor at the University of Applied Sciences and Arts Northwest Switzerland, School of Applied Psychology. With his proven record in the fields of safety and human factors, sociotechnological system design, organizational development, and human-computer interaction, Professor Wäfler possesses a unique expertise in work and organisation psycology. He was a co-founder of iafob GmbH, a private consulting company developed out of the ETH Zurich, where he still is a senior consultant.