Industrial & Manufacturing Trends for 2021

Industrial & Manufacturing Trends for 2021

This time last year and for several years previously industry trends were dominated by Industry 4, the next industrial revolution. So, what has changed? Have the shadows of coronavirus and Brexit changed the entire industrial landscape, or are we still on course for the much-heralded smart factory of the future? 

In this article, you will learn: 

  • What are the leading trends driving the industrial & manufacturing sectors in 2021? 
  • How will industry recover from the impending postCOVID-19 recession? 
  • How will it all impact jobs? 

Industry 4 and smart factories 

Industry 4, the so-called fourth industrial revolution first mooted in 2013, promised us the traditional manufacturing systems would be replaced by a combination of robotics, the Internet of Things, big dataand artificial intelligence. To an extent, all these things have happened already. We already have a handful of smart factories that require zero human intervention. For example, in FANUC, a Japanese robotics company, robots manufacture more robots. The factory functions in the dark with the lights and air conditioning systems switched off. The robots work round the clock, never need a break, and monitor their own performance. The impact of Industry 4 on the jobs market cannot be overestimated. At FANUC Just a few workers remain to keep an eye on things. This does not mean that Industry 4 threatens people’s livelihoods; it creates more jobs than it destroys, merely different kinds of jobs. Job retraining is another major trend.  

Mass customisation 

The kind of mass automation described above is not as mindless as it might at first seem. Such smart factories are massively flexible and responsive to human requirements. For instance, today, when purchasing a new car, buyers can design their own vehicle by choosing between hundreds of alternative variables. Automated systems can make the car seamlessly within the automated mass production system. This is the very opposite of the traditional massproduction model. While mass customisation will continue as a trend for 2021 and beyondit is not without its problems. From a customer viewpoint, mass customisation can result in mass confusion, where there are too many parameters to choose from, resulting in lost sales. As we shall see below, mass customisation is giving way to mass personalisation.  

Industry 5 

While the goals of Industry 4 will continue to dominate the direction of manufacturing through 2021 and beyond, today, analysts are focussing attention on what they call Industry 5. While Industry 4 is all about automation, Industry 5 recognises the importance of the human element. Essentially, Industry 5 involves the collaboration between smart manufacturing and human creativityemphasising the synergy of humanmachine interaction. The machines create efficiency and do the tedious, repetitive tasks while humans provide the human touch that adds value to the product. The hope is that human intelligence will take over once artificial intelligence has accomplished all it can. Humans will provide significantly higher levels of customisation than robots. It is the mass customisation offered by Industry 4 taken to the altogether higher level of personalisation, understanding and responding to customer needs rather than specifications.  

The rise of the Cobots 

Cobots, or collaborative robots, are an important trend. These intelligent machines work alongside humans in a shared workspace and are easy to program and train.  They are far from new, but over recent years they have become considerably more sophisticated and powerful. The global Cobot market in 2019 was  $981 million, and it is expected to grow to $7,172 million by 2025 – a CAGR of 41.8%. Seen by some analysts as a manifestation of Industry 5, in that they represent close collaboration between humans and robots, a leading market driver appears to be a lack of skilled human workers and rising labour costs.  

Recovering from COVID-19 

Recovering from COVID-19 will be a significant factor in the industrial & manufacturing sector for 2021. Not all manufacturing sectors have been affected adversely by the pandemic; the pharmaceutical, chemicals, medical devices and defence sectors have been relatively unaffected. The sectors have made heroic contributions to the fightback against the virus. Assisted by government efforts, other sectors are likely to grow from their 2019 levels in 2021 including automotive, electronics, aerospace and textiles. However, some manufacturing companies will inevitably fail. 

Overall, the sector is optimistic  around 60% of manufacturing industry professionals expect a full recovery by the middle of next year, though this adverse supply chain issues might impact on this. Overall, the manufacturing industry is successfully implementing modified working practices to ensure safe working, a trend that will continue into 2021.  

Brexit is also casting a shadow over the manufacturing sector. Whether it is a threat or an opportunity is debatable. Industries that thrive will be those that are flexible and willing to adapt to what could be a rapidly changing landscape.  

Our Q4 Industry Sector Global Report for 2020 shares the many different impressions of the current crisis in the economically relevant regions of the world.

Industrial & manufacturing jobs 

COVID-19 will continue to have a significant impact on the industrial & manufacturing jobs market in the shorter termThis is likely to recover quickly, especially as there is now encouraging news on the vaccine front. Howeverthe changes we describe above, including smart factories and the digital transformation of the industry, are having and will continue to have a profound impact on jobs.  

According to Deloitte, these changes will create a skills gap resulting in millions of unfilled jobsThe new manufacturing work environment will blend advanced technology and digital skills with uniquely human skills to yield the highest level of productivity.” 


Overall, leaders in the industrial and manufacturing sectors are optimistic of a rapid recovery from the current pandemic, followed by significant future growth. While Industry 4 and the smart factory remain important trends, the drive for automation at any cost has given ground to the more humane approach of Industry 5. Here, automation, perhaps in the form of cobots, does the donkey work leaving human workers to add the creative touches. The trend is to move on from mass customisation to personalisation. 

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