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The History Behind Industry 4.0

Posted by Charing Kam on Jul 18, 2018 5:27:00 PM
Charing Kam
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As part of an ongoing series of Industry 4.0 articles to help manufacturers embrace the fourth Industrial Revolution, we will be going through some concepts, theories, and practical examples. Our first article was about Industry 4.0 success stories. To keep up with the series, sign up for our newsletter.

Industry 4.0, IoT, EaaS…the everchanging economy might have made all these terms popular, but in the end, manufacturers just want to increase productivity and reduce costs. That has been a constant since the Industrial Revolution and since the first factory was built in Derbyshire, England.

So, how did we get to Industry 4.0, and what has changed? What is Industry 1.0, 2.0, and 3.0, and how has that led to 4.0? We’ll be going through the history of the factory, and the events that have led us to this point in time.

What is Industry 1.0?

Taking place in the 18th and 19th century, Industry 1.0 is also known as the Industrial Revolution. Before the Industrial Revolution, hand production or craft production was the norm, and many people were self-employed and created products for their own sale. The putting-out system was also popular in the 16th century, with workers acting as subcontractors in weaving or knitting using their own machinery.

The Industrial Revolution brought about several innovations that had far-reaching effects, starting with mechanised cotton spinning in the textile industry. Replacing the time-consuming and labour-intensive spinning wheel, it led to productivity increases in the factor of hundreds. It also caused the textile industry in Britain to expand rapidly, with the share of value from the cotton textile industry increasing from 2.6% to 22.4% within the span of 70 years.

History Industry 1.0 Industry 2.0 Industry 3.0 Industry 4.0 (1)

Since these new spinning frames and power looms were expensive, textile workers had to start working together in factories, using machinery that was owned by the factory owners. And hence the factory system and mechanical mass production started taking hold, especially after it was proven to increase productivity.  

Steam power was another note-worthy invention of the Industrial Revolution; with the move from stationary steam engines to the rotary-motion Watt steam engine. By using a separate condenser, it increased efficiency and reduced energy lost due to condensation. At the same time, the steam engine led to the development of other machine tools such as the engine lathe, planing, milling and shaping machines.

What is Industry 2.0?

The Industrial Revolution led to the Technological Revolution, or Industry 2.0. This was a continuation of Industry 1.0 that took place between 1870 and 1914, and that focused on the rapid expansion of manufacturing technology and production, in particular, large-scale iron and steel production.

As railroads developed due to the progression of steam locomotives and the resulting drop in coal prices, the cost of iron and steel production were also dropping due to the invention of the hot blasting technique and the Bessemer process. This allowed more manufacturers to consider using iron and steel in their production, with large amounts of steel being used in bridges, ships, and the aforementioned railroads.

Since steel was stronger and more durable, longer lengths of rails could be produced, and as prices dropped, heavier weight rails were used, leading to the ability for heavier locomotives to be supported. That kick-started the beginning of railroad becoming the main mode of transport for many.

The harnessing of Electricity was also introduced during the Second Industrial Revolution, with Faraday’s cage and buildings illuminated through the use of light bulbs. Electric power stations started taking over from gas lighting, which improved working conditions and reduced the risk of fires.

In the end, by the end of the Second Industrial Revolution, mass production and the assembly line had become popular, with Fordism becoming the method to copy.

Industry_4.0Credit: Christoph Roser at

What is Industry 3.0?

Industry 3.0, or the Third Industrial Revolution, is the one that is still most commonly-seen in our current landscape. The Digital Revolution shifted production from mechanical (and analog) to digital technology, and it started from the 1950s to the 1970s. It is characterised by the use of digital logic circuits, microprocessors, and transistors, which gave us computers, digital cell phones, and the Internet.

History Industry 1.0 Industry 2.0 Industry 3.0 Industry 4.0 (2)

Many factories and manufacturers still use these production methods now, which include individual machine automation due to the development of software systems and Programmable Logic Controllers. Also, as per APICS, “Integrated systems, such as material requirements planning, were superseded by enterprise resources planning tools that enabled humans to plan, schedule and track product flows through the factory.”

With the focus moved to reducing costs instead of increasing productivity, many manufacturers started moving their factories to lower-cost countries, with lower costs of labour.

What is Industry 4.0?

The shift from Industry 3.0 to Industry 4.0 is slightly tough to discern, but the main element focuses on the interconnectivity between machines, using cyber-physical systems. It includes technological breakthroughs such as Artificial Intelligence, Industrial Internet of Things, Machine learning, and more.

It focuses on finding alternative ways to increase productivity, whether that is by creating software that can tackle the issue of sales, or by asking the machines to talk to each other to predict maintenance times. For more information on the definition on Industry 4.0, you can read our article on the components that make up Industry 4.0!


In the end, although Industry 4.0 is the way forward, many manufacturers are still stuck in Industry 3.0. To stay competitive, manufacturers will need to invest in Industry 4.0 and the innovations that power it, just as leaders like Ford invested in the assembly line.  

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Charing Kam

Written by Charing Kam

Charing is responsible for In Mind Cloud's Inbound Marketing initiatives. A content marketing enthusiast, she works to find out how consumers make decisions and aims to help them along the way.

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