The Internet of Things (IoT) owes its popularity to the adoption of consumer products such as wearables and smart home appliances, yet it’s within industry that its future reputation and long-term success may lie. Smart manufacturing, smart factories, smart energy… The big companies such as Bosch and Siemens are adapting, manufacturers are committed (BI Intelligence predicts that global manufacturers will invest $70 billion on IoT solutions in 2020), and investors are circling (Startupbootcamp alumni Relayr recently raised $23million in a Series B round). Their aim? To use the new data gathered to create fresh business opportunities, a more efficient value chain, and data-driven business models.

Industry 4.0

The German government has coined this move towards smart factories and smart manufacturing as Industry 4.0, with German industry predicted to invest a total of €40billion into the space by 2020. Furthermore, an Accenture report in 2015 estimated that Industrial IoT has the potential to add $14.2 trillion to the world economy in the next 15 years, with the UK benefitting by as much as $531bn. It’s not hard to see why. The interconnected nature of factories, and their external links to upstream and downstream companies, would allow for a much greater level of flexibility and operational efficiency.

Unsurprisingly there is a lot of buzz around Industrial IoT, but how are startups fitting into this? What are the challenges facing this technological shift? And how will we know when we’ve reached Industry 4.0?

Startups in Industrial IoT

ThingTrax – part of the new Startupbootcamp IoT | Connected Devices cohort – is one startup riding the wave of smart manufacturing. They help manufacturers reduce their unplanned downtime and increase their operational efficiency, all by capturing and analysing data from machines and operators in real-time through their devices and sensors.

Co-founder Imran Shafqat says of Industry 4.0: “People often judge smart manufacturing as being too difficult, citing issues around integrating new smart technology within legacy manufacturing systems. At ThingTrax we’re able to read data from analogue devices through 8 channel analogue to digital converters (ADCs), and using the cloud we can monitor these so-called ‘legacy machines’ to provide real time configuration. There are simple and low cost options for companies looking to adapt to the Industrial IoT. We just need to keep providing a reliable and stable solution.”

And what of the challenges facing ThingTrax and other startups within Industry 4.0? Alexandra Deschamps-Sonsino, Mentor in Residence at Startupbootcamp, says: “Of course there are a number of concerns around security, but if the security sector can work better with startups then startups can really engage with them to provide secure IoT systems.”

Reaching Industry 4.0

There are three major technological pillars that will enable the implementation of smart manufacturing.

We’ll need stable IoT devices, likely in the form of sensors placed on equipment in factories, so that data can be collected around the performance of the machine and systems. The power and intelligence of big data and machine learning needs to be sophisticated enough to process huge amounts of raw data from both machinery and people. A constantly evolving communication infrastructure will need to advance to a point where it becomes immune to any breaches in security.

ThingTrax is integrating these three areas into an all-in-one solution and, when asked when we’ll know if we’ve achieved Industry 4.0, Shafqat is very clear: “The manufacturing process will be similar to how you now track a package or delivery. You know exactly where it is and what’s happening with it.”

For Deschamps-Sonsino, Industry 4.0 will be reached when the technology and people using it are intertwined. “People will be able to use the tools that they’re used to using at home at work. They won’t be using a poor interface at work that they’ve had to train on for 20 hours. People will be using an app or a phone… things that they’re comfortable with.”

How long will that take? A few years? A decade? Whatever the answer, those looking for the next long-term IoT success story will hope it’s sooner rather than later.