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Created on 27.09.2018

Investing in the fourth industrial revolution

The term “Industry 4.0” describes the current trend of digitization and networking in the manufacturing industry. Machines are connected to each other and linked up to modern ICT networks. They become part of the Internet.

This creates “smart” factories and systems. For example, machines may detect malfunctions before they cause major problems and initiate maintenance on their own. Production and logistics processes are smart, autonomous and can also be coordinated remotely. In other words, factories are going digital.

Digital networking and the Internet of things

This networking creates what is known as the “Internet of things” (IoT). Machines, robots or devices such as a fridge equipped with a sensor can communicate with each other. The networking this creates is part of “Industry 4.0”: the real world and the virtual world merging, even in industry.

Exciting prospects for investors

In the coming years, the IoT will play an increasingly important role in our everyday lives. Those who decide to invest their money in Industry 4.0 will find that other fascinating prospects will become open to them. Ultimately, it is expected that companies offering solutions which cater to the needs of Industry 4.0 will benefit enormously from the developments of the fourth industrial revolution, and this in turn should have a positive effect on the returns of investors who decide to invest in these companies. In particular, companies involved in mechanical and plant engineering and the technology sector are looking in great detail at issues related to Industry 4.0. The automotive, electronics, logistics and construction industries are all ahead of the game as well. Of course, these developments are having the biggest impact on robotics companies. Asia in particular is driving automation forward, although Europe and North America are also very active.

New business models are emerging

Many of these companies will undergo complete transformations over the coming years. They expect these transformations to bring greater flexibility, higher productivity, improved efficiency and lower costs. Ideally, this in turn will have a positive effect on the share prices of these companies, and by extension on the returns of those who are invested in these companies. The greatest potential in Industry 4.0, however, is the fact it is giving rise to new business models and strategies. Google, Amazon and Netflix are particularly impressive recent examples of companies that have succeeded in turning new business models into businesses worth millions.

That said, it is hard to tell which companies will be able to benefit from these developments. Targeted investments in the shares of a suitable company, sector or region are quite complicated and entail a high risk of loss. Your best bet is to consult your advisor who can discuss with you how best to invest your money so that you too can benefit from the fourth industrial revolution. There are already funds and other investment products that are specifically investing in Industry 4.0.

Invest in digital change

“Industry 4.0” is definitely more than just a meaningless buzzword. With a bit of background knowledge and the right investment product, private investors can also be part of the fourth industrial revolution. They will be actively investing money in digital change and they will also benefit from the investment opportunities of the fourth industrial revolution.

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