“Raqamli iqtisodiyot va sun’iy intellekt texnologiyalarining jamiyat rivojlanishidagi ahamiyati”
mavzusidagi xalqaro ilmiy-amaliy konferensiya 2024-yil 22-noyabr, Tоshkеnt, O‘zbekiston
32
MAIN TRENDS IN THE DEVELOPMENT OF INDUSTRY 4.0 ON AN
INTERNATIONAL SCALE AND ITS POSSIBLE IMPACT ON THE ECONOMIC
PROSPERITY OF UZBEKISTAN: IDENTIFYING PROSPECTIVE ASPECTS
AND
POTENTIAL THREATS TO THE DEVELOPMENT
Komilov Asror Akmalovich
Doctoral Student of Graduate School of Business and
Entrepreneurship https://doi.org/10.5281/zenodo.14196782
Abstract: In this article the main trends of Industrial Revolution 4.0 have been
analyzed along with the history of this term. Moreover, current innovation state of
Uzbekistan has been analyzed and possible recommendations have been provided which
can be helpful for future research and decision makers.
Key words: Industry 4.0, innovation, AI, Machine learning, IoT, Cloud Computing,
Digital economy
Introduction
The expeditious developments in digital technology have triggered a rise to the
Fourth Industrial Revolution, or Industry 4.0, fundamentally altering the global industrial
landscape. Characterized by intelligent automation, interconnected systems, and the
integration of cyberphysical technologies, Industry 4.0 is transfiguring traditional industries
and leading to new economic opportunities. At an international level, these developments
are paving the way for increased productivity, innovation, and economic growth. Countries
that efficaciously adapt to these rapid changes are positioned to benefit from enhanced
industrial efficiency, resource optimization, and a strengthened ambitious position in the
global market.
For Uzbekistan, a country undergoing economic reforms and industrial
modernization, the significance of Industry 4.0 presents both favorable opportunities and
momentous challenges. With its capacity to catalyze growth in fields such as manufacturing,
agriculture, and services, Industry 4.0 could play a pivotal role in fostering Uzbekistan’s
economic development. Nevertheless, the implementation of these technologies also brings
possible threats, including the problem of digital inequality, the disruption of traditional
industries, and the challenge of establishing a skilled workforce to manage and innovate
within this new industrial paradigm.
This thesis tries to explore the main trends in Industry 4.0’s development on a global
scale, evaluating their relevance to Uzbekistan’s unique economic context. By analyzing
the prospective aspects and potential threats, this study seeks to provide vision into how
Uzbekistan can strategically straighten its industrial policies to channel the benefits of
Industry 4.0 while undertaking the risks associated with digital transformation.
“Raqamli iqtisodiyot va sun’iy intellekt texnologiyalarining jamiyat rivojlanishidagi ahamiyati”
mavzusidagi xalqaro ilmiy-amaliy konferensiya 2024-yil 22-noyabr, Tоshkеnt, O‘zbekiston
33
Literature review
Manufacturing value chains are convoluted. Technological advances have created
several advantages for business world; new concepts such as digitalization, Internet of
Things (IoT) and Cyber Physical Systems (CPS) have received a great importance across
the industries. These terminologies are utilized in defining the Fourth Industrial Revolution
(Industry 4.0), also known collectively as a German high-tech strategy for future
manufacturing industries [4]. Industry 4.0 precipitates a staggering effect by transforming
the manufacturing and production processes in industries. Thus, Industry 4.0 will play
crucial role in transforming traditional companies into Smart Factories with the help of
Internet of Things (IoT) and Cyber Physical Systems (CPS).
Before diving into the benefits and applications of Industry 4.0, it is worth to
analyze the history of industrial revolutions and what are the main differences are there
among them.
Thus, the First Industrial Revolution commence at the end of the XVIII century,
with origination of the steam engine and mechanized equipment, which revolutionized
industries such as textiles and iron. And led to the transition from manual production
methods to automated production.
The Second Industrial Revolution occurred at the end of the 19th century with the
introduction of electrical energy, which in turn allowed enabled factories to operate more
efficiently. Inventions like the internal combustion engine and the introduction of the
assembly line paved a way for mass production and economies of scale.
During, 1960s and 1970s, the Third Industrial Revolution took place with the
introduction of electronics, computers, and early automation. This phase allowed a shift
from analog processes to digital ones, with automation enhancing precision and
productivity in industries.
Market development, globalization and immense competition have created a
condition to the inception of the Fourth Industrial Revolution as the concept of Industry 4.0,
which is based on the integration of digital devices with smart, interconnected systems.
Machines, data, and people now interact in real-time, underpinned by AI, IoT, and machine
learning, which leads to "smart factories" with automated and effective production
processes [5].
“Raqamli iqtisodiyot va sun’iy intellekt texnologiyalarining jamiyat rivojlanishidagi ahamiyati”
mavzusidagi xalqaro ilmiy-amaliy konferensiya 2024-yil 22-noyabr, Tоshkеnt, O‘zbekiston
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Source:
Below are some of Industry 4.0’s core components:
1.
Internet of Things (IoT)
: Devices are integrated with sensors, software, and
other technologies to get connected and traffic the data with other machines and systems
via the internet. This allows real-time monitor and control of machinery and equipment.
Activities are triggered through data transfers in the information technology to make daily
mobility safer, easier and pleasant.
2.
Big Data and Analytics
: The concept of big data applies to substantial,
miscellaneous and intricate datasets that impact the organizational decision making of a
company concerning the long-term strategy. Huge amounts of data generated from
production processes, machines, and customers are analyzed to gain insights that improve
decision-making, optimize production, and reduce costs[2].
3.
Cyber-Physical System (CPS) Each system of CPS has sensors installed on
the entire physical machines to connect the physical things with virtual models. CPS also
serves as the foundation to create the Internet of Things (IoT) which allow become the
Internet of Services (IoS) [6].
4.
Artificial Intelligence (AI) and Machine Learning (ML)
: AI and ML
algorithms allow machines to learn from data, predict errors, optimize workflows, and carry
out complex tasks autonomously, increasing effectiveness and great flexibility.
5.
Cloud Computing
: Cloud Computing incorporates pools of IT resources
that provide storage and processing capabilities in virtual system by serving multiple users.
There are mainly three frameworks of cloud computing; Software as a Service (SaaS) where
the access will be granted depending on the customer purchase such as ERPs, Platform as a
Service (PaaS) where customers are authorized to access their applications on the cloud
online in any device such as software developers and Infrastructure as a Service (IaaS)
offers mostly basic activities such as storing capabilities [2].
6.
Additive Manufacturing
: also defined as 3D Printing, refers to producing
customized goods for the requirements of customers. The most popular way is the prototype
and 3D printing methods in order to produce small batches reducing waste by gaining
“Raqamli iqtisodiyot va sun’iy intellekt texnologiyalarining jamiyat rivojlanishidagi ahamiyati”
mavzusidagi xalqaro ilmiy-amaliy konferensiya 2024-yil 22-noyabr, Tоshkеnt, O‘zbekiston
35
advantage of having less stock on their hand and overproduction and speeding up the
manufacturing processes.
7.
Augmented Reality (AR) and Virtual Reality (VR)
: it is defined as the
interactive technology that allows harmony between the virtual world and its users while
the virtual world is being utilized as the part of the real surroundings [2].
These technologies
aid training, maintenance, and production planning by providing interactive visualizations
and real-time data to users.
Table 1. Trends in the development of digital technologies
Name
The essence and prospects of development
Leaders
of
implementation
Blockchain
technology
Considering the prediction of the value of Gartner
business chains, after the first phase of growth in
20182021, in 2022-2026, investment flows are
expected to increase, and new successful models will
be created, which is expected to increase them by more
than 3 trillion dollars USA. worldwide
USA, China
Three-
dimensional
printing
Further advancements of three-dimensional (3D)
printing have the potential to disrupt production
processes, encouraging international trade in design
rather than ready products. Developing countries will
have to leap-frog traditional production processes.
USA, China,
Japan, Germany,
Great Britain
Internet
of
Things
(IoT)
In 2018, more "devices" (8.6 billion) were connected to
the Internet than people (5.7 billion), and the number of
IoT connections is projected to increase by 17% per
year and exceed 22 billion by 2025
USA, China,
Japan, Germany,
Republic
of
Korea,
France and Great
Britain
5G networks
5G networks can transfer approximately 1000 times
more data than modern systems. In 2019, 72 mobile
operators tested 5G, it is expected that larger-scale
implementation will begin only in 2025.
USA,
Europe
and
Asia Pacific
Cloud
computing
Cloud computing is disrupting traditional business
models by reducing the need for its own IT personnel,
offering flexibility to scale and consistently deploy and
maintain programs
North America,
Asia Pacific,
Western Europe
Automation
and
robotics
According to the International Federation of Robotics,
global sales of industrial robots have doubled between
2013 and 2017. This trend will most probably continue,
and sales are expected to grow from 381,300 units in
2017 to 630,000 units by 2021.
China, Japan, the
Republic
of
Korea,
the
United
States
and Germany
“Raqamli iqtisodiyot va sun’iy intellekt texnologiyalarining jamiyat rivojlanishidagi ahamiyati”
mavzusidagi xalqaro ilmiy-amaliy konferensiya 2024-yil 22-noyabr, Tоshkеnt, O‘zbekiston
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Artificial
intelligence
(AI)
and
data
analysis
General-purpose AI technologies have the potential to
increase the global economy by $ 13 trillion in 2030,
which will provide an additional 1.2 percent to annual
GDP growth.
China, USA and
Japan
Source:
[5]
Analyzing the current state of innovation in Uzbekistan
For a lower-middle-income country, Uzbekistan, the largest potential advantage of
innovation come from focusing on importing, absorbing and adapting innovation from
abroad – goods, services, processes and methods that have already effectively worked
before [7]. Investment in R&D is one of the primary inputs to innovation and is vital to
raising productivity and creating additional value within an economy, diversifying product
types and gaining access to international market value chains. It helps to generate high rates
of return and promote long-term growth. However, gross expenditure on research and
development (GERD) in Uzbekistan is relatively low –almost equal to 0.2 per cent of GDP
since 2012, even with a decline to 0.13 per cent in 2018, slightly higher than Tajikistan (0.1
per cent) and Kazakhstan (0.12 per cent) but lower than the income-group average in 2017
(0.58 per cent). In recognition of the low levels of investment in R&D, the Strategy of
Innovative Development 2019–2021 set out to raise these levels to 0.8 per cent of GDP in
2021
[7]
.
It can be seen from the graph below:
In 2019, 304 firms conducted R&D activities,121 of them were from the private
sector (40%), 118 were State-owned enterprises (39%) – especially research and scientific
institutes, a structure retained from the Soviet heritage – and 65 of them were higher
education institutions (HEIs) (21%) [7].
Higher use of and access to the information and communication technology (ICT)
is an important facilitator for innovation, productivity growth and competitiveness across
the sectors in the Uzbek economy. More dynamic ICT sector can serve as a source of
economic growth and job creation.
“Raqamli iqtisodiyot va sun’iy intellekt texnologiyalarining jamiyat rivojlanishidagi ahamiyati”
mavzusidagi xalqaro ilmiy-amaliy konferensiya 2024-yil 22-noyabr, Tоshkеnt, O‘zbekiston
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The provision of e-governance services as well as digital connectivity has improved
greatly, even though the access to the Internet is still not yet equitable across the country.
The number for broadband subscriptions raised from fewer than 1 per 100 people in 2012
to almost 14 per 100 in 2019, the highest in Central Asia – followed closely by Kazakhstan
(13 per 100).
Patent activity, the indication of the potential for research commercialization for
innovations, remains relatively low in Uzbekistan. Overall, trademark filings show the
largest increase in the past decade, from 4,510 in 2011 to 8,494 in 2020, whereas the patent
filings indicate a smaller increase, from 304 in 2011 to 379 in 2020, with a highest of 480
in 2018 (WIPO, 2021a).
Especially, the number of patents filed amounted to 1.5 per billion dollars of purchasing
power parity (PPP) GDP in 2021, higher than in Tajikistan but lower than in Kazakhstan
and Kyrgyzstan.
“Raqamli iqtisodiyot va sun’iy intellekt texnologiyalarining jamiyat rivojlanishidagi ahamiyati”
mavzusidagi xalqaro ilmiy-amaliy konferensiya 2024-yil 22-noyabr, Tоshkеnt, O‘zbekiston
38
Encouragingly, the country’s remittances for intellectual property have been on the
increase since 2016, albeit from a low base, showing that Uzbekistan is importing high
technology products from abroad to upgrade theirs domestically. In fact, 19.35 per cent of
Uzbek firms have licensed foreign technology, which is higher than the ECA average (14
per cent) [8].
The above graph illustrates the main reasons that constrain the innovation activities
based on the opinions of the people. 23.1% of the respondents see the main reason that
hinder the innovations is lack of financing. The second reason is no need for innovation
with 14.7% is followed by high cost of innovation with 12.9%.
Recommendations
:
1.
Development of Digital Infrastructure: The authorities can prioritize
investment in internet and mobile network expansion, particularly in remote and rural areas.
Public-private partnerships agreements can help facilitate infrastructure enhancements.
2.
Education and Training: Fostering educational systems and initiating special
training programs in cooperation with industry can allow eliminate the skills gap. To
establish partnerships with international educational institutions can also attract expertise in
Industry 4.0 technologies to Uzbekistan.
3.
Stimulating Investment: The government can promote private investment in
Industry 4.0 by allowing tax breaks, subsidies, or low-interest loans for businesses who
invest in new technologies. Supporting SMEs in espousing these technologies will be
especially vital.
4.
Enhancing Cybersecurity Capacity: Fostering cybersecurity infrastructure,
introducing well rounded national cybersecurity standards, and increasing awareness about
data security are important steps to protect against cyber menaces. Developing partnerships
with international cybersecurity organizations can also be a way to attract valuable
resources and expertise.
5.
Regulatory Reforms: Introducing supportive regulatory framework that
undertakes intellectual property, data privacy, and digital rights will help create an
“Raqamli iqtisodiyot va sun’iy intellekt texnologiyalarining jamiyat rivojlanishidagi ahamiyati”
mavzusidagi xalqaro ilmiy-amaliy konferensiya 2024-yil 22-noyabr, Tоshkеnt, O‘zbekiston
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innovation-friendly environment. Policies that support innovation, protect intellectual
property, and promote digital transformation in the public and private sectors are vital.
Conclusion
In this paper the Industrial Revolution 4.0 has been analyzed. Its history and main
components have been provided. Moreover, current innovation state of Uzbekistan has been
analyzed and possible recommendations have been provided which can be helpful for future
research and decision makers
.
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