Is the smart factory a manufacturing innovation?

Lately, innovation of the manufacturing industry has become a trend. Not just the United States, the European Union and Japan, but also China is emphasizing its importance. The Korean government doesn’t want to fall behind and has come up with the “Manufacturing Innovation 3.0” policy. However, the manufacturing innovation policies of different countries make me wonder a few things.

First, they are full of technical terms related to information and communication technology. They are overly dependent on technology. The goal of innovation is ambiguous, and the technology itself is described as the objective. Technologies are important in industrial policies but not everything.

Second, I am not sure what exactly “manufacturing innovation” is. Most of the policies are about smart factories. Is the smart factory a manufacturing innovation? Innovation is a more comprehensive, higher concept beyond simple process and effi
ciency. It is doubtful that it deserves to be called
“innovation.”

Third, dependency on technology in production processes and equipment is a problem. The technologies and production of the equipment and management systems in smart factories are monopolized by a few developed countries. We need to contemplate what these smart factories that the government aspires to create really mean.

Lastly, integrating ICT technology means enhanced automation, which translates to a reduction in manufacturing jobs. When we need to create more jobs desperately, who does manufacturing innovation benefit?

The Korean manufacturing industry must not fall behind in the trend of innovation. Improved productivity is the desperate goal of the Korean manufacturing sector. However, we need to have a balanced perspective on manufacturing innovation. In many cases, new industries and technologies packaged as “innovation” with rosy promises often turn out to be trivial. Rather than the slogan of innovation, businessmen and workers in the industrial fields find survival from deficit, restructuring and bankruptcy more urgent.

by Joo Won, Director of industrial research at the Economic Research Headquarters of Hyundai Research Institute