How the Pandemic is Accelerating Industry 4.0

Unpredictable expectations. Unprecedented workplace complications. Unexpected hurdles in the supply chain.

The pandemic has brought in a whole load of surprises for industries worldwide, especially for the manufacturing industry. Even before the pandemic, the industry was transforming with the digital culture, new technologies and tools to facilitate smart manufacturing.

Ever since the pandemic hit, there’s now an acute demand for industry leaders to adapt to the new norm while being socially responsible. The impact of the pandemic in just a short span has been so severe that many small-scale manufacturing companies have gone out of business. This disruption brought on by the pandemic has forced companies to accelerate the digital transformation out of necessity. 

This was when Industry 4.0 was born — the digitization of manufacturing processes interlinked with employees, business operations and shareholders. Industry 4.0 is making manufacturers rethink their current strategies and reinvent new processes for survival during the pandemic.

A Shift in Priorities

Today’s manufacturing organizations cannot survive the pandemic unless they shift their priorities to digital technology. Agility and flexibility are the keywords now and this is visible from McKinsey’s survey, ‘An inflection point for Industry 4.0’ published at the beginning of 2021.

Over 18% of the respondents agree that agility scale operations with respect to market demands and over 17% agree that flexibility to customize products to consumer needs is the first crucial strategic objective.

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In fact, among the surveyed respondents, 20% are doubling down on digital technology on multiple fronts, while 60% are selectively implementing the digital technology for specific objectives. 

The pandemic has forced the companies to rethink their current strategies to reach their end goal and introduce new processes coupled with digital solutions. The companies that were once following the traditional operations have to go digital to sustain the market and manage the pandemic’s challenges.

Digitization is the Buzzword

With remote work-life becoming the next big thing ever since the COVID-19 pandemic hit the world, digitization of business processes has become essential — from being a choice. 

The traditional ISA-95 standard for integrating enterprise with the control systems has taken a more modern approach, particularly the one with digitization through the layers.

According to a whitepaper by SAP, the traditional ISA-95 stack has shifted to a modern digital production platform with connected systems and data lakes.

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While the fundamental structure of the ISA-95 stack is still retained, digitization across the manufacturing, data storage, distribution networks and integrations have revamped the entire production flow with digital technology.

Some of the early adopters who predicted the outcomes of the pandemic were able to manage their production, distribution and supply chain far better. They could get ahead of the game, like a global conglomerate in CPG that simulated a virtual digital twin in the supply chain. With a digital twin, the company was able to position itself better with cost-efficient, sustainable operations digitized to the core.

Survival During the Pandemic with IoT & Edge Technology

The pandemic brought several complexities in running a manufacturing unit like limited workforce, uncertain demands and supply chain issues. 

This is when many companies started implementing new technologies like IoT, edge computing, machine learning and cloud technology. These technologies support the onboarding, connectivity and equipment management by inculcating predictive analysis and triggering mechanisms to prevent mechanical issues.

The edge technology allows real-time processing of sensor and actuator data, which are then relied on by the controllers to facilitate autonomous decision making. With cloud connected with edge computing, data-driven decisions and operational logic executions were made more manageable. This also enabled an efficient human-machine interface allowing people to monitor the data anywhere and reducing the number of people on the shop floor, which brings us to the next point.

Remote Workplace Becoming the Norm

Unlike most other sectors, the manufacturing industry is faced with a major problem — the need for a human presence inside manufacturing units in the middle of a life-threatening pandemic. While many sectors could implement the remote work culture, it’s a challenging walk for manufacturers. 

The element of human vulnerability and quick spreading of the coronavirus put a deter on the industry developments. 39% of the manufacturers have halted the Industry 4.0 implementations due to the remote work culture and travel restrictions. 

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In the times when remote workforce is becoming normal across many other industries, the manufacturing and supply chain sectors need IoT and Artificial Intelligence (AI) models to spreadhead the innovations. The focus of survival post-COVID depends on how soon businesses can adapt to the new norm of remote work culture with IoT, AI and cloud computing. 

AI and machine learning development services can act fast to fix issues and control operations from anywhere in the world, with only a small workforce left on the shop floor. The automation of the supply chain, demand and manufacturing process can create an efficient, seamless system that functions with minimal error.

Integrated Intelligence Across the Organization

Smart manufacturing creates an integrated solution and accelerates product development with no or fewer human intervention. When risking the employees’ lives is weighed against the scale of the business survival, intelligent systems are the answers.

With an integrated and automated manufacturing unit with data fed into the cloud, the process of control and operations will be simple and easy. Employees can swiftly monitor real-time data, automate decisions to be made without the need for vigilant monitoring and present an opportunity to detect and fix problems sooner than they occur.

By integrating the supply chain with the production unit and backed with data analytics, businesses can now fast forward their involvement in day-to-day operations and find better ways to manage the uncertainty caused by the pandemic.

Many companies are now shifting to smart solutions in parts of the manufacturing to test, deploy and implement. And it’s only a matter of time before standalone smart manufacturing units with wholesome automation emerge.

What is the Way Forward?

There’s no looking back with Industry 4.0 transformation during the pandemic. Manufacturing organizations have to figure out a way to use real-time data for integration and automation, both of which become the two main objectives of most units. 

With support from the right resources, technologies and right people, the manufacturing industry can sustain the pandemic and even accelerate the development to the point where high profits are reaped with minimal intervention operations.

The best way forward is to digitize the operations, if you haven’t yet, in rapid iterations to test and expand. Such an approach would immensely improve the chances of meeting the objectives quicker and in the best way possible.

If you are looking for cybersecurity or industry 4.0 consultants, speak to one of our experts today!

Cybersecurity and Industry 4.0

The massive shift towards automation and technology across all industries faced its most significant challenge with the COVID-19 pandemic. The resilience, robustness, and maturity of the Industry 4.0 technologies to handle real business use cases put them to their most significant challenges to date and the technologies delivered. 

Based on McKinsey’s independent study, businesses that shifted to implementing industry 4.0 solutions have overcome them largely.

This is the closest we have ever been to Industry 4.0, with the pandemic acting as an inflection point in its adoption. 

According to the McKinsey study, more than 94% of respondents felt that Industry 4.0 had helped them keep their operations running during the crisis.

And 56% said these technologies had been critical to their crisis responses. The global COVID-19 pandemic acted as a reality check for businesses and their efforts towards Industry 4.0, with early adopters reaping the most benefits. 

Threats in Technology World

As more and more businesses gain trust in industry 4.0, the large-scale adoption of their technology increases. While a lot safer and more efficient than other options, technologies for Industry 4.0 also come with their own risks and threats. Awareness of cybersecurity risks and controlling these technologies’ hazards should be a top priority for all businesses.

Some threats that expedited in recent times:

1. Covid Lockdowns: 

Countries imposed lockdowns forced many businesses to shift to the online medium overnight to continue running their businesses. Often businesses were new and not used to the digital world.

And a number of them compromised the quality of platforms’ security and made themselves susceptible to cybersecurity threats, data leaks, etc., by not focusing on safety. 

According to a report by Deloitte, more than half a million video conferencing users globally were affected by breaches between February and May 2020 alone, and their personal data was stolen and sold on the digital web.  

2. Uncontrolled Data Explosion: 

There was a massive shift in businesses and a massive shift of users to the online world. The volume of online transactions went high, and all companies had to scale up their online presence and handle large amounts of data. 

It is estimated that one in 36 cell phones has high-risk applications installed. 

And about 80% of all web application breaches use stolen credentials. Not correctly handling large amounts of data, like not verifying user profiles, can create vulnerabilities for online businesses and users. It is easy to make one wrong decision, and before you know it, you become a cybersecurity attack target. 

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3. Unsafe Entry Points:

The Internet of Things and the adoption of intelligent devices are integral to the shift to Industry 4.0. They are also one of the most susceptible to cyber risks. 

In 2020, according to the latest Nokia Threat Report, the Internet of Things (IoT) was responsible for 32.72% of all infections observed in mobile networks, with the number of affected devices suffering an increase of over 100%. 

With the increasing proliferation of IoT, the report expects the number of IoT infections to continue growing dramatically.

With the market cap of Industry 4.0 expected to reach $214 billion by the end of 2023 and increasing access to more and more data because of the pandemic, the number of cyberattacks has grown considerably. 

TechRepublic reported a 667% rise in spear-phishing attacks in March 2020 alone, and by April, the FBI had seen a 400% increase in cyber attacks. All in all, roughly 70% of organizations hosting data or workloads in the public cloud experienced a security incident last year. 

Managing cyber risk in the hyperconnected world of Industry 4.0 seems daunting. It is imperative to take immediate action to mitigate risks as much as possible. 

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Ways to Stop Cybersecurity Attacks

Here are some of the top techniques recommended by Forbes that we can implement to stop cybersecurity attacks the best we can:

1. Agile Cybersecurity Strategies:

Not so long ago, reviewing and updating cybersecurity strategies during an annual audit was acceptable. 

But in today’s continuously changing and updating threat landscape, risks get updated and improved every minute. Having a continually updated, frequently visited agile cybersecurity strategy is a necessity. 

Whenever strategic insights and intelligence can significantly affect a company’s risk, we should consider harnessing cyber threat discovery to the fullest.

2. Careful Monitoring of Vulnerabilities

Any device, application, or software with direct, remote, or even indirect access to the organization’s systems needs close monitoring. 

Mapping out the entire overlay of connection points allows security teams to evaluate weaknesses and tighten controls. 

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3. Controlling Access

Millions of industrial sensors are deployed to collect data and relay information from one endpoint to another. It becomes vital that one edge device’s vulnerabilities and shortcomings do not jeopardize the entire ecosystem’s security. 

The organization must ensure that these devices residing at the network’s geographically dispersed edge don’t interfere with the system’s core functioning. Regular software patch-ups and vulnerability assessments must also be frequently done by the business to avoid hacking activities.

4. Usage of AI/ML

Technology advancement in risk containerization, threat segmentation, network zoning, and profiling has led to their extensive utilization in strengthening a company’s cyber posture. Organizations also use language recognition through NLP and behavioral pattern mapping to improve risk management techniques and policies.

Preventing cyber attacks and improving cybersecurity have always been a concern for businesses in the digital world. With the increasing adoption of industry 4.0, the threats and stakes have also magnified. Our responsibility is to ensure that our data and our user’s data remain safe, and we must stay vigilant and observant.

If you are looking for cybersecurity or industry 4.0 consultants, speak to one of our experts today!

SPACs: Wall Street’s Hottest Trend or a Looming Bubble?

Did you know that market analysts have already declared that 2021 is the year of SPACs? Today, many private companies are bypassing the traditional IPO and going public through SPAC. Recently, the flexible workspace provider, WeWork, has announced to go public via a merger with SPAC called BowX Acquisition. The company took this decision after a failed attempt at IPO in 2019. Since then, the company’s valuation has plunged from $47 billion to $9 billion! And why did this happen? Why are companies choosing SPAC over IPO?

Let’s dive in further and answer all your doubts regarding Wall Street’s latest trend.

What is a SPAC?

Investors set up a shell corporation, popularly known as a SPAC or special-purpose acquisition company, with the sole purpose to raise capital through an IPO, and acquire one or more companies and operating businesses. SPACs are often referred to as “blank-check companies”, shifting fortunes on Wall Street. In simple words, a SPAC doesn’t have any commercial operations as it neither makes a product nor sells one. They don’t even have stated targets for acquisition. The Security and Exchange Commission (SEC) states that SPACs do not have any assets other than cash and limited investments, including the proceedings from IPO. The investors in the field typically include the likes of private equity funds to the general public. 

Conventionally, SPACs have two years to complete the acquisition or they have to return the funds to the investors. Did you know that in the year 2020, SPAC IPOs in the United States raised almost twice as much as they raised in the previous 10 years combined and had already surpassed 2019 levels by March 2021? 

How Does a Typical SPAC Timeline Look Like?

SPAC Formation and Funding

Generally, a SPAC is formed by a group of sponsors, investors, private equity firms, or venture capitalists with nominal capital – typically translating into approximately 20% in the SPAC. These are also known as ‘founder shares’. The remaining 80% is held by public shareholders via ‘units’ offered in an IPO. 

SPAC IPO

While going through the traditional IPO process, investors don’t publicly identify the companies they are looking for an acquisition to avoid the perplexing process with the SEC. The investment of this IPO is typically based on the sector, geography, technology, and even the sponsor’s background and experience.

Acquisition Search and Finalization

Usually, SPACs have a period of two years to search for a private company to merge with or acquire. Later, the merger should be able to make the company public as in the process, the company will become a part of the publicly traded SPAC. Once the company has been identified for acquisition, the investors announce it and the shareholders should approve the deal. However, in some cases, the SPAC has to raise additional money for the complete acquisition of the company.

KiwiTech recently hosted a curated panel focused on SPACs as an exit strategy for tech companies. During the panel discussion, Christine Y. Zhao, CFO, Edoc Acquisition Corp, added the delusion impact to a typical deal structure relating to, “Whether the target company chose the right SPAC to merge with, there’s synergy between the SPAC’s management team’s expertise and network area vs the target company’s operating sectors, as well as a pragmatic perspective on the sizes of them both.”

SPAC Merger

The SPAC merger closes and the company becomes public only when the shareholders approve of the merger and all the regulatory matters have been cleared. And if the SPAC merger isn’t completed in the given time of 2 years, the SPAC liquidates and the IPO proceeds are returned to the public shareholders. 

How do SPACs Work?

Generally, SPACs raise money to acquire the company through an IPO. The fun fact? The IPO investors usually don’t have any idea about the company they will be investing in. The IPO price for a SPAC stock is mostly $10 per share. The capital raised in an IPO is then placed in an interest-bearing trust account. The interest earned from this account can be later used as working capital for SPACs. The SPACs have two years to complete a deal or face liquidation if not completed in the given time frame.

Why are SPACs Suddenly Sprouting Up in the Market?

SPACs have been around for decades, but have recently become popular and attracting the big names of investors and businesses. Talking about the growth of SPACs in recent years, Anita Gupta, Co-founder of KiwiTech, asserted, “2020 has been an important year for SPACs with over $80 billion raised from around 240 deals, outperforming traditional IPOs that raised about $70 billion.”

SPACs were often considered as the last hope for small companies that often face troubles in raising money from the open market. But the complex market volatility in the unprecedented pandemic times made many companies postpone their initial public offering, fearing it could negatively affect their stock’s debut. And that is why many companies choose SPAC over traditional IPOs as it allows them to go public with fewer hassles and generate capital from the open market. In fact, the average SPAC IPO was $336 million in the year 2020, as compared to $230 million in 2019.

What are the Advantages of a SPAC?

Apart from being a viable alternative to traditional IPOs, SPACs do bring in various benefits for the investment community:

Hassle-Free Public Listing

SPACs offer a much better approach for companies to go public over traditional IPOs that encounter some market and pricing risks. 

Good Source of Capital

Through the open market, SPACs provide equity capital for the growth of the company and interests that can be utilized as working capital. With permanent capital, they allow the management to focus more on long-term value creation as well.

Uncomplicated Time Frames

Through SPACs, it’s possible to mitigate the procedures involved in traditional IPOs as a private company can easily merge into a shell company, i.e. already a publicly traded company. Even the registration and paperwork required for SPAC IPO can be completed in a matter of a few weeks.

Poor SPAC Performance

Despite the rise during the global pandemic in 2020, SPACs have been seeing the earth in recent months. Here’s a record of their performance through April 1.


SPAC filings
Source: Bloomberg
  1. For a typical mid-size SPAC of around $300 million, the percentage fee and flat fee costs around 3%-5%, which is very high considering the overall investment. 
  2. In recent weeks, 14 out of 15 SPACs traded below the $10 IPO price. 
  3. According to a Goldman Sachs Report, SPACs post-merger underperform the broader market by 24%. 
  4. SPACs have filed plans to raise $8.4 billion through US IPOs, with a major decline of 36% from the last few weeks and this is their lowest tally since January.

Winding Up

SPACs are taking the town by storm and the future is full of anticipations around their existence. While these public shells seem to be recreating the rising sun on the horizon of the stock market, there are risks and challenges associated with them as well. If you would like your business to take the traditional route of finding investment, making a pitch at a Demo Day can be fruitful.

As more and more renowned investors and hedge fund managers continue to invade the SPAC space, do you think this new vogue is here to stay? Or, is it just a bubble that is about to burst? Let us know in the comments section. 

KiwiTech has helped hundreds of entrepreneurs connect with investors through its various events involving SPACs, VCs, and family offices. If you are actively raising capital, click here to check out all our upcoming events!