**5. Effects of industry 4.0**

Innovation and scientific advancements perform an essential role in businesses, sectors, and countries. However, the digital improvements and the increasing interconnectivity will bring additional challenges and upgrades to societies, since, Industry 4.0 (Ir 4.0) will significantly change the manufacturing systems in terms of design, processes, operations, and services. Industry 4.0 will lead to potential deep changes in a variety of fields outside of the industrial sector. Its influence and effect may be divided into six categories: (1) Industry sector, (2) Products and services, (3) Business models, entrepreneurship, and market competition, (4) Economies of nations, (5) Work environment, and (6) Skills development.

#### **5.1 The impact of industry 4.0 on the industrial sector**

The industry sector will be the first to feel the effects of Industry 4.0. This new industrial paradigm will usher in a vision of manufacturing that is decentralized and digitalized, with production elements that can autonomously govern themselves, trigger operations, and adapt to changes in their surroundings. Furthermore, the developing paradigm recommends fully integrating products and processes, altering industrial vision from mass production to mass customization, resulting in increased complexity [35]. Consequently, advanced technologies and the building of smart factories will have a significant impact on production processes and operations, providing for greater operational flexibility, and more efficient utilization of resources. Industry 4.0 will have a considerable effect on the production systems, supply chains, and industrial activities. This new paradigm is changing the current industrial landscape in three ways: (1) production digitization, (2) automation, and (3) integrating the manufacturing site to a larger supply chain. Industry 4.0, in this sense, entails complete network integration and real-time data sharing [1]. Productivity growth is at the core of each industrial revolution. The 4th industrial revolution, on the other hand, will influence the entire supply chain, from product creation and manufacturing to outbound logistics, in addition to enhancing productivity [36].

ROJKO, et al. (2020) used the vector autoregression model forecast for data from the manufacturing sector in the United States over the period (2008−2018) and concluded that, the share of manufacturing output and employment has declined, and that the manufacturing sector has reached a turning point, after which robotization can increase employment and labor productivity of workers while also stimulating further growth of their education levels. They concluded that the shift to Industry 4.0 has a significant impact on the growing demand for new knowledge and skills in order to boost productivity. As a result, anticipated growths of assessed manufacturing indicators imply that the negative effects of robotization in the recent past were only transient, as the Industry 4.0 age has begun. Nonetheless, further policies are needed to enable long-term industry development [37].

### **5.2 The impact of industry 4.0 on products and services**

This new industrial paradigm has a significant impact on products and services. Rapid changes in the economic landscape and dynamic market demands have resulted in an increased demand for the development of more complicated and intelligent products in recent years [36]. Products will become increasingly modular and configurable, allowing for mass customization to match individual consumer needs [35]. As a result, Industry 4.0 is defined by the emergence of new products and services as embedded systems that can become attentive and interactive, be managed, and tracked in real-time, optimize the entire value chain, and provide pertinent information about their status throughout their lifecycle [37].
