What is Industry 5.0 and How Does it Work?

Industry 5.0 is a term used to describe the Fifth Industrial Revolution. It’s a digital transformation heavily influenced by the rise of Artificial Intelligence, Big Data, and the Internet of Things.

The main idea behind Industry 5.0 is that companies will become more efficient by using AI and automation to do the work for them. This change will lead to higher competitiveness in the Industry and higher profits for those companies that can make it through the transition successfully.

The German Ministry of Economic Affairs and Energy coined the term “Industry 5.0” in a 2016 report published to help stakeholders understand the automation potential of Industry 4.0 and its implications on the labour market. In contrast to Industry 4.0, industry 5.0 will be based on AI-powered decision-making rather than automation and will create new types of work opportunities.

Industry 5.0 vs Industry 4.0

The foundations of Industry 4.0 focus on connectivity between cyber-physical systems through the Internet of Things (IoT) or Industrial Internet of Things (IIoT). Industry 4.0 laid the foundation for human-machine collaboration, machine-to-machine cooperation, and connectivity between the plant floor, logistics, supply chain management provider, and end-user.

On the other hand, Industry 5.0 involves technologies that enter the scene and improve the capacity for immersion, hyper-personalisation and interconnection. Industry 5.0 addresses the integration of human creativity and robotic precision, working towards a single solution that will be the demand of the next decade.

We are on the verge of a new industrial revolution that seems to be powered by Artificial Intelligence and Data Analytics. Change is happening faster than ever. More than 80% of all jobs have required digital skills since 2020. As such, people must update their knowledge to continue to succeed in business. Evolving technology has changed the way we live and work.

How will the human labour market adapt to the need for constant change and innovation? First, people must enhance their education to succeed in business. Industry 4.0 and automation have led to a decrease in the number of people employed in some jobs. As a result, digital education has become more critical than ever to keep up with the continuous change.

Benefits of Industry 5.0

The benefits of implementing Industry 5.0 solutions are many and varied. For example, the Industry can use it to improve employees productivity, reduce manufacturing costs, and increase the quality of products. Moreover, the cost savings can be significant. For example, a manufacturer could cut costs by 40% by implementing Industry 5.0 solutions and optimising the use of materials in assembly operations. In addition, reductions in the number of machines needed would save manufacturing companies approximately $450 million per year and cut energy consumption equivalent to annual US natural gas consumption.

Industry accounts for approximately 20% of the European Union’s GDP, a key element in job creation and growth strategy. Therefore, the European Industry needs to adapt to meet today’s challenges. To remain a key player, the Industry needs to maintain competitiveness, with particular attention to the effects of the irruption of technology. Effects such as Climate Change’s impact on the workforce’s displacement produced in specific sectors.

How Does Industry 5.0 Impact Businesses?

Industry 5.0 is affecting how we work, live, and play today. It’s altering how we produce and utilise things and will affect our work life and forms of entertainment in the future.

As a result of Industry 5.0, manufacturers can operate more efficiently, dynamically, and innovatively as they create and distribute their goods.

  • These technologies include:
  • Advanced Sensors
  • Artificial Intelligence
  • Computer vision
  • Big Data Analytics
  • Cybersecurity Systems (e.g., Industrial Control Systems)
  • Remote Operated Vehicles
  • Smart Factories
  • 3D Printing
  • Virtual Reality and Augmented Reality

Advanced sensors

The Industrial Internet of Things (IIoT) is enabling real-time data integration from machines, buildings, and other equipment sensors. In addition, the increased use of sensors in the Industry drives the need for faster and more reliable communication methods.

Big data analytics

A Big Data analytics platform hosts vast amounts of information from various sources. It provides tools to search, compare, and analyse that data. This technology can enable organisations to make better decisions and improve efficiency and performance while reducing costs. The increased use of Big Data Analytics enables organisations to gain valuable insights into their supply chains and operations, accelerate growth through new products or services, improve the customer experience with personalised service, and manage resources more efficiently.

What is required in Industry 5.0?

Trained personnel

Virtual education will become widespread, and as a result, employee training will benefit. Companies can train their employees without stopping production and incurring lower costs. In addition, employees will be able to receive safer training that minimises the risk of injury during training. The resulting interactive learning environments will also boost employee motivation and communication.

The generation of a myriad of employment positions related to the interaction with robotic systems and Artificial Intelligence, among other technologies, are also expected.

The right technology

The term “cobots” has been coined with Industry 5.0: collaborative robots designed for simple and intuitive interaction with humans.

This technology considers humans for processes such as plant safety and goals. In a certain way, they act as apprentices, capable of observing human actions and replicating them, helping operators.

The Best Ways to Prepare Your Company for the Future of the Industrial Revolution

Companies must prepare for the future of the Industrial Revolution by looking at how they can use human and machine capabilities together to their advantage. Additionally, they must embrace these technologies to remain competitive and relevant.

With industry 4.0, we understood that technology by itself does nothing since machines depend on people for their maintenance. This means that the devices cannot be fully automated.

The Industry 5.0 approach is to create value beyond financial results with a human-centred strategy. This strategy seeks to improve the quality of life of people involved in industrial processes. This approach wants to help them understand their work better, facilitating task management and reducing the probability of errors when completing work tasks. The Industry 5.0 approach also aims to improve the quality of life for society as a whole.


Industry 5.0 is expected to impact industries in a way that will create new jobs and lower the overall cost of doing business. It involves many technologies, including robotics, AI, sensors, the internet of things, the cloud, big data analytics, and virtual reality. However, the implementation of Industry 5.0 solutions is not a one-size-fits-all endeavour. Although solutions will vary by Industry, they will have a similar end goal.

For success, businesses need to be proactive and make the right decisions while planning their investment accordingly. The best way to do this is to engage a trusted partner who can help you navigate Industry 5.0.

Does it seem challenging for you and your business to adapt? You’re not alone.

Here at BARO, part of our mission is to help our customers to embrace, adapt, and overcome these challenges. We are partners in your success. We offer a complete range of computer vision and hardware products, including data acquisition, quality control, mobile robot platforms, sensors, guidance operator and staff training. With our extensive portfolio, we can help you achieve your goals.

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