On July 14, the first international conference “Industry 5.0 in Ukraine” was held in Kyiv. The conference was organized by the Association of Industrial Automation of Ukraine with the support of the Ukrainian Cluster Alliance. The event took place within the framework of the Swiss-Ukrainian project “Strengthening MSME Business Associations in Ukraine (Phase II)”, implemented by the United Nations Development Program in Ukraine (UNDP) together with the Ministry of Economy of Ukraine and with the support of the Swiss government. More than 350 participants took part in the conference, 130 of them offline. As part of the conference, the participants signed the Manifesto on Ukraine’s transition to Industry 5.0, read the full report at the link.
Based on the results of discussions and on the developed provisions of the Manifesto regarding transition to Industry 5.0, the conference participants determined the following decisions and proposals:
- The Manifesto on Ukraine’s Transition to Industry 5.0 (signed on July 14, 2023) is a fundamental and guiding document for the further development of Ukrainian manufacturing and hi-tech sectors in Industry, Energy, Infrastructure and Logistics. In certain provisions, such as governance 5.0 and circular economy, we are talking about all real sectors of the economy. This document replaces the Industry 4.0 Charter of 2016 and significantly complements the Industry4Ukraine Manifesto of 2019. The participants of the conference call on other business associations, government organizations, scientific and educational institutions, public organizations to join the Manifesto.
- Transition to Industry 5.0 in many directions is possible without a gradual, consistent passage through 3.0 (full automation of production) and 4.0 (digital transformation as a change in business models through use of modern technologies such as artificial intelligence and Internet of Things). It is rather about changing the industrial paradigm of manufacturers and policy-makers at various levels, where the principles of sustainable development, stress resistance of value-added chains and ecosystems, orientation to needs of society, circular economy, and fair distribution of revenue begin to dominate as the basis of decisions. According to such approaches, technology is simply a tool for achieving the goals of sustainable development, and this is a fundamental difference from the approaches of Industry 4.0, where the predominant focus was on improving competitiveness and profitability of enterprises due to use of new technologies.
- Conference participants agree that Ukraine has great potential for transition to Industry 5.0, primarily due to factors such as a passionate and creative society, scientific, technical and educational potential, developed startup communities, thousands of qualified developers and integrators. The conference showcased a number of Industry 4.0-5.0 cases and this means that our innovators have to offer for domestic sectors; rather, it is a question of end users readiness and stimulation of market demand for new technologies and solutions.
- Conference participants see weakness of the State institutions as the biggest problem in transition to 5.0, which makes it impossible to coordinate the movement of all key stakeholders in the direction of advanced smart industries (regardless of 4.0 or 5.0). Despite numerous proposals since 2018-19 from the national movement “Industry 4.0 in Ukraine” and the Industry4Ukraine platform regarding development of Industry 4.0, numerous inclusions in State policies and strategies (including the National Economic Strategy 2030), none of them has been implemented . The main reason for the participants is the lack of strong institutions in this field in Ukraine. The participants of the conference propose to the government to create a State Agency of Industry 4.0 (5.0), as it exists in almost every EU country.
- The participants of the conference recognize that the paradigm of industrial transition 3.0 continues to dominate not only among policy-makers, but also among Ukrainian manufacturers. By focusing exclusively on 3.0 tools (such as industrial parks, development funds and localization of production), manufacturers are consolidating the backwardness of our industry, which is constantly growing. The conference clearly showed the consensus of participants from all target groups (politicians, government officials, scientists, business associations) regarding the highest priority of the manufacturing and its role as an engine of the economy and Recovery programs. This is unconditional progress from 2018 and is one of the main achievement of progressive communities in Ukraine over the past 5-7 years.
- Proposals for development, policy and strategy of the twin transition, and on which Ukraine has also made commitments to the EU, should include real implementation of the relevant instruments of industrial, innovative, digital and other policies. Conference participants emphasize that such tools are legislative changes to stimulate demand for innovation among industrial enterprises, targeted programs for development of networks of innovation clusters and digital innovation hubs (DIHs), networks of independent experts, improvement of R&D infrastructure, creation of industry accelerators, large-scale reskilling-upskilling programs, as well as implementation of technical standards of Industry 4.0 and 5.0.
- The weakness of Institutions and outdated industrial paradigms strengthen the raw material structure of the Ukrainian economy, increase the lag behind developed countries and reduce the country’s defense capability. Conference participants emphasize that better integration of innovation ecosystems with production sectors, including the defense-industrial complex, has been a challenge for 10+ years. The war in Ukraine clearly showed the country’s complete dependence on foreign supplies, and this is the consequence of the regular, systematic ignorance be the State of challenges to the development of industrial high-tech sectors, including the deployment of modern types of weapons in previous years. The war widens the gap between domestic innovators and manufacturers and leads to new losses of human capital. Accordingly, the government must take decisive measures to neutralize these risks and gaps. The participants of the conference state that in the latest versions of the Recovery programs there are no provisions on how the participants of innovative ecosystems will be integrated into large Recovery projects, and this already causes some anxiety. Instead, we welcome the creation of the first Accelerators in the Ministry of Defense and are ready to integrate them.
- The government needs to implement the best European practices on the twin transition much more vigorously. The Association of Industrial Automation of Ukraine (organizer of the conference and coordinator of the national Industry 4.0 movement) invites government organizations to joint actions on benchmarking and adopting the best practices of the State Agency of the Future Industry of Poland (FPPP), which has been our partner since 2019.
- The Ukrainian Cluster Alliance and our partner structures call on international donor organizations to provide maximum assistance to key actors of innovative ecosystems. We highly appreciate the help that is already provided, in particular, in the development of clusters in Ukraine. At the same time, our needs for development of innovative ecosystems, from development of high-quality analytics to supporting creation and development of such innovative structures as DIHs, industry accelerators, prototyping centers and testbeds, network of certified experts, etc., remain practically at zero level (see some demands in project portolio of UCA).
- Among the next priority steps in the next 3 months, the conference participants see:
- Development of a Position paper on the current state of Smart industries and ways to transition to Industry 5.0.
- Launching an advocacy campaign to integrate Smart industry tools and institutions into government strategies and plans for the next period.
- Development of a benchmarking analysis regarding role and functions of State Agency for Development of Smart Industries (based on the Polish experience).
- Expansion of the number of experts in the UCA committees on twin transition, innovation and internationalization with definition of work plans for 2024.
For questions about involvement in the activities of UCA committees, please contact info@clusters.org.ua
You can join the Manifesto on transition of Ukraine to Industry 5.0 by following the link.