How Brazil’s Small Enterprises Benefit from Fourth Industrial Revolution

Fourth Industrial Revolution. Photo: WEF
Fourth Industrial Revolution. Photo: WEF

The Ministry of Economy and the State of São Paulo have partnered with the World Economic Forum (WEF) to co-design new policies to help small and medium-sized enterprises (SMEs) keep up with the pace of technology changes in the Fourth Industrial Revolution.

SMEs represent 98.5% of companies in Brazil and more than 90% of all companies globally. In emerging markets, these companies are the primary drivers of economic opportunity and social mobility, creating seven out of every 10 jobs, according to the World Bank.

Unfortunately, these companies are struggling to embrace the Fourth Industrial Revolution. Research by Eurostat reveals that larger businesses (over 500 employees) are six times more likely to leverage Industrial IoT (Internet of Things) than SMEs.

Over the course of the last year, more than a dozen companies, governments, organizations and universities have collaborated with the World Economic Forum Centre for the Fourth Industrial Revolution to co-design an open-sourced policy toolkit.

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Industry 4.0

In the current phase of industrial automation, many leading companies of the world are using advanced computing models to computerize their manufacturing processes. The total automation of the industrial systems is supposed to herald the fourth industrial revolution, referred to as “Industry 4.0” or I4.0, or simply I4.

In the Industry 4.0 phase, the traditional factories will operate as smart factories and use contemporary technologies such as the Internet of Things, Cloud Computing, Artificial Intelligence (AI), and Cognitive Computing. The smart factories aim to reduce their dependence on human workforce.

The new pilot programme will trial 11 specific policy interventions from the toolkit including: three policies that provide innovative financial support; three policies that give SMEs access to expert support; three policies that encourage industry collaboration; and two policies that build awareness and train employees for the Fourth Industrial Revolution.

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Led by the Ministry of Economy of Brazil and the State of São Paulo, the pilot will start with 130 small and medium-sized manufacturing companies in Brazil, with the aim to increase to 2,000 companies by 2021.

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Rakesh Raman