In the context of Industry 5.0, skills development is not solely focused on equipping frontline workers with digital competencies; it also seeks to deepen the integration of human abilities within cyber-physical systems at every level of a business. This conversation between Mike Hepworth from KNEIA and Chris Land from Anglia Ruskin University highlights the evolving needs of management in this new industrial era, where the human element is not replaced but empowered by technology.
Chris
Mike
Effective leadership requires managers, especially within SMEs, to understand the technical and economic implications of technology adoption while recognising the irreplaceable value of human craftsmanship and experience. This nuanced perspective redefines the role of digital tools, not as replacements but as collaborative assets that augment human capabilities and contribute to organisational resilience and innovation.
Mike: Chris, could you begin by explaining the approach to skills development in Industry 5.0, particularly in regard to both frontline and management roles?
Chris: In Industry 5.0, skills development isn't just about digital proficiency for frontline workers; it's about enhancing the human component—what we might call the 'biotic element' in a cyber-physical system—across all levels, including management. While frontline workers do need digital skills for integrated cyber-physical systems, for example to access and analyse data from sensors or from Programmable Logic Controllers (PLCs), managers also require a better grasp of the technologies themselves. As a minimum they need to understand what a technology can do, and at what cost. Particularly in SMEs, managers and owners often lack the knowledge to evaluate the economic and social, as well as the strictly technical, implications of innovation. For instance, understanding how a new technology affects the business requires more than basic Return on Investment metrics; it demands a broader perspective that includes strategic expansion, not just cost savings.
Mike: How do managers typically approach the cost-benefit analysis of new technologies?
Chris: Many still rely on basic Return on Investment models, seeing technology as a straightforward replacement for workers. They might justify a €50,000 investment by equating it to the cost of two entry-level salaries, assuming they’ll cut staff to fund the upgrade. However, if the goal is to augment the workforce rather than replace it, managers need to think differently, shifting to a mindset where humans and machines work together, and where the human skills of working with machines, and as part of an integrated system, are understood as an investment. Too often the human employees are treated as the most easily replaced element in a system, but we have repeatedly seen the value of human skills being under-appreciated by managers. This doesn’t just affect staff morale, it directly impacts the quality and consistency of production and, ultimately, the firm’s competitiveness.
Mike: What challenges do managers face in fully understanding these technologies and implementing them effectively?
Chris: One of the major challenges is the complexity of these technologies and the specific skills they require. Advanced tools like CAD/CAM systems and 3D printers involve more than just digital proficiency; they also demand skills for maintenance, operation, and troubleshooting. Managers need to be aware of these requirements to ensure their employees are adequately prepared to handle and maintain these systems. The promise of technologies is often over-sold, so it is also easy to underestimate the amount of finishing work that is required on components machined by a water-jet cutter, or 3D printer. Often these will need quite traditional metalworking skills to finish the product to an acceptable quality but that can’t be captured fully in the digital design.
Mike: Do managers sometimes underestimate the skills already present within their workforce?
Chris: Yes, very often. Managers may view certain tasks as straightforward, underestimating the level of expertise required. For example, they might assume that mastering a task takes only a few weeks, when in reality it could take years. Producing a high-quality, consistent product often requires skills that are difficult to replicate, and technology alone can’t replace the nuances of human craftsmanship.
Mike: Could you provide an example of where this misperception might occur?
Chris: Well, take a manager observing a production process on screen, through an enterprise system, but not seeing it on the shop floor. They might conclude that a seemingly simple task could be automated. However, something like achieving a precise, polished finish might demand skills acquired over years and a tacit understanding of metallurgy and how the grain of the metal shapes the processing needed and the final product. This is something a machine alone can't replicate. This kind of oversight can lead to errors in machine implementation, with quality issues emerging from an undervaluing of human craftsmanship.
Mike: So even in highly automated environments, traditional skills remain necessary?
Chris: Absolutely. For instance, advanced 3D printing with powder-bed technology involves handling fine powders, managing laser fusion, and dealing with safety hazards like fire risks. This isn't just about digital skills but also hands-on expertise in machine operation and maintenance. Digital tools are critical, but they don’t replace the need for technical, safety and maintenance skills.
Mike: How does this knowledge gap impact businesses when they implement new technologies?
Chris: When managers lack a comprehensive understanding of the skills required, it can disrupt operations. Machines like 3D printers or CAD/CAM systems can carry out basic tasks, but they don’t produce finished products independently. After initial processing, like cutting sheet metal, additional manual refinement is often needed. Managers need to anticipate both the digital setup and the physical finishing steps, or they risk underpreparing their workforce. Often this will mean listening to workers, who have the hands-on experience and skills, but too often there is a low-trust relationship with operators and the more distant managers are from the shopfloor, the more likely they are to trust abstract representations of the work, rather than risk getting directly involved in the physical production themselves. This can lead to over-estimating what new technology can really do.
Mike: What mindset should managers adopt to align with the goals of Industry 5.0?
Chris: Managers need to shift from a replacement mindset to a collaborative one, where human skills and automation work together. Industry 5.0 isn’t about replacing people but rather empowering them with advanced tools. Recognizing the importance of hands-on maintenance, troubleshooting, and adaptability is crucial for keeping automated systems efficient and productive. Upskilling should start with managers themselves—they need digital literacy and the ability to appreciate both the technology and the strengths of their workforce. What we usually call the ‘soft skills’ of management are just as important as the hard skills like coding.
Mike: Are there specific applications where this collaborative model is especially successful?
Chris: Yes, agriculture is a good example. A mobile robot can support human workers by collecting strawberry punnets for example, lightening their workload. However, the delicate task of picking strawberries still relies on human skill. Here, robots enhance productivity by working alongside humans rather than replacing them.
Mike: And for customized production, what approach do you recommend?
Chris: For companies focusing on high-quality, customized products, partial automation is often the best approach. Technology can handle repetitive tasks, allowing skilled workers to focus on craftsmanship. This aligns with Industry 5.0’s goal to enhance, not replace, human capabilities.
Mike: What are the main recommendations for policymakers and industry leaders to support this transition?
Chris: Investing in management training is essential. Managers must lead this shift with a collaborative outlook, where technology enhances rather than replaces human skills. Policies should prioritize adaptable strategies tailored to different industries, supporting both quality and process flexibility. This helps Industry 5.0 preserve and strengthen Europe’s skilled workforce. Given the complexity of new technologies, and the rate of change, however, it is unrealistic for all managers in SMEs to keep fully abreast of these changes. For that, we need further investment in intermediary organizations, like The Welding Institute, where cutting edge research combines with practice, and can work alongside businesses to find the right solutions for them, taking into account the social and economic factors of production, as well as the technical.
Mike: Are there additional skills that managers should develop to adopt Industry 5.0 principles?
Chris: Yes, managers should understand workforce skills, the limitations of automation, and the maintenance needs of new technology. They must also create an adaptive and secure environment around new tech. Cybersecurity, for instance, is crucial—especially for SMEs, where basic lapses, like visible passwords, can pose significant risks. Awareness of cybersecurity and workforce retention skills will become increasingly important, and these are nearly always about the human, rather than technology per se.
Mike: Is this especially relevant for SME managers?
Chris: Yes, most definitely. SME managers often lack dedicated HR resources, so they need both technical and HR skills to recruit and retain talent in the digital age. Organizations like the Chartered Management Institute could support SME leaders by offering training to help them identify skill gaps and adopt proactive Industry 5.0 practices.
Mike: So, it’s essential for SME managers to possess a broad skill set?
Chris: Exactly. To harness new technologies effectively, managers need a well-rounded understanding of both people and technology, enabling them to maintain productivity, safety, and quality. By blending human expertise with advanced tools, Industry 5.0 has the potential to reshape manufacturing in a way that is beneficial to both employers and employees.