The next industrial revolution will introduce “smart factories” in which computers and robotics communicating wirelessly will handle physical processes with very little input from human operators, leaving few job opportunities for unskilled workers, executives of German industrial giants said during a briefing in Phnom Penh on Friday.

The event, titled “Industry 4.0, the Next Level of Manufacturing”, focused on the future of the internet and advanced technologies in the manufacturing sector, including its impact on human labour.

Markus Lorenzini, president and CEO of Siemens Thailand, said the “Fourth Industrial Revolution” was already in progress and would bring increased flexibility and efficiency to industry while increasing the demand for skilled labour.

“The digital transformation of industry is not an option. It’s already happening,” he asserted as videos of unmanned machines operating autonomously on a factory floor in present-day Germany played on a screen behind him.

He said while past industrial revolutions were built on cheap labour, a tendency that saw huge investments by developed economies into low-income countries such as Cambodia, with the advent of Industry 4.0 and an internet-enabled robotic workforce “cheap labour . . . should become obsolete”.

Nikolay Kurnosov, general manager of Bosch Rexroth Vietnam, stressed that human labour would still be necessary even as factories shift to remotely operated robotics, but there would be no demand for an unskilled workforce.

“People are key players in the new industrial revolution,” he said. “We don’t need simple jobs anymore. We need skilled workers.”

He said Bosch expects there will be more manufacturing jobs in the future than there are today, but the positions will require technical skills rather than nimble hands.

Economists predict the coming industrial revolution will prove particularly challenging for Cambodia, which has positioned itself as a low-cost manufacturing destination.

Mey Kalyan, senior adviser to Cambodia’s Supreme National Economic Council, said Cambodia will struggle to find its footing as industry becomes increasingly reliant on computers and robotics.

“Machine-powered manufacturing will have a severe impact on socioeconomic life . . . [and] of course the impact will be more severe on poorer countries as they have only limited means and resources to respond,” he said.

He warned that Industry 4.0 could disrupt the traditional labour market in these countries and he was “afraid the rich-poor gap in the world will be widened”.

David Van, executive director of Deewee Management Consultants, said while Cambodia’s youthful population remained a potentially positive economic force, the current lack of vocational training would need to be addressed in order to meet industry’s growing demand for skilled labour.

“Vocational training has been in serious deficit here, despite some donors’ massive grants and technical assistance in this domain,” he said.

“The challenge is training our massive young workforce, which remains our trump card, since over 50 percent of [Cambodia’s] population is below 30 years old.”