1. The impact of Industry 4.0 on the SMEs in the V4 countries
V4 Conference
17th November 2017.

2. Challenges and opportunities
Industry Innovation, digitization and networking in the craft industry
Challenges and opportunities

3. Fundamental findings
Industry 4.0. The most important tools for the implementation of technological renewal are digitization and networking.
The main purpose of our conference is to investigate this toolbox from the point of view of family, micro and small businesses and crafts, in the common economic area of the V4 countries.

4. Fundamental findings
The use of this toolbox is inevitable for small businesses.
Digitization is the biggest challenge for family, micro and small businesses, it is the most important prerequisite for their market survival and competitiveness, but if they can keep up, this could bring great opportunities for them.

5. What is digitization and what is the impact of that?
What does digitization mean?
It is about the transformation of the whole world of work and businesses, including communication structures, in such a way that data and working conditions are transformed into readable and executable forms for machines. The process also leads to the creation of artificial intelligence.

6. What is digitization and what is the impact of that?
Digitization changes not only the world of work, but it also affects the whole society.
Information and communication technologies can process, store and transmit the increasing amount of data.

7. What is digitization and what is the impact of that?
This changes our working equipment, raw materials, the look and the magnitude of objects, the possibilities for people to communicate with each other, that is altogether, our entire social, production, service and cultural life. According to some data, there are already 20 billion devices in use connected to the Internet. By 2030, the number of these devices can reach one trillion. / From computers to refrigerators or even cars, the digitization process reaches all devices in the world./

8. What is digitization and what is the impact of that?
In production and distribution, there have been world-wide businesses being created. But once, all of them started to emerge from a small start-up business and in a few years they became world-wide companies networking the whole world.

9. What can digitization mean for crafts and small businesses?
Global companies are also pushing into the traditional handicrafts areas. They implement new, efficient, and therefore, cheaper business models, while, at the same time, they reach a large number of customers, use robots in production, and apply newly-developed materials.

10. What can digitization mean for crafts and small businesses?
In order to maintain their competitiveness, small companies, as market participants, are under pressure. They have to face new digital applications for their working tools, as well as in fields such as administration, internal work organization, external and internal communication, and mainly the delivery of their products and the services provided to consumers.

11. What can digitization mean for crafts and small businesses?
Digitization has also penetrated into the service and repairing sector. For example, the Amazon Company has provided handicrafts services in the US through the Internet since 2015, Google has also begun to deal with networking of household utensils.

12. What can digitization mean for crafts and small businesses?
At the same time, communication possibilities between customers and companies are changing rapidly, so personalized needs may show an increasing tendency. It also opens up space for crafts companies, if they can keep up with technological advances in digitization and learn how to use them.

13. What can digitization mean for crafts and small businesses?
Digitization also allows even the smallest company to reach a broader target audience, which uses smartphones, the Internet and other digital devices. It can offer them small serial number self-developed products or fully customized services.

14. What is the magnitude of family, micro and small businesses in the economy?
The new world places responsibilities and tasks on everyone: governments, banks, professional organizations, leaders of the businesses, employees of companies, training institutions, trainers, the mass media, families, and the whole society.

15. What is the magnitude of family, micro and small businesses in the economy?
For this reason, while we consider what to do about family, micro and small businesses so as to make them avoid becoming losers in this process, we would like to draw attention to these enterprises and highlight their significance and importance for the society.

16. What is the magnitude of family, micro and small businesses in the economy?
In Hungary, according to the Statistical Yearbook, 90% of the approximately 540,000 enterprises are micro enterprises having less than 10 employees and 90% of micro enterprises employ less than 4 people. These enterprises produce at least 30% of GDP. Their share of employment is at least 50%. In the coming decades, they will also play a significant role in local service, repair and supply activities.

17. What is the magnitude of family, micro and small businesses in the economy?
Therefore, the important issue in the Hungarian economy is the degree of attention paid to this economic sector in Industry 4.0, and whether in the process of digitization and innovation, it will be possible to deliver them such projects which support innovation and training opportunities.

18. What can be done for small businesses?
First of all, information about this new world should be transmitted as widely as possible. Attention should be paid to the areas in which the state accelerates digitization in data supply, taxation and other fields and to small businesses, as well, whether they are prepared to fulfill these state requirements on time. Do they have enough resources for hardware and software development? Is there any support system for the practice of the new working methods? This also applies to the submission of applications. Businesses' own professional organizations would be able to provide more effective assistance and services, if they would have received support to do so.

19. What can be done for small businesses?
Collecting information on small businesses should also be "traded", which requires cross-disciplinary surveys among them. Today, it is difficult to get a comprehensive picture about the extent of the family, micro and small businesses in the digitization process. There are typical technologically advanced professions such as the automotive industry, water and gas installation, refrigeration, heating, electricity, and so on. However, there are some professions, like part of the construction industry, where digitization is being implemented slower. In order to carry out the surveys, it is recommended to involve volunteer professional organizations as widely as possible.

20. What can be done for small businesses?
There should be an effective training system developed in the field of digitization, which focuses on the most important digital competencies with special training materials, while taking the specific needs of small businesses into account and helping them acquire the basic digital skills. It is important to implement training not only for the owners, but also for the staff, with special attention to older workers. As a result of the increasing labor shortage, the employment of older workers will also be appreciated in the future, so it is essential for them to acquire digital knowledge. It is advisable to involve professional organizations in the organization of training.

21. What can be done for small businesses?
To acquire digitized new tools and technological innovation, available and administratively easy-to-use projects and support possibilities are needed.
With the involvement of professional organizations, assistance is needed to establish new types of cooperation opportunities: in sales and procurement, building relationships with large corporations, building synergies between each other, and exploring new directions of activity.

22. Robotization and employment
One of the most important issues is the impact of digitization and robotics on employment, and the labor market situation of small businesses. It is clear that trades are being transformed, automation of large-scale production eliminates workplaces. At the same time, digitization can create new jobs.

23. Robotization and employment
Currently, small businesses are experiencing a growing lack of skilled labor, especially in areas related to manual labor. There is also a shortage of staff among unskilled trained workers. However, the development of robotic technology can decrease difficulties associated with physical work, the acquisition of expertise necessary for the use of robotic technology may be problematic, if training does not respond to market demands quickly.

24. Robotization and employment
Generally, the analyzes and Industry 4.0 strategy focus on production, while small businesses play a decisive role in the service sector. Therefore, it is also important to enhance that the development of digitization and robotic technology should also be analyzed in the service sector, especially in the case of small businesses, which provide retail services for the population.

25. Robotization and employment
In our opinion, it can be said that in the next decades, robotization will not be able to replace the repair-installing small-scale industry. Certainly, however, many craft trades have to be renewed, they need to broaden their profile, which requires ever-increasing professional training and investment. It is expected that automation and digital technology will enter into the internal life of even the smallest businesses, eliminating certain organizational and administrative works permanently. This will also affect the internal workforce situation of small businesses.

26. Framework conditions for digitization
The success of digitization depends to a large extent on the framework conditions, in which the smallest businesses are active.

27. Framework conditions for digitization
It is crucial to have Internet coverage provided in all areas and to make even the smallest businesses have Internet packages under the same conditions as the big ones. It is also very important that when small ones switch to more digitized machines, they should have access to safe Internet technology. The use of "second-tier" technology will greatly reduce customer loyalty, as well as competitiveness.

28. Framework conditions for digitization
In the digital world, the importance of corporate and personal data protection has increased. This is why it is very important who has access to the data and who can use it. Laws and regulations must ensure positive discrimination in the protection of small ones.

29. Thank you for your attention!