Smart factories: growth and a framework for legal compliance

Smart factories are digitised manufacturing facilities. They are the foundation of Industry 4.0, integrating cutting edge technology (such as AI) to analyse and drive automated processes and continually improve itself with machine learning and the “Internet of Things” (IoT). The Internet of Things allows a network of internet connected devices to exchange data and information. IoT technology is found most familiarly in ‘smart homes’ however is adopted by businesses due to the significant increase in productivity and efficiency IoT technology provides.

The legal impact of smart factories from a corporate perspective is multifaceted. Given the increase in popularity of smart factories and their cutting-edge technologies, legal issues and risks are often complicated. For example, the integration of AI and IoT devices have significant data privacy and security concerns. They generate such vast amounts of data by their nature, which may be at risk of being shared if not incorporated correctly, and if stringent GDPR measures are not adhered to.

The very nature of smart factories leaves them vulnerable to potential cyber-attacks. The reliance on technology affirms the importance of companies having robust cybersecurity measures to protect themselves against cyber threats. It is all too common for companies to be held to ransom after hackers infiltrate their systems, threatening the release of sensitive information and potentially causing irrevocable damage to the company.

There are various steps companies can take to lower their risk of being a victim of a cyber-attack. These include:

• Carrying out cybersecurity assessments - these can help identify the risks and weaknesses in your company which may lead to a potential breach, and can provide recommendations of appropriate measures which can be put in place;

• Educate staff - inform them of the danger of breaches, especially in smart factories, and the standards all personnel must follow to prevent potential breaches;

• Continuously updating and improving your security systems - this is crucial to protect smart factories against potential breaches.

In summary, smart factories have the potential for companies to make significant advancements to improve a company’s capabilities, however they introduce new legal complexities to overcome. Companies need to understand and address the issues, mitigate legal risks before they can truly adopt smart factories and harness their impressive capabilities.