Experts Highlight The Risks And Legal Implications From The Growth Of Industrial Data

The creation of more data and the use of Industry 4.0 technologies are providing huge opportunities for manufacturers to improve productivity and profitability - but according to a report by law firm Irwin Mitchell, many in the sector are risking huge fines and disruption because they’re unaware of their full legal implications.

The new ‘Going Fourth’ study, which is published today, aims to raise understanding about industry 4.0 technologies and help manufacturing companies who are navigating the new data-driven business world understand the legal issues involved. 

It highlights the different ways that industry 4.0 technologies are being used and says that machines in factories including presses, laser jet cutters, 3D printers, robots, material conveyors and condition sensors are increasingly being connected and sharing their data with enterprise systems. 

Software is being developed to interpret and utilise this data, and the Irwin Mitchell report explains that companies have never had so much accurate information about their operations and have the opportunity to be more productive, efficient, flexible, agile and profitable.

The report however calls on companies to understand how collecting and having access to more data can increase the risk of breaking the law. 

Pooling the experience of a group of in-house experts, specialist lawyers and business leaders from organisations including like Siemens and Thales, the report covers a wide range of areas including employment law, personal data protection including GDPR, cyber security and intellectual property. 

Dorrien Peters, a partner at Irwin Mitchell and Head of its national manufacturing group, said:

Expert Opinion

“According to US tech company, DOMO, over 2.5 quintillion bytes of data are created every single day.

“Machines in factories are increasingly being connected to and share their data with an enterprise system or systems. Software is being developed to interpret and utilise this data and as a result, companies in the sector have never had so much accurate information about their operations as they do today.

“However with volume comes risk. There are greater opportunities for example, for cyber criminals to compromise data and plant malicious code. The risk of valuable data leaking or being lost is also rising in proportion to the volume. Personal data about employees held by companies is both an asset and potential liability.

“The aim of this report is to highlight the opportunities and debunk the myths about the shift to ‘Industry 4.0’ by clarifying what it means from the level of data use and data exposure.”
Dorrien Peters - Partner

Another of the areas that the report looks at is the increasing use of technology to monitor staff and measure productivity. It warns that if this is done without their knowledge and used to give the employer an advantage, it is a breach of the GDPR. The report warns that employers can face huge fines, and must be rigorous in their transparency to avoid this.

Highlighting the increased risk facing manufacturers when it comes to sensitive data and dealing with cyber security threats, the report raises concerns for the sector about the rising trend of cyber-attacks on Industrial Control Systems. 

It examines this issue in depth and provides a three-step process so that manufacturers can improve their cyber security, including the need to appoint someone with the sole responsibility for cyber security. 

Graham Thomson, chief information security officer at Irwin Mitchell, contributed to the report. He said: “If anyone thinks that Industrial Control Systems are immune from cyber-attack, they have not been paying attention. Industry 4.0 technologies are an attractive target to many adversaries, and are just as vulnerable to the very same cyber-threats as other business systems. The impact of such an attack can be devastating, even life threatening.”

Irwin Mitchell’s experts also explain the legal issues relating to how data is being valued differently, highlighting how companies that create intellectual property can both capitalise on and be penalised by this change. 

The report also looks at the legal considerations for a manufacturer in terms of data sharing in supply chains.

Expert Opinion

“Digital transformation is reshaping how organisations do business, driving them to a data-driven world. There are however significant risks and numerous legal issues to be aware of. If the productivity gap is to be bridged it’s imperative that manufacturers get familiar with how data can be utilised to improve their profitability whilst acknowledging the laws and procedures that will apply as data increasingly dominates how we work.” Dorrien Peters - Partner

To download the report, click on the following link