Industry 4.0 seeks to connect machines to machines, and machines to people, using standardized digital communication protocols. This concept is called CPS (cyber-physical systems). The goal of CPS is to find the most efficient way to improve shop floor productivity without the use of skilled engineers, as well as implementing a system capable of autonomous control. The German government has tried to establish this new digital ecosystem to enhance interoperability, not only between the shop-floor and management within companies, but also across the entire country. This concept could potentially influence not only Japanese industrial policy, but also the entire manufacturing industry. Research suggests, however, that Industry 4.0 has stalled in Germany. It has been 8 years since the announcement of the concept, but there has been very little in the way of research or practical results. The purpose of this research is to consider the compatibility between existing manufacturing technology and the key concepts of Industry 4.0, as well as to consider concerns, such as how this concept would secure confidential data and other information using standardized digital communication protocols, and how competitive advantage could be achieved and maintained in a borderless environment.