The Industry 4.0 environment combines innovative information and communication technologies with Internet and physical systems, enabling advanced wireless communications and the Internet of Things services. Such digital and wireless transformation has the potential to drive economic growth in manufacturing using 5G technology. A key component of this potential lies in the collaboration between stakeholders in the manufacturing and mobile ecosystems industries who have acted in parallel in the past. In the future, the 5G technology will have a major impact on industry and mobility and will enable manufacturers to complete end-to-end automation with the virtual deployment of new product lines or the entire factory. Directly contributing to the social and economic development, 5G will be the technology that will enable growth and transformation in the Industry 4.0. This paper aims to show the impact that 5G can have on improving manufacturing processes in a smart factory environment and how it can respond to its increasing requirements. It will also outline the technical challenges that the manufacturing industry may meet when implementing this technology. Accordingly, an overview of the state of implementation of the 5G technology and a future development plan of Industry 4.0 in Europe will be given.