The scope of industrial automation is shifting into a third wave of automation based on extreme information availability, cyber-physical systems and data analytics. This paper present critical factors and way forward for the development of the Swedish industrial automation sector, both users and suppliers. Based on literature and practice studies, and a survey including some 40 respondents, ten factors for realising the third wave of automation was identified with four key factors: Technology, Processes, Business models and Competence. Finally, initial steps on a way forward are proposed for the development of Swedish automation industry and research.