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The Fourth Industrial Revolution – Industry 4.0 – An Overview

The Fourth Industrial Revolution[1] represents a fundamental change in the way we live, work and relate to one another. It is a new chapter in human development, enabled by extraordinary technology advances commensurate with those of the first, second and third industrial revolutions. These advances are merging the physical, digital and biological worlds in ways that create both huge promise and potential peril. The speed, breadth and depth of this revolution is forcing us to rethink how countries develop, how organisations create value and even what it means to be human. The Fourth Industrial Revolution is about more than just technology-driven change; it is an opportunity to help everyone, including leaders, policy-makers and people from all income groups and nations, to harness converging technologies in order to create an inclusive, human-centered future. The real opportunity is to look beyond technology and find ways to give the greatest number of people the ability to positively impact their families, organisations and communities.

The first three industrial revolutions[2]

Zvika Krieger, the head of technology policy and partnerships at WEF, states that there is a common theme among each of the industrial revolutions: the invention of a specific technology that changed society fundamentally.

The First Industrial Revolution started in Britain around 1760. It was powered by a major invention: the steam engine. The steam engine enabled new manufacturing processes, leading to the creation of factories.

The Second Industrial Revolution came roughly one century later and was characterized by mass production in new industries like steel, oil and electricity. The light bulb, telephone and internal combustion engine were some of the key inventions of this era.

The inventions of the semiconductor, personal computer and the internet marked the Third Industrial Revolution starting in the 1960s. This is also referred to as the “Digital Revolution.”

The Fourth Industrial Revolution[3] refers to how technologies like artificial intelligence, autonomous vehicles and the internet of things are merging with humans’ physical lives.

Krieger says that the Fourth Industrial Revolution is different from the third for two reasons: the gap between the digital, physical and biological worlds is shrinking, and technology is changing faster than ever.

According to Professor Klaus Schwab, Founder & Executive Chairman of the World Economic Forum, it is “blurring the lines between physical, digital and biological spheres.”

It’s important to appreciate that the Fourth Industrial Revolution involves a systemic change across many sectors and aspects of human life: the crosscutting impacts of emerging technologies are even more important than the exciting capabilities they represent…. The result of all this is societal transformation at a global scale… Furthermore, the sense that new technologies are being developed and implemented at an increasingly rapid pace has an impact on human identities, communities, and political structures.

This revolution is about much more than technology—it is an opportunity to unite global communities, to build sustainable economies, to adapt and modernize governance models, to reduce material and social inequalities, and to commit to values-based leadership of emerging technologies.

The Fourth Industrial revolution is driven by four disruptions: the astonishing rise in data volumes, computational power, and connectivity, especially new low-power wide-area networks; the emergence of analytics and business-intelligence capabilities; new forms of human-machine interaction such as touch interfaces and augmented-reality systems; and improvements in transferring digital instructions to the physical world.[4]

The Fourth Industrial Revolution is therefore not a prediction of the future but a call to action. It is a vision for developing, diffusing, and governing technologies in ways that foster a more empowering, collaborative, and sustainable foundation for social and economic development, built around shared values of the common good, human dignity, and intergenerational stewardship. Realizing this vision will be the core challenge and great responsibility of the next 50 years. [5]

Challenges and opportunities [6]

There are three reasons why today’s transformations represent not merely a prolongation of the Third Industrial Revolution but rather the arrival of a Fourth and distinct one: velocity, scope, and systems impact. The speed of current breakthroughs has no historical precedent. When compared with previous industrial revolutions, the Fourth is evolving at an exponential rather than a linear pace. Moreover, it is disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production,
management, and governance.

In the future, technological innovation will also lead to a supply-side miracle, with long term gains in efficiency and productivity. Transportation and communication costs will drop, logistics and global supply chains will become more effective, and the cost of trade will diminish, all of which will open new markets and drive economic growth. At the same time, as the economists Erik Brynjolfsson and Andrew McAfee have pointed out, the revolution could yield greater inequality, particularly in its potential to disrupt labor markets.

There are four main effects that the Fourth Industrial Revolution has on business—on customer expectations, on product enhancement, on collaborative innovation, and on organizational forms. The governments will increasingly face pressure to change their current approach to public engagement and policymaking, as their central role of conducting policy diminishes owing to new sources of competition and the redistribution and decentralization of power that new
technologies make possible. Ultimately, the ability of government systems and public authorities to adapt will determine their survival.

The Fourth Industrial Revolution, finally, will change not only what we do but also who we are. It will affect our identity and all the issues associated with it: our sense of privacy, our notions of ownership, our consumption patterns, the time we devote to work and leisure, and how we develop our careers, cultivate our skills, meet people, and nurture relationships. It is already changing our health and leading to a “quantified” self, and sooner than we think it may lead to human augmentation. The list is endless because it is bound only by our imagination.

For example, in ‘Elon Musk’s vision for the future’, one of most prominent icons of Fourth Industrial Revolution, Elon Musk shares his predictions for artificial intelligence, renewable energy and space exploration.

As an another example, a special panel of highly scientific minds discusses what the future holds for tech innovation, education and entrepreneurship. Panelists include Google’s “captain of moonshots,” Astro Teller, Stanford bioengineer Christina Smolke, an associate professor at the university’s medical school, and DFJ General Partner Steve Jurvetson. Persis Drell, dean of the Stanford School of Engineering, moderates the discussion, with introductions by Stanford Professor Kathleen Eisenhardt.

4 myths about manufacturing in the Fourth Industrial Revolution[7]

#1 4IR technologies are too expensive

The beauty of the 4IR is that so much can be done without breaking the bank…While this does require a significant amount of upfront work to implement, it typically translates into optimized processes, shortened cycle times, increased quality, reduced energy losses, shorter downtimes due to maintenance, and improved overall equipment effectiveness.

# 2 4IR technologies will cause widespread unemployment

The investor and on the board of directors with SpaceX and Tesla, Steve Jurvetson’s visions for the future is that there will be no need for humans to have jobs for example. Even as slaves.[8]

There is no doubt that repetitive tasks will decline… In manufacturing, while we expect a decline of tasks for assembly and factory workers, material handlers, quality inspectors and maintenance technicians; this decline will be counterbalanced by an increase of roles in the fields of data analytics, artificial intelligence, software and application development and technologies. The challenge to be overcome, then, is how to re-skill the existing workforce.

# 3 Businesses must forgo profits to achieve sustainability

It is the mindset – that one must choose between what is right for the bottom line and what is sustainable – that must shift…To do this, we need to first change the way we think and define sustainability. Today, it is far more than planting trees or putting a few solar panels on the roof – although these are still good things to do. Instead, we need to think about sustainability in terms of sustained success, and in the broader context of contributing positively to the workforce, society at large, and the environment.

#4 4IR is only for large multinational companies in developed markets

This is not always the case, according to a recent World Economic Forum white paper “Fourth Industrial Revolution: Beacons of Technology and Innovation in Manufacturing”, which details 16 of the world’s most advanced 4IR factories.

[9]

There is no field where some or other form of digital technology has entered. Which technologies would deliver the biggest return on investment for a company, given its unique circumstances? To sort through the choices, manufacturing leaders can use a “digital compass” created by McKinsey & Company. The compass consists of eight basic value drivers and 26 practical Industry 4.0 levers. Cross-functional discussions that will help companies find the levers that are best suited to solve their problems.[10]

The digital power of Fourth Industrial Revolution is as much a threat as it is an opportunity, depending on whether the business enterprise can transform and extend their business models after, or before, the change becomes THE reality.

How ready are we?

[1] 4th Industrial Revolution

[2]  Everything you need to know about the Fourth Industrial Revolution

[3] What is fourth industrial revolution?

[4] Manufacturing’s next act

[5] Fourth Industrial revolutionKlaus Schwab

[6] The Fourth Industrial Revolution What It Means, How To Respond

[7] 4 myths about manufacturing in the Fourth Industrial Revolution

[8]  In the future there will be no jobs

[9]  The Plastics Blog – Don Loepp @ August 30, 2018

[10] Digital in industry: From buzzword to value creation