Are you ready for the Fourth Industrial Revolution?
Fergus Bailie reflects on what he learned at the CBI CEO Forum in London.
I recently attended the CBI CEO Forum in London, (kindly hosted by Willis Towers Watson) with an overview from CBI’s Director of Economics Rain Newton Smith and a round table discussion on economic growth and the EU referendum. One of the topics that arose was the Digital Economy, and specifically what was discussed at the recent World Economic Forum in Davos. The political and business leaders of the leading economies meet annually in Davos (along with some celebrity glamour with Leonardo Di Caprio and Will.i.am!) to discuss global economic matters – forefront of which were the refugee crisis, climate change and future interest rate rises. But if you dig deep enough, a very interesting viewpoint emerged. This was a look to the next Industrial Revolution, one that will fundamentally change the way individuals and people live, engage and work with each other.
The First Industrial Revolution was water and steam being used to mechanise production. Then we had electric power enabling mass production. Following that, the Digital Industrial Revolution and use of electronics and IT to automate production. Now we are building on this with the Fourth Industrial Revolution – Cyber Physical Systems.
Why is this a new revolution and not merely a continuation of electronics and IT?Two main reasons: Velocity – the rate of change and speed of breakthrough is unprecedented in historical terms. It is disrupting every industry and happening at an exponential rate, meaning that entire systems are changing – governance, management and production. There is no such thing as ‘business as usual’. Scope – the flow of mobile communications has empowered globalisation and it the power of content into the hands of the majority of people on the planet – for many of them a mobile phone is their first computer. Add to this new technologies that will by-pass traditional industries like 3D printing, robotics, the Internet of Things and artificial intelligence. This means tomorrow’s threat to our businesses has not yet been conceived, but will be soon. So, the Industrial Revolution 4.0 is about shifting from simple digitisation, to a complex combination of technologies. All businesses need to be ready for this change as it has great opportunities and threats. We can engage with anyone, anytime, anywhere in a way that has never been possible before. Technology has made it possible to order a cab, book a plane and watch a movie without leaving our couches. The next challenge is to combine data from disparate sources to make that engagement more compelling. Technology in the future will transform supply and demand. The supply side of organisations will change leading by harnessing data to gain in efficiency and productivity. Assets become more durable and resilient by using new technology, whilst data will transform how they are maintained. Logistics and global supply chains will become more effective, communications will change as getting a ‘share of voice’ will become harder as now everyone has a channel.
How will the Fourth Industrial Revolution affect businesses?
The four main effects on businesses are:
- Change in customer expectations
- Changes in product development and enhancement
- Changes to collaborative innovation
- Changes to organisational structures
“We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before…Whether consumers or businesses, customers are increasingly at the epicenter of the economy, which is all about improving how customers are served. Physical products and services, moreover, can now be enhanced with digital capabilities that increase their value.” – Klaus Schwab, Founder and Executive Chairman of World Economic Forum. Change is coming, and for established businesses this change can be hard. But the rewards are there to be had for those willing to embrace this connected world.
Are you ready for the Fourth Revolution? #fourthrevolutionready
Blog author: Fergus Bailie, CDS Chief Executive Fergus continues to lead his company, CDS, through its own digital transformation and together with his team of specialists advises clients on taking the next steps in their own journey to a digital transformation to meet the challengers of the Fourth Industrial Revolution.