Industry 4.0 involves a series of initiatives focusing on the digitisation of manufacturing, and in this sense it clearly represents the next iteration of the three preceding industrial revolutions. It brings significant enhancements to industrial processes based on smart and autonomous systems and fuelledby data and machine learning (ML). Indeed, the most significant aspect of 4IR is surely the enhanced level of communication between computers and, ultimately, the ability to make decisions without human involvement. Through a combination of cyber-physical systems (CPS), the Internet of Things (IoT) and the Internet of Systems (IoS), truly revolutionary change is now on the horizon.
Although 4IR and Industry 4.0 tend to be used interchangeably, strictly speaking the latter term refers to the concept of smart factories in which machines are augmented with wireless connectivity and sensors while connected to a system that can visualise the entire production line and make decisions on its own.
Impact on Society
Given that 4IR encompasses breakthroughs in fields as diverse as AI, robotics, autonomous vehicles, 3D printing, nanotechnology and quantum computing, it is not surprising that its impact is being felt across a range of sectors. Yet, such is its importance that it could also force a rethink about how countries develop. There’s potential for policy-makers to harness 4IR technologies in order to create a more inclusive, human-centred future and for it to change the way humans live, work and relate to each other.
Business Model Impact
Of course, 4IR with its highly disruptive technologies and integration of the digital and physical worlds presents significant challenges and opportunities for businesses too. And in order to be in a position to fully benefit from the opportunities it brings, businesses must prepare the ground first. This means being awake to the possibilities and actively planning for the wider emergence of 4IR. It’s clear that such planning is already on many businesses’ agendas.
According to a survey of 100 UK companies commissioned by Fitch Solutions in June 2019, two-thirds of businesses said 4IR already formed an important part of their strategic thinking. It’s also apparent that business appreciates both the scope and scale of the technologies encompassed; when asked what technologies they most associate with 4IR, the most common responses were AI, the IoT, Cloud, Big Data, 5G connectivity, automation, robotics and smart manufacturing.
Making the leap
Whilst only 1 in 4 businesses say they are actually implementing a 4IR plan, a third say they are undergoing strategic discussions as to how 4IR should be best implemented. This does leave 40% of businesses that are either unclear as to how 4IR can impact their day-to-day business or do not see 4IR as having an immediate impact on their business.
Most likely to have an implementation plan for 4IR or at least undergoing strategic discussions on how they should implement 4IR technologies are technology companies (as one would expect and hope), followed by retailers and consumer facing enterprises and manufacturing firms.
Those companies that are serious about implementing 4IR are most likely to be ready to embrace the use of automation and data, which they hope will make them more productive. In fact, sixty percent of UK businesses expect to implement 4IR in their working practices within 24 months.
There is a danger of thinking 4IR technologies will just be used by businesses in isolation to make themselves more efficient and productive, and to disrupt traditional business models. This is not the case. Technology is not just an isolated enabler for businesses to make more money and bigger profits. 4IR will impact society as a whole. This is why governments need to understand what effect technology can have, and implement a technology policy that results in a closer engagement with its citizens, and better public services.
The results from our survey of UK businesses recognizes the widespread benefits of 4IR with technology set to have an impact on everything from education to climate change. The impact on education could be significant and could transform how teachers focus their efforts (using AI to mark work), creating more useful assessments (through digital experiential learning and testing) or creating digital education estates (using 5G connectivity).
There is also a hope and recognition that 4IR technologies such as AI, autonomous vehicles, drones and IoT are relevant to making cities not just smarter but more sustainable too. The reshaping of transport, energy, waste and utilities sectors will accelerate as cities harness pioneering technologies and new business models to enhance economic productivity and reduce their environmental impact.
The important questions
Indeed, the technology advances in data, sensors, automation and AI are all helping to create another industrial revolution. It may start with more agile businesses making better use of technology, but it will impact everyone. It will be the duty of governments to see that it does, and fairly. Therefore, it is an important time for governments to ask themselves the following questions:
- Are we encouraging our citizens and businesses to embrace 4IR?
- Does our technology infrastructure fully support the potential use of 4IR technology innovation?
- Have we established a culture of innovation to highlight 4IR technologies?
- Does our technology policy support and encourage the implementation of 4IR technologies for all?
Now is the time to plan for participating in rather than observing the Fourth Industrial Revolution. The first step is to understand why 4IR is important. The second is to act on this and make the appropriate plans.
To learn more, and read the full report on Industry 4.0, click here.