Technology industry experts and observers have been talking about Fourth Industrial Revolution for a few years now. What does it mean? Is it some new buzzword coined by the industry to promote a new kind of technology? Does it have any impact on the businesses at large? These questions and many more are on the minds of every global business leader for some time now. Therefore, it is critical to cover the basics before diving into what it has to offer in terms of challenges and opportunities.
What is the Fourth Industrial Revolution (4IR)?
The popularly accepted definition of Fourth Industrial Revolution is that it is the fusion of cutting-edge technologies that are blurring the line between physical, digital, and biological worlds, and impacting all the disciplines, economies, and industries.
This is quite a simple way of putting into words something that is creating a powerful impact all over the world. The Fourth Industrial Revolution refers to the rise of the IoTs and their strong presence in every field. The IoT revolution is making it possible for everything from a watch to a pacemaker to be connected to the internet to create a universal ecosystem of devices that transcends the boundaries between the physical, digital and the biological worlds.
What Makes it Different From Past Industrial Revolutions?
4IR is a phenomenon that is making a massive impact all over the globe. In the case of the previous industrial revolutions, all the players – businesses, economies, governments, and people working on them – had considerable time to adapt to those revolutions. In the case of first two industrial revolutions brought about by the steam engine and the electricity, businesses had decades of time to evolve and remodel themselves to face the new challenges that they brought. Even in the case of the third revolution that digital technologies started, businesses had years to prepare. Unlike any of them, the Fourth Industrial Revolution is already here and is forcing businesses and even governments to either catch up fast or perish.
No economy or business is spared. Whether it is an agrarian economy in some remote corner of Africa, or a local business in California, everyone is affected by the sweeping changes that the 4IR is bringing to the world. While the Third Industrial Revolution was solely about digital innovation, the 4IR encompasses technological breakthroughs in digital, biological, and physical worlds that aim to integrate the three worlds seamlessly. It is this fusion of the three worlds that makes 4IR a formidable challenge for everyone. It will cause more fundamental changes to the world than any of the previous industrial revolutions.
How Is 4IR Impacting The World?
Artificial intelligence, robotics, IoT devices, analytics, biotech, and internet connectivity have together created an ecosystem that is making millions of managerial jobs obsolete, taking consumer expectations to new levels, and creating a need for businesses to be smarter, more attentive to their audience’s needs, and to reinvent their business models.
In this new ecosystem, the traditional business models will become redundant. This worldwide obsolescence of business practices and technology poses compelling challenges and simultaneously some fantastic opportunities for businesses.
The Era of Super-Efficiency Is Dawning
Cutting-edge businesses like Amazon, Uber, Facebook, Google, and Airbnb have been relentlessly pushing the bar for customer experience higher. Social media has given the consumers a taste of what it feels like to get what they want when they want. Even online interactions have undergone tremendous transformations over the years. Emails are a thing of the past. Instant messages, communication on team collaboration tools, and chat messages have all but replaced the emails. In such an ecosystem, can businesses really afford to ask their customers to be ‘on hold’? This is especially true when quick fixes as well as detailed answers to every possible question are available just a Google search away.
The millennials and the generation after them are born and brought up in an era that can be easily surmised as the height of the digital revolution. For them, instant solutions are the norm. Any business that makes them wait is as good as dead. This means that businesses don’t just need to be efficient and fast, but super-efficient and superfast in response to their audience’s needs.
Prescience – Paranormal or the New Normal?
The growing expectations of modern consumers may at times seem unrealistic, but are hardly so. The kind of super-efficient services that they demand are not only possible in almost every industry, but are being implemented right at this moment. This has been made possible by the explosion in IoTs and the data they create.
Every month, roughly 328 million new devices are being connected to the internet. At this rate, it is estimated that by 2020, there will be 50 billion IoT devices worldwide. Everything from a coffeemaker to a car will be connected to the internet. These devices – homes, farms, manufacturing plants, hospitals, and everywhere else – are already creating tremendous amounts of data. It is a formidable task to collect, store, manage, and analyze all of this data.
The size and speed at which this data is generated poses a real challenge for businesses. However, if businesses successfully leverage modern technology to take advantage of this data, then they stand to benefit tremendously. In fact, businesses everywhere are making use of analytics, big data, and other technologies to handle all of this data, which is paying off massive rewards for them.
This data gives businesses a near-prescience level of superpower when catering to their customer needs. For instance, a coffeemaker manufacturer gets complete 360-degree awareness about the state of their coffeemaker in their customer’s kitchen. They will know when it is in use, for how much time it was used, what drink was prepared using it, and so on. Manufacturers will also know if the coffeemaker malfunctions as soon as it does, and often, even before the user realizes it. Equipped with this knowledge, the manufacturer can take the necessary steps to address the issue without waiting for the consumer to complain with them. Whether the device needs to be repaired or replaced, it happens smoothly without any involvement from the user.
The most important aspect of such services is that they have transformed the very concept of ownership of the devices. Instead of “buy and own the product” type of deal, the users get a “buy and use the service” type of deal, wherein the user purchases the service that the coffeemaker provides them and not the device itself. Therefore, any malfunction or issue with the device is the responsibility of the manufacturer or the brand. Such a business model creates a fluid experience that is incredibly satisfying for the users, and also creates a unique competitive advantage for the businesses.
Furthermore, the data obtained from such devices can be used by businesses to sharpen their operations and business tactics to address their individual customers’ unique needs and cater to them with personalized solutions.
From Emerging Giant to Technology Leader
Unlike the previous industrial revolutions, the 4IR is a global and absolute phenomenon that covers every industry and economy. This means that the early adopters get to set the stage for this global revolution. Whether it is the businesses, governments, or the economies, those who embrace the 4IR early on will ride the first wave of this revolution. By the time the late entrants wake up to the world around them, the early adopters will have captured the lion’s share of the world’s economy, leaving the scraps to the laggards.
The early signs of this are visible in the approach of the world’s major powers like China and the US. The US government has supported the growth of homegrown analytics giants like Google, Amazon, Uber, and others in many ways, which includes staying out of their way. This has allowed them to develop cutting-edge 4IR technologies that have enabled them to compete against the local businesses in almost every major economy across the globe.
China’s approach is in stark contrast. China has taken a more proactive approach to developing the technological ecosystem in the country. By erecting strong barriers for entry of global businesses into China, by capturing the technological breakthroughs of foreign tech giants, and by actively supporting the local businesses, the Chinese government has transformed itself from a copycat into an innovation. Today, it produces more electric cars than the rest of the world combined. Its tech czars like Alibaba, Tencent, Baidu, Xiomi, and others are ready to take on the global giants. Indeed, in a recent development, it was confirmed that China is using AI and analytics to predict who will commit a crime. The message from China is clear – it is no more an emerging giant; it is a leader in technology.
At present, the intense focus on the development, exploitation, and weaponization of information technology has created a bipolar world, in which the superpowers are not those who have more nuclear weapons, but those who have the most sophisticated arsenal of technology.
The Fourth Industrial Revolution offers tremendous challenges and opportunities for every business, economy, and governments around the globe. At the outset, 4IR may seem like something that only the biggest fish in the pond can catch. In reality, the opposite is true. 4IR offers the developing economies a golden opportunity to skip the manufacturing revolution and directly aim for the IoT revolution.
This doesn’t mean that their governments will have an easy path to 4IR waiting for them. The same is true for small and medium businesses as well. However, if they adapt to 4IR and benefit from it, then there is tremendous potential for sustainable growth.