The Fourth Industrial Revolution
Establishing A Steady Foothold in the Fourth Industrial Revolution
At the World Economic Forum’s Annual Meeting in 2016, various global leaders discussed how increased automation has sparked massive changes in the way humans do business and cooperate.
From January 20 to 23, 2016, the World Economic Forum (WEF) held its Annual Meeting in Davos-Klosters, Switzerland, as it has done for decades. The theme for this year’s meeting of the world’s top business, political and academic leaders was “Mastering the Fourth Industrial Revolution,” a need that WEF finds apparent at present. Specifically, the meeting aimed to discuss the following:
… mastering the speed, scale and force at which the Fourth Industrial Revolution is reshaping the economic, social, ecological and cultural contexts in which we live; addressing a rapidly changing security and humanitarian landscape in which emerging technologies also play a key role; and solving problems of the global commons, from climate change to the future of the internet, through new models of public-private cooperation and the application of breakthrough science and technology solutions. (WEF Annual Meeting 2016 Report)
Previous Industrial Revolutions that have changed the way the world has done business and innovation were all sparked by new technologies that provided increased efficiency and opportunities. The First Industrial Revolution happened when machines were used to do production, such as with the spindle or with the advent of steam engines starting in the late 18th century. This was followed by the Second Industrial Revolution, where electricity added significant power to production, allowing for mass production and division of labor in the late 19th century. The Third Industrial Revolution is more familiar to today’s generation, and it began when electronics, IT and automated production became possible with the advent of computers in 1969.
We are on the cusp of a Fourth Industrial Revolution, which is marked by increased automation brought about by the ubiquitous power of the Internet and sensors, artificial intelligence (AI), and machine learning. The Fourth Industrial Revolution is “giving the opportunities to truly merge and adapt our bodies with technology,” wrote Nicholas Davis, Head of Society and Innovation and Member of the Executive Committee of WEF. It involves the convergence of physical, digital and human domains, where we are becoming so much more aware of our physical world because of sensors and we use increasingly interactive digital technologies to control it.
Winston Damarillo, Chief Strategy Officer of PLDT Group and Chairman of Amihan Global Strategies, attended the WEF Annual Meeting at Davos-Klosters in January 2016 and recently held several download sessions at the Amihan offices with executives to share valuable insights from the event. He discussed technology trends signaling the Fourth Industrial Revolution, how this phenomenon will affect enterprises, and how industries can adapt to such an increasingly connected and fast-paced business environment.
The Fourth Industrial Revolution sees technology change at faster speeds
It took the spindle almost 120 years to spread outside of Europe, but it only took the Internet a decade to spread globally. The Fourth Industrial Revolution is characterized by technology breakthroughs at increasing speeds that have produced trends that changed the way people conducted business as well as daily life.
The iPhone was launched in 2007, and just eight years later in 2015, there were 2 billion smart phones being used globally. Volumes of data have been produced by these users alone, giving insights on their consumer behavior that companies have since used to improve their mobile strategies for greater profits.
Autonomous vehicles are another breakthrough brought about by the Fourth Industrial Revolution. Drones are used for many applications that require remote human control, from military to commercial (such as for wedding or adventure videos). Google also launched its first autonomous car in 2010, using many intelligent sensors to keep it from bumping into obstacles and allowing it to be controlled remotely.
The advent of 3D printing has multiplied possibilities in production, allowing intricate designs to be realized physically in mere minutes. The related field of bio printing allows this technology to be used in making prosthetics and devices that can save lives or extend the human lifespan.
The Fourth Industrial Revolution is changing businesses
Focus on automation and the increasing convergence of digital, physical and human domains in the Fourth Industrial Revolution is also changing the way businesses operate and evolve. In general, traditional life cycles for business will happen at much faster rates, with companies lasting about 18 years compared to how they used to last for 60. New entrants can dominate markets much faster, too, such as in the examples of Facebook, which took 6 years to reach $1 billion per year, and Google, which took just 5 years.
Dedicated enterprises will split up into platforms for smaller and more focused businesses, such as in the way Google Alphabet is made up of smaller companies, each with their own innovation tracks. Jobs will also become extremely flexible and transient, since every worker has essentially become a contractor with the on-demand economy.
Customer needs are also changing, with the Internet empowering consumers through their mobile devices. They will expect transparency and real human interaction to still be at the heart of process innovation, so real-time adjustment and data visualizations will be necessary to keep them informed in ways they can immediately understand. Products can also be brought to market more quickly with the possibility of improving them remotely. For example, Tesla cars use over-the-air software updates to enhance a product after purchase, maintaining their value over time unlike conventional vehicles.
Companies must adapt or be left behind
Changes at breakneck speed have made it necessary for companies to adapt to innovation or be left behind. Industries are already being disrupted by new modes of digital interaction and new technological capabilities.
In retail, customer loyalty is proving to be where the advantage lies, with mobile-empowered consumers patronizing businesses that have better customer service and intuitive personalized messaging. In healthcare, digitized patient records and wearables lessen the need for hospital visits or doctors. Innovations such as customer engagement and data visualization technologies arm companies in such industries with tools to make their stakeholders true partners in the future, when service becomes a more collaborative relationship in the interests of efficiency and effectivity.
“The opportunity to raise the quality of life is the biggest business opportunity going,” said Anand Mahindra, Chairman and Managing Director of Mahindra & Mahindra, at the 2016 WEF Annual Meeting. With more people being empowered by the Fourth Industrial Revolution, the focus of companies should be shifting to improvement on a higher level, for the betterment of all, because that’s where opportunity resides at this point. This is why private, public and academic sectors are now cooperating on initiatives such as Big Data, tech platforms for the on-demand economy, and smart materials — they hope to harness these technologies to find solutions to global problems and hidden opportunities for growth.
Imagine a world where: online access is a basic right; you control devices with your brain; you produce any product just by printing; your car fills itself up with gas; and the mobile phone makes banks obsolete. As political and business leaders work with each other and the academe to find sustainable ways to adapt to the Fourth Industrial Revolution, human beings will soon live in such an interconnected world.