Industry 4.0 readiness
Executives around the world are embracing a larger responsibility beyond profit
The world’s business leaders are embracing a larger responsibility beyond profit, as the Fourth Industrial Revolution rewrites the role of business in society. That is the conclusion of Deloitte’s third annual Readiness Report, 'The Fourth Industrial Revolution: At the intersection of readiness and responsibility'.
Our latest Deloitte Global's third annual survey polled more than 2,000 C-suite executives across 19 countries, coupled with select interviews. Nearly six in 10 executives say increasing their companies’ positive impact on society is among their top-five desired outcomes for Industry 4.0. In comparison, two years ago, just 35 percent of CXOs believed that the leading organizations of the future needed to spend more time preparing for how new solutions will impact society.
Especially the issues of climate change and environmental sustainability have risen in importance for executives. Almost 90 percent agree that the impacts of climate change will negatively affect their organizations and 59 percent claim to have internal sustainability initiatives in place - from reducing travel to eliminating plastics, and more.
As companies face these new realities, leaders are re-evaluating their approaches to four key areas critical to Industry 4.0: strategy, societal impact, talent, and technology.
1) Strategy: When strategy leads, success follows
Executives’ top desired outcome for their I4.0 strategies is “driving greater revenue,” outpacing the second-highest desired outcome two-to-one. “Increasing company’s positive impact on society” is also a top-five desired outcome.
Companies with comprehensive strategies to take advantage of Industry 4.0 technologies are generating success across multiple areas of the business, from product innovation to workforce readiness to societal impact.
Technology is primarily a tool with no value if it doesn’t align with our strategy or improve our operations as a whole. The opportunities technology provides are overwhelming, and the pace in which they evolve makes it difficult to decide on timing and direction. The only way to see long-term and strategic benefits from tech is to anchor it in our strategy, which we do at all levels—from the operations of our business to inventing service solutions together with and for our customers.
— Jeff Gravenhorst, CEO, ISS
2) Societal impact: Recognition of business’ social responsibility
When it comes to societal issues, execs are most focused on resource scarcity as well as climate change and environmental sustainability.
When asked why their companies choose to focus on societal issues, 42 percent of CXOs cited the opportunity to generate revenue, which suggests that profit and revenue continue to drive organizations’ strategies and motivations. However, it’s important to point out that a close second was motivation from external stakeholders (customers, investors, etc.), and third was employee pressure.
Issues that seem to have skyrocketed in importance for executives are climate change and environmental sustainability. Two years ago, only 10 percent of CXOs said their companies could influence environmental sustainability to a significant degree. This year, 48 percent see tackling climate change as a top responsibility; 38 percent put encouraging sustainability at the same priority level.
it is no longer just about earnings—it’s also about what kind of planet we are leaving behind. Business and climate go hand in hand. — Jeff Gravenhorst, CEO, ISS
3) Talent: A new investment priority for business
One of the aspects of Industry 4.0 most speculated about has been the potential effect of cognitive technologies on the human workforce. Three-quarters of executives say training and developing their workforces is one of the Industry 4.0 priorities in which they’ll be investing the most.
80 percent of the global CXOs said they either have created or are creating a corporate culture of lifelong learning, with another 17 percent planning to do so - a far cry from the hands-off approach of years past.
We’re looking for people who are motivated, naturally curious, and hungry to constantly learn. In this ever-changing environment, it’s important to bring in people who have a constant mindset around education in order to stay ahead.
— Sarah Kennedy, VP of global marketing, Adobe Digital Experience
4) Technology: Leaders continue to retreat from disruption
Only 26 percent of Danish execs consider ‘protecting their organisations from disruption’ a top Industry 4.0-priority.
The degree to which CXOs believe technology will have a profound impact on their organizations varies by region. EMEA is by far the most bullish of all the regions, while APAC is the most skeptical of the “big four” technologies’ impact. The Americas net out around the average of all global participants.
There is a strong correlation and dependencies between several Industry 4.0 technologies. IoT sensors will generate a ton of data that will be relevant for machine learning-based automation. Most of these technologies will be delivered and consumed in the cloud even as we see the emergence of edge computing. Next-gen robotics will see the convergence of IoT, machine learning, and cloud computing as robots start getting better all the time through cloudbased machine learning from data from IoT sensors in the robot.
— Deepak Krishnamurthy, chief strategy and transformation officer