Deloitte finds executives optimistic about Industry 4.0, but lacking confidence in their organisations’ influence and preparedness
Global research explores C-suite views on readiness for the impact of the Fourth Industrial Revolution on society, strategy, the workforce and technology investments
Wellington, New Zealand – 24 January, 2018 – Senior business executives and government agency leaders from around the world lack confidence in their organisations’ readiness to influence and harness the opportunities offered by the Fourth Industrial Revolution (Industry 4.0), according to a research report by Deloitte Global entitled The Fourth Industrial Revolution is Here—Are You Ready?
Industry 4.0 is characterised by the marriage of physical and digital technologies, such as analytics, artificial intelligence, cognitive computing and the internet of things (IoT). Deloitte Global surveyed 1,600 C-level executives across 19 countries and conducted select in-person interviews to explore their readiness to leverage Industry 4.0 to benefit customers, employees, communities and other key stakeholders.
Deloitte New Zealand CEO Thomas Pippos says the rapidly advancing technologies that are driving Industry 4.0 are bringing about social and economic change.
“In an environment of unparalleled global connectivity it is a time of great opportunity, but also risk. We developed this research to better understand how executives are navigating this pervasive shift, and to uncover areas where they can more effectively influence how it impacts their organisations and society,” says Mr Pippos.
The survey and interview questions focused on four major topics: social impact, strategy, talent/workforce, and technology. The results indicate that while executives conceptually understand the changes Industry 4.0 will bring, they are less certain how they should act to benefit from those changes. And in each of the four areas of impact, the survey uncovered some degree of contradiction:
- Social Impact - While executives see a more stable future with less inequality, they are less confident about the roles they or their organisations can play in influencing society in an Industry 4.0 era. An overwhelming (87 percent) proportion believe the Fourth Industrial Revolution will lead to more social and economic equality and stability, and two out of three say business will have much more influence than governments and other entities in shaping this future. However, less than a quarter believe their own organisations can influence key societal factors such as education, sustainability and social mobility.
- Strategy - Executives acknowledge they may not be ready to harness the changes associated with Industry 4.0, but these reservations have not compelled them to alter their strategies. Just 14 percent are highly confident that their organisations are ready to fully harness the changes associated with Industry 4.0. But many executives are sticking with a focus on traditional domains (i.e., developing products and increasing productivity) instead of shifting their focus toward developing talent and driving competitive disruption that could spur innovation and create value.
- Talent/Workforce - Executives are not confident they have the right talent to be successful in Industry 4.0. However, they feel they are doing all they can to build the right workforce, despite talent ranking low on their list of priorities. Only a quarter are highly confident they have the right workforce composition and the skill sets needed for the future. And interestingly, 86 percent say they are doing everything they can to create a workforce for Industry 4.0. Yet, responses indicate that HR topics remain a low priority, other than aiming to increase worker efficiency.
For companies that have placed Industry 4.0 talent implications high on their priority list, they are exploring the potential for new roles that that allow people to play to their strengths while leveraging technology for greater innovation, alternative work environments, and new approaches to learning and development.
- Technology - Executives understand they need to invest in technology to drive new business models. However, they have a hard time making the business case to fully address Industry 4.0 opportunities because of a lack of internal strategic alignment and short-term focus.
The research revealed that, overall, executives around the world are in the early stages of readying their organisations to harness the full potential of Industry 4.0. They will need to seize opportunities to strengthen key connections that will benefit their clients, their people, their organisations, their communities and society more broadly.
“We believe those who take a broad view will be the ones to succeed in this new era,” concludes Mr Pippos.
“They will see connections between business and social needs; between financial outcomes and innovative strategies; between workforce productivity and people’s sense of stability and well-being; and between integrating existing technologies and creating completely new solutions.”
For more information and to view the full research results, read the report here.
About the survey
Forbes Insights, in conjunction with Deloitte Global, conducted a global survey of 1,603 CXOs to better understand their perspectives on Industry 4.0. All respondents were from organisations with annual revenue greater than US$1 billion, with average revenue of US$7.4 billion. The CXOs lead organisations in Australia, Brazil, Canada, China, Denmark, Finland, France, Germany, Iceland, India, Japan, Mexico, Netherlands, Norway, South Africa, Spain, Sweden, United Kingdom and the United States. Respondents represent 10 industries, with no industry constituting more than 12 percent of the total sample. The survey was conducted in August 2017.