Are you prepared?
A new Industrial Revolution is here – Industry 4.0
As Industry 4.0 gains traction and speed, the boundaries between the physical and digital worlds are blurring. This is having a significant effect on how we work and live; daily life as we know it is being reimagined. Whilst we seem to be quite adept to the changes in our personal lives, is the same true for businesses?
The world has changed significantly over a short amount of time. In the late 18th century the first Industrial Revolution saw inventions such as the steam engine rapidly change how goods were manufactured and how we travelled, lived and worked. A century later came production lines, electricity to the home and further transformative changes to business and our lives. This is the story of innovation and progress; it never stops and the changes have only come on faster with the introduction of computers and digital technology. This quick trip through history brings us to where we are today. We are in the middle of a fourth Industrial Revolution that is further transforming the work we do and the way we live. The big shifts this time come about through the combination of physical and digital technologies. Advanced analytics, artificial intelligence, cognitive technologies, and the internet of things (IoT) are underpinning a set of changes that are far reaching and will have a significant impact on all industries, the workforce and society in general.
The changes we are experiencing can be seen simply by exploring how many peoples’ everyday lives are being transformed. Let’s start by thinking about all the connected devices in our homes – not your mobiles and tablets, but rather washing machines, fridges, TVs, and smart watches, to name a few. We can see how the technologies that underpinned a ‘computing revolution’ have jumped the physical divide into our day to day life. Autonomous driving vehicles are another example of the merging of physical and digital technology. In this case the potential is truly transformational, creating a better experience for the vehicle owner, greater safety for communities and better utilisation of strained physical infrastructure. Within organisations, the shift is also occurring; production lines are being optimised in real time through sensors, robotic process automation is removing repetitive tasks, virtual assistants are supporting customers both online and within contact centres – the list goes on.
While the change is all around us, it is important to ask whether organisations and leaders are sufficiently prepared to respond to this ‘revolution’. Recent research conducted by Deloitte surveyed 1,500 global organisations and found that while executives are optimistic about Industry 4.0, they lack confidence in their organisations’ level of preparation. Executives are conscious of the drastic changes that could come with the revolution, they are not confident they have the right talent to succeed in Industry 4.0, nor are they actively preparing for the revolution in their business strategies.
At the same time, Deloitte research surveying over 10,000 millennials worldwide, including from New Zealand, finds our current and future workforce is highly aware of how Industry 4.0 is shaping the workplace. Millennials feel this shift has the potential to free people from routine activities to focus on more creative work. However, many are uneasy about how prepared they are for its arrival, fearing that their jobs will be replaced or that they don’t have the skills necessary to survive the change. In their view, businesses are not adequately preparing them for these changes.
In New Zealand, we have a good track record of technology adoption as consumers, and we’ve seen ‘digitally savvy’ organisations follow suit. However many industries and sectors in New Zealand can be more sluggish, wary of emerging technology and early adoption. We know that executives understand they need to invest in technology to drive new business models, however there can be a lack of internal strategic alignment and bias towards short-term focus on what’s working well today.
Overall, executives around the world are in the early stages of readying their organisations to harness the full potential of Industry 4.0. New Zealand executives must take note, and similarly ready their organisations to leverage the disruption of Industry 4.0. To use the analogy of history; those successful in preparing for the steam engine will thrive. Those who stick to the horse and cart will be found out.
And they say history never repeats.