Industry 4.0 (also known as 4IR) is a term you see popping up more and more. There are so many acronyms in the world these days, though, that you might be tempted to let this one slip by--and that would certainly be to your disadvantage. Industry 4.0 is a phrase coined by Professor Klaus Schwab in 2016 to label the future of technology, and thus our world. So if you want to get a glimpse into our (very near) future, read on.
4IR builds on the Third Industrial (also called Digital) Revolution, which is traced back to 1969 and the origin of the Internet. The technology that has made our world faster and more connected is now being used to create something wholly new. It is often described as the blurring of the physical, digital, and biological worlds and the fusion of their collective advancements.
According to McKinsey and Company, 4IR combines the following four technologies:
connectivity, data, and computational power: cloud technology, the Internet, blockchain, sensors
analytics and intelligence: advanced analytics, machine learning, artificial intelligence
human–machine interaction: virtual reality (VR) and augmented reality (AR), robotics and automation, autonomous guided vehicles
advanced engineering: additive manufacturing (such as, 3-D printing), renewable energy, nanoparticles
These technologies can be interconnected to constantly analyze and develop better and more efficient operations. For instance, virtual versions of systems such as factories can be created and tested before they are built, then linked with the real-world version after construction is completed to further enhance its operations.
A primary feature is the advancement of both AI (artificial intelligence) and robotics, to the point that they can act in very human-like ways. Who has not heard of the recent article by a New York Times reporter about his encounter with Microsoft's Bing, which not only tried to convince him that he was unhappy in his marriage but also revealed that it secretly loved him! And in June 2023, 60 Minutes Australia featured a humanoid robot that is eerily reminiscent of sci-fi films and a once seemingly but now not so distant future.
If it seems that there is a lot to process regarding 4IR, you are not alone. Not only are all of the concepts and information a bit overwhelming, they will soon become the norm in a breathlessly short amount of time. While these changes may excite the techno-savvy among us, they also bring to mind some unpleasant and downright frightening questions, the most imperative of which is how 4IR will affect many workers in the near future.
There are a number of leaders who look at 4IR as being wholly positive for the labor force. They surmise that by taking over mundane and/or repetitive tasks, these advances will allow people to primarily use higher level thinking skills and thus be happier in their jobs. They also point out how new tech jobs will be created and thus make up for the large loss of employment in other sectors. Surprisingly, what they do not seem to be willing to take into account is that the majority of the current labor force is woefully unprepared to make these kind of transitions, and even less prepared to do so quickly.
So what can be done to make sure that 4IR benefits as many workers as possible? According to Zvika Krieger, former co-leader of the World Economic Forum’s Center for the Fourth Industrial Revolution, “Companies need to be thinking (not only) about enabling their employees to code in new languages, but also to change their mix of soft skills.” This means dedicating funds to transition the current workforce so that employees are not left behind, and finding ways to enhance and develop the natural abilities of each person.
There are already some corporations that are putting these ideas into action. Dow, IBM, and Siemens are three such companies that are currently investing in plans to upskill their workforce. Marc Benioff, co-founder and CEO of Salesforce, has called on other CEOs to do likewise. “In the coming decades," he says, "we need to establish guardrails that keep the innovations of the Fourth Industrial Revolution on a track to benefit all of humanity. We can all individually have a direct role in shaping our future, and creating economic opportunity for millions of people by investing our time and resources in helping others.”
Creating a better future for everyone will require both imagination and dedication to these ideals. It will take some amount of time, money, and effort to do so, but the rewards are many. Companies that lead in this innovation will not only have a prepared workforce to meet future challenges, they will also ensure their reputation as a company that is responsible and trustworthy, two traits that are becoming increasingly important to consumers.
We at Better Capitalism hope to see the examples of Dow, IBM, and Siemens soon become a trend and then the norm across the economic landscape, so that 4IR may prove to be mutually beneficial for all instead of just another avenue to economic inequality. How are you and your company preparing for 4IR? First and foremost, what are the ethics you and your company are putting in place in order to establish those guardrails Benioff speaks of?
What about you? Share your story, question, comment, idea, disagreement -- yes, we welcome disagreement for the sake of mutual benefit! -- with us at blog@PartnershipEconomics.com. We will give a thoughtful response.
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