What is the Fourth Industrial Revolution, also known as 4IR or Industry 4.0, and how will it affect business as we know it?
In order to better understand what 4IR is, let’s first take a high-level look at the first three industrial revolutions and how we’ve arrived to our current state:
- First Industrial Revolution: Began around 1760 with the advent of steam, and spurred an age of mechanical production.
- Second Industrial Revolution: Began in the early part of the 20th century with the advent of the assembly line and mass production, gasoline-powered engines, radio, telephones, and electric lighting.
- Third Industrial Revolution: Known as the Digital Revolution, the 3IR began in the 1950s with mainframe computing, personal computing, and the Internet.
What is the Fourth Industrial Revolution?
The Fourth Industrial Revolution builds on the foundations of the Third Industrial Revolution but goes far beyond it.
The World Economic Forum describes the 4IR as the advent of “cyber-physical systems” which rely on the technologies and infrastructure of the 3IR. The 4IR, however, “represents entirely new ways in which technology becomes embedded within societies and even our human bodies.”
The 4IR is characterized by:
- Machine intelligence and learning
- Big Data
- Genome editing
- Real-time information processing
- Cloud computing
- Artificial intelligence (AI)
- The Internet of Things (IoT)
- Advanced, intelligent robotics
- Additive manufacturing
- Cryptographic methodology like blockchain
This is driving us into a new era that blurs the lines between the physical and digital worlds, and it’s evolving at an exponential rather than a linear pace.
The World Economic Forum expects the latest revolution to generate US$3.7 trillion in value across all industries globally by 2025, with the rise of new products, services, and technologies helping to generate and realize this value.
What It Means for Your Business
The 4IR isn’t just about improving processes and productivity, it’s about delivering better value to customers and an overall better customer experience. Ultimately, it is the customer that will drive change in this market, as they now have greater autonomy and influence in the B2C and B2B space.
Our consumer lives inform our business lives, and in an era of great expectations, manufacturing companies that have approached their market on their own terms should take note. Those that adopt elements of the 4IR will be better able to future-proof their businesses for decades to come.
The Fourth Industrial Revolution is the biggest business disruption we’ve seen in the last half a century, arguably ever.
The sheer speed and pace of change is an upheaval that has parallels with the industrial revolutions experienced in the past. Rapid digitalization and innovative technologies and techniques are changing the way we manufacture products, processes, and supply chains.
But digital transformation and the 4IR shouldn’t stop when the finished product is on a palette and leaving your warehouse. It’s important to remember that re-engineering your business for the Fourth Industrial Age should start with the customer.