Innovation has a come long way from the first industrial revolution to the fourth industrial revolution which the world is witnessing today. It has brought unbounded opportunities to the business leaders and changed the way people live, work and interact with the world. Let’s fly back and overview our journey of the Industrial Revolution and how did we enter the Fourth Industrial Revolution.
The First Industrial Revolution took place between 1750 – 1840 in Great Britain. Water and steam were used to mechanize the production process during this period. The term “Industrial Revolution” was given by an English economist named Arnold Toynbee. During this time steam engine, iron making techniques, new textile machines, cement, printing press, banking industry, and railways were invented. All these inventions replaced older and revolting methods and lead to a larger industrial workforce.
The Second Industrial Revolution was in between 1850 – 1969. This was the greater Industrial Revolution in the Revolution history also known as the “Technological Revolution” powered by electric power to create mass production. It originated in the US and moved to European countries like Germany, France, UK, then to Japan. It highlighted the time period where iron, engines, steel, rail, electricity, petroleum, telecommunications were developed towards modern business administration. Innovation such as railway networks, telegraph, telephone, typewriter, electric generators, and so many mass production boosted the economic growth.
The Third Industrial Revolution was driven by Information Technology in the year between 1980 – 2000. In the new era of the industrial transformation business leaders used electronics and information technology to automate production. The first computer model, smartphones, the Internet, 3D printing, the laser was invented in this period. Jeremy Rifkin, an American economic and social theorist pointed the third industrial revolution is all about the Internet of Energy and how energy, mobility, and digitization will change the future. How technology growth will increase mass outputs in less time and reduce costs.
Soon after the Third Industrial Revolution ended, the year 2000 opened a portal to the Fourth Industrial Revolution also known as Industry 4.0 to digitize production. Technologies that are mixing physical, digital and biological component are causing a huge impact in all the industries and reshaping business models for a better future. The revolution includes scope, velocity, scale and systems impact that takes business leaders into a new age. As internet being more powerful in the fourth revolution linear solution is no more an option. Where exponential thinking is evolving, it is transforming every industry without any exceptions and the transition is still in process.
German Government refers Industry 4.0 as “a technical evolution from embedded systems to cyber-physical systems where Machines no longer simply ‘process’ the product, instead, the future product will communicate with the machinery to tell it exactly what to do. This revolution connects all embedded systems and smart production processes which will radically transform industry and production value chains and business models.”
It is essential for every organization to not only survive in the market but also to stay ahead of the curve. In this current revolution era company’s size doesn’t matter, what matters is the adoption of new technologies and how business leaders are blending it with digital innovation to thrive. The Industry 4.0 that includes all the smart production, Internet of things, digital ecosystems, cyber-physical systems, AI and so much more have engulfed all the industries. Experts say, “we stand on the cusp of a fourth Industrial Revolution” where innovation in technologies will emerge into a new path for growth and development in the future.
“At the end of this transformation process, successful industrial companies will become true digital enterprises, with physical products at the core, augmented by digital interfaces and data-based, innovative services. These digital enterprises will work together with customers and suppliers in industrial digital ecosystems. These developments will fundamentally change individual companies, as well as transform market dynamics across a whole range of industries. And that’s true in countries all around the world – in both the developed as well as the emerging markets”.
Information technology (IT) skills are the essential key to embracing the Fourth Industrial Revolution or Industry 4.0. It leads to automation, Big Data Analytics and comprehends how cyberspace is opening a new dimension for the organization. Innovation strategy drives digital innovation and helps companies identify their potentials and sharpness to embrace Industry 4.0.
As per the World Economic Forum (WEF) Global Information Technology 2016 Report, countries like Finland, Switzerland, Sweden, Israel, Singapore, the Netherlands and the United States are the lead generator of economic gains from information and communications technologies (ICT). On average, this group of high-achieving economies at the pinnacle of the report’s Networked Readiness Index (NRI) economic impact pillar scores 33% higher than other advanced economies and 100% more than emerging and developing economies. The seven are all known for being early and enthusiastic adopters of ICT and their emergence is significant as it demonstrates that the adoption of ICTs – coupled with a supportive enabling environment characterized by sound regulation, quality infrastructure, and ready skills supply among other factors – can pave the way to wider benefits.
Driving Income: The Fourth Industrial Revolution has lifted industry’s income levels worldwide. Along with the income, it has also brought a tremendous impact on the work style and the individual quality of living.
Increased Efficiency: Industry 4.0 unlatches opportunities for technologies to increase the efficiency, optimized workflow, and smart manufacturing. World Economic Forum research says, in the future, technological innovation will also lead to a supply-side miracle, with long-term gains in efficiency and productivity.
Driving Economy: Transportation and communication costs will drop, logistics and global supply chains will become more effective, and the cost of trade will diminish, all of which will open new markets and drive economic growth.
Automation: Industry 4.0 where digitization becomes the top priority it also becomes the biggest challenge for a company due to automation, which requires flawless connectivity and data sharing, the company’s security and privacy becomes the major concern.
Precision and Stability: To run a successful cyber-physical communication a high amount of accuracy and stability needs to be retained plus the transformation requires huge investments.
Job Segregation: Inequality being the Fourth Industrial Revolution major concern, it is nearly impossible to anticipate what the situation is likely to emerge and it carries the potential to kill jobs and skills in future. This has the highest probability of segregating the job into segments such as low skill will be paid less and high skill will get paid more.
Although there are challenges, experts realized that the fourth Industrial Revolution is more likely to enhance living standards by increasing the level of digitization and making the technologies available for all. PWC took a survey of 2000+ companies and 33%, says their company is advancing today and it’s predicted to increase over 72% by 2020. Their study declared that at the end of the Industry 4.0 transformation process, successful industrial companies will become true digital enterprises, with physical products at the core, augmented by digital interfaces and data-based, innovative services. These digital enterprises will work together with customers and suppliers in industrial digital ecosystems.