What is the Fourth Industrial Revolution?
The Fourth Industrial Revolution (4IR) discusses how new technologies like AI, big data, robotics, virtual reality, and 3D printing make the human experience more like its digital version. A massive improvement in manufacturing and efficiency changes how we work, live, and talk to each other in real time through software, analytics, connectivity, and talking to machines.
The Fourth Industrial Revolution (4IR), which is also called “Industry 4.0,” builds on the Third Industrial Revolution (or “digital revolution”), which began in the 1950s with the first computers, the Internet, and home electronics.
A team of scientists working on cutting-edge technologies for the German government first used 4IR in 2011. “The Fourth Industrial Revolution” was first used by Klaus Schwab, founder of the World Economic Forum, in a 2015 piece in Foreign Affairs and his book of the same name, which came out the following year.
The First Industrial Revolution changed how things were made with steam and mechanical power. The Second Industrial Revolution used electricity to make mass production possible. The Third Industrial Revolution used electronics and information technology to automate production. The Fourth Industrial Revolution (fourth IR) is characterized by the mixing of technologies that make the lines between the physical, digital, and biological less clear.
Synonyms
- 4IR
- Industry 4.0
What technologies make 4IR work?
The Fourth Industrial Revolution is making the world full of intelligent machines, advanced robots, self-driving systems, and networks that connect everything. These eight technologies are at the heart of it:
Faster computer processing
Moore’s Law says that computer processing power has grown exponentially over the past few decades. This has made 4IR possible. Machine learning and natural language processing (NLP) are two features that modern computers have that were impossible in the past.
This significant technological step has enabled automation processes and the creation of Everything-as-a-Service (XaaS). With XaaS, customers can access highly scalable software, services, and data through platforms that they subscribe to.
Quantum computing will eventually make processing even faster. It can make complex data models in seconds and solve abstract problems that regular computers can’t do yet.
Analysis of Big Data
Businesses can get helpful information and make wise choices because they can handle, process, and examine vast amounts of data, often in real time.
For example, faster processing has led to high-frequency trading in the financial services industry, where slight differences in processing times of a few milliseconds can give companies enormous benefits in the market.
Modern processors power machine-learning algorithms that look at market trends quickly to make forecasts and trades. This is changing the way global finance works.
Companies use big data daily to improve the customer experience, make personalized product suggestions, and suggest content that is important to the customer.
AI, or artificial intelligence,
AI, another result of the computer boom, has changed how businesses work in many areas.
Deep learning algorithms used to be too hard to train on big datasets in a reasonable time. This has allowed innovations like IBM Watson and Google’s DeepMind to make decisions like humans.
AI is also being used to automate jobs that people used to do all the time, like data entry, customer service, and security monitoring.
AI can also do things humans can’t, like recognize faces, analyze emotions, and personalize on a large scale (for example, algorithmic targeting). This is possible because of big data and fast computer processing.
Automation and robots
Among the most apparent examples of 4IR is robotics, which has grown from tools doing simple production tasks to complex systems doing complex tasks. Now, it’s not only changing businesses, but it’s also making people’s lives better.
In some critical situations, like space travel, mines, and surgery, robotics keeps people safe. In some situations, robots remove safety risks, such as in B2B production and warehouse automation.
Making things in three dimensions
3D printing adds a physical factor to computer-aided design (CAD), making it easier and cheaper for manufacturers to make prototypes and one-of-a-kind items. The industry is expected to grow 21% each year.
Because it is naturally flexible, it needs much less expensive tools than traditional manufacturing methods. This means that much less money is needed to make a wide range of goods and for research and development to develop a new one.
Rapid development also shortens the time it takes to make a product, which speeds up the time it takes to get to market and encourages rapid innovation and customization on a scale that was thought impossible.
Chain of events
Cryptocurrencies like Bitcoin are based on blockchain technology. But it can be used for many other things, too, such as:
- Smart contracts are legally binding deals that can be carried out automatically and without any help from a person.
- A decentralized autonomous organization (DAO) is a digital version of a business, community, or microeconomy that can run its business and handle its assets without a central authority.
- Tokenization is turning real-world goods into digital tokens that can be used with blockchain technology to buy, sell, or trade them.
- Safely store and send data, adding an extra layer of protection against hackers.
- Distributed ledger technology (DLT): this is used to keep records that can be checked and can’t be changed.
These technologies allow sending money without going through a trusted third party. This lowers the cost of transactions and makes financial markets more efficient and transparent.
They are also used to handle intellectual property, store digital identities, and speed up processes in the supply chain.
Blockchain technology is helpful for more than just finance. It can also be used to ensure data is sent and stored safely. Data on a blockchain is shared, encrypted, and unchangeable, meaning only allowed parties can access it.
In this way, it’s the best way to store private information about customers or businesses.
Web3
Web3 is a term for new technologies like blockchain, distributed computing, and peer-to-peer networks for the Fourth Industrial Revolution (4IR). It is sometimes called the “decentralized web” and is often grouped with blockchain.
These technologies allow programs to run on a group of computers without a central server. This gives users more power over their data than ever before.
Developers can also use Web3 to make self-running systems that can talk to each other directly. This creates a web of trust that links different devices and platforms.
For example, look at how people use the web today: they talk to centralized sites like Google and Facebook.
Users give up control and privacy over their data to use these platforms. This is the “problem” with this approach.
Web3, which is still very new, wants to change this by letting users connect directly and safely with apps that are spread out.
Its present issues include being able to grow, being easy to use, and releasing carbon. Making the energy needed to run its networks dramatically affects the environment, even at the small scale where it works now.
The use of nanotechnology
Nanotechnology is a branch of science that works with matter at the atomic level. To make new materials, scientists can change individual atoms and molecules.
It is already used in biomedicine, technology, energy production, information processing, and many other fields, and there is much room for it to grow.
A biomedical company could use it to make tiny robots that can get inside cells to fix damaged tissue, or they could use it to make tiny solar cells that can collect energy from the sun.
Nanotechnology is one of the main reasons why computers can handle information faster. It makes microchips and semiconductors smaller and smaller. It made it easier for the whole communities of software-as-a-service, cloud computing, and artificial intelligence to come together.
How to connect the Internet of Things (IoT) and 5G
The Internet of Things (IoT) is a term for the growing ability of things to talk to each other through computing and networking devices. At first, computers were used to link people together. Now, they help things “think” and “talk” to each other.
Since the early 2000s, IoT has made supply lines more efficient. Now, with 5G networks, their use is growing exponentially. 5G connections are faster and have less latency, the time between asking for data and getting it. This makes reaction times between objects that are connected better.
Shortly, networks of sensors will be used to keep an eye on and improve almost everything, from medical devices to building structures.
Mixed reality (AR) and virtual reality (VR)
VR and AR work together to let people interact with digital material in a fake setting.
VR gives people an immersive experience that lets them explore virtual worlds and connect with things as if they were. For example, it’s already been used in business, healthcare, education, entertainment, games, and manufacturing.
The headset is the most well-known example of VR. It has a set of sensors and software that let users simulate real places.
AR takes this idea further by adding digital features to the real world. Construction, engineering, marketing, retail, travel, and gaming are all fields that use it.
For example, Amazon’s AR View lets people see how furniture and home decor will look in their rooms before buying it.
What Businesses Need to Know About the Fourth Industrial Revolution
A critical difference between 4IR and the three that came before it is that it affects every part of a business. The first three Industrial Revolutions only changed certain production parts, like steam, electricity, and electronics. The technologies driving the Fourth Industrial Revolution, or 4IR, affect every part of a business, from designing products and managing the supply chain to helping customers and providing support.
Changing to digital
A significant change in how businesses work and give customers value is at the heart of Fourth Industrial Revolution (4IR). It means changing systems, processes, workflows, and the company’s attitude thoroughly and organizedly.
Digital transformation isn’t just happening in one area or field, either. It permeates every business level, making it easier for everyone to work together and get things done.
Think about how much better the flow of data is between CRM software and an ERP system in a business that has gone digital. They used to be separate, but now they work together seamlessly, giving you a complete picture of every customer, from the first touch and sales to support and service after the sale (along with internal business processes).
Digital change also makes predictive analytics more valuable by giving companies tools like McKinsey’s Dynamic Deal Scoring. Business leaders can use advanced analytics to guess what future behaviors and trends people will have. This helps them focus on the right sales chances, run successful marketing campaigns, and help customers succeed.
Automating Things
Automation may look different in different types of businesses.
- Automation in manufacturing refers to reducing the amount of manual labor required by using robots and other tools.
- Logistics could mean using self-driving delivery cars or uncrewed aerial vehicles (UAVs) to get things to people faster.
- In retail, automation could track how customers act and what they like so companies can make goods and services more relevant to each person.
- Sales automation helps sellers connect with more customers, stay in touch with all of them, find new leads, and give prospects more value.
- The billing and accounting teams automate payments and invoices to cut down on manual work and avoid common mistakes in bookkeeping and payment collection.
Most companies use automation in ways they don’t know about because software is commonplace nowadays.
For instance, CPQ software instantly makes quotes and contracts. This may not seem like a big deal, but it saves sales teams weekly work hours.
Workforce Spread Out
About 92% of workers do some work from home at least once a week, but the idea of a spread workforce won’t always be the same.
There is a plan called “distributed workforce” in which employees are not all in the same office. Instead, they cover more than one city, country, or globe. To handle this well, businesses rely on digital tools that let people work together and talk to each other instantly, no matter where they are located.
Cloud-based technologies have made the distributed workforce possible by letting people safely access essential work apps and data from anywhere. This has helped people work together and kept the process going smoothly.
Collaboration platforms like Slack and project management tools like Asana have enabled teams to collaborate, share files, and oversee projects from anywhere globally.
A distributed staff can be good for businesses in many ways. Global Workplace Analytics data shows that a fully-enabled distributed workforce is usually 35% to 40% more efficient. Businesses lose $600 billion every year because of distractions at work.
Diversity also brings new ideas and skills, which helps with creation and competition. It also saves a lot of money because it reduces or eliminates the need for office space, energy, and other overhead costs.
Creating New Products
One of the most essential things that the Fourth Industrial Revolution (4IR) does is help with product creation. Businesses can use 4IR technology to make and test goods faster than ever, whether software or hardware. This is possible because machine learning is improving quickly.
- Software developers use development tools with AI for the Fourth Industrial Revolution (4IR), such as Amazon Machine Learning, to find patterns in large datasets and automate jobs related to feature engineering. Environment-as-a-Service (EaaS) lets them set up cloud test settings immediately.
- Manufacturers use generative design tools, AI, and machine learning to make new products more automated. These tools make 3D models of products best for specific performance requirements.
- Additive manufacturing speeds up the process of making complicated, high-precision parts in aerospace, healthcare, construction, and industrial machinery.
It takes less guesswork to make products with 4IR and get them to market faster. AI-powered analytics can track how customers use and are satisfied with goods in real time, giving companies helpful information for making improvements in the future.
New ways to do business
These changes are part of a more significant trend called a paradigm shift of the Fourth Industrial Revolution (4IR). As technology gets better, new business models are starting to appear.
Model of Flexible Consumption (XaaS)
With the flexible usage model, customers don’t have to buy a product or service all at once. Instead, they pay for what they use, usually on a subscription basis. Customers now have more options, more room to grow, and more flexibility to change thanks to the shift toward flexible consumption, which has also given businesses a steady stream of repeat business.
The software business has some of the best-known XaaS examples, such as Salesforce and Microsoft 365, both software-as-a-service (SaaS) services. The Fourth Industrial Revolution (4IR), on the other hand, is making this model quickly spread to other areas.
More and more people are using Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Mobility-as-a-Service (MaaS). The second one shows how the transportation business is moving toward unified, multimodal services that people can use whenever they want (like Uber and Lyft).
The circular economy
The “Circular Economy” tries to be environmentally friendly by recovering and reusing things. Businesses can set up closed-loop processes where waste from one product is used to make something else.
For instance, a business with advanced manufacturing might use 3D printing to make new products from recycled materials. This cuts down on waste and costs.
In the same way, businesses can use connected tools to keep an eye on how their resources are being used and make them more efficient.
Using the crowd
Companies like Uber, Airbnb, and Kickstarter use the crowd’s power to offer services, share assets, and raise money for business plans. Digital platforms allow these businesses to unite large groups of people in ways that were impossible before the 4IR.
This model is one of the most useful in a world that is becoming increasingly digital because it helps other people make money. For example, Uber makes things easier for its riders and makes it easy for anyone with a car to make extra money.
Dealing in data
Big data is like a new currency because every business uses it to make choices. It’s the primary source of income for many businesses.
Companies that do research and advise, like McKinsey and Forrester, gather, sort, and study data to find patterns or make predictions. Using AI and machine learning, these businesses can usually provide specific suggestions, analyses of trends, or predictions, making them very useful in the decision-making process.
Other businesses make money by selling what seems to be a natural product, but what they’re doing is selling your data.
Tesla, for instance, gets information from the hundreds of thousands of cars on the road. They use all of this information to feed their AI models, which improves the accuracy of their self-driving car technology. It will eventually sell this information to other car companies that want to make self-driving cars but don’t have the right technology.
One more example is supermarket companies. Customers can join their free membership programs and get huge savings, but all they’re doing is gathering information about what people buy. It seems like a lot of shop revenue is going away because they can use this information to determine what customers want, make promotions more relevant, and choose and place products more efficiently.
