The next industrial revolution is upon us … and many don’t even realize it.
If history is any guide, the subtle disappearance of the “old world” and the drastic emergence of “new world” is painfully obvious only when spelled out in history books. But, if a new world is truly on the brink of arrival, would we know it?
The truth is we are living in a time of extraordinary change. A new revolution is upon us: the Fourth Industrial Revolution — where every individual, business, industry, and government will be impacted by ubiquitous connectivity, breakthroughs in artificial intelligence, and transformative technologies that blur the boundary between human and machine.
Innovations in technology make our lives more convenient and give rise to a new era of economic productivity. It is, therefore, worthwhile to consider exactly what kind of shifts are on the horizon, and what opportunities lie ahead for you and your organization.
To Not Move Forward Is to Fall Behind
Looking back, each Industrial Revolution marked an important turning point in history. Standards of living improved for society at large, but only the businesses that embraced innovation were able to sustain and grow.
A quick review of the previous Industrial Revolutions:
The First Industrial Revolution marked the shift from society’s reliance upon manual sources of energy (human and animal labor) to fossil fuels and manufacturing.
The Second Industrial Revolution introduced electrical power and telephones, giving rise to the mass expansion of railroad and telegraph lines. What followed was unprecedented movement of people and ideas, culminating in a new wave of globalization.
The Third Industrial Revolution was a battleground for profound change. When ubiquitous automation entered the picture, world renowned economist John Maynard Keynes coined the term, “technological unemployment” to describe labor-saving innovation outpacing the ability to find new things for people to do.
The first three revolutions lasted 80, 40, and 30 years, respectively. To ignore the First Industrial Revolution and suffer the consequences would have taken decades. To ignore the Fourth Industrial Revolution is far more dangerous; consequences could unfold overnight.
Consider: 88% of the Fortune 500 companies that existed in 1955 are gone today.
Economic lesson: One can reasonably count on nearly all of today’s Fortune 500 companies to be replaced or, at least challenged, by industry disruptors over the next several decades.
Failure to Prepare for Digitization Will Be Costly
As we enter the Fourth Industrial Revolution, rapid and unpredictable shifts in technology will present both challenges and opportunities. The sheer volume of available data in the new world could fundamentally change the way society operates by developing previously unthinkable solutions to problems we didn’t know existed. Digitization of everyday things, when coupled with the ability to self-enhance through artificial intelligence, will drive significant change in the global economy.
Failure to prepare for and respond to digitization in the Fourth Revolution will be costly, especially as new market entrants test and evolve. The dramatic rise and fall of video rental giant, Blockbuster, is a poignant illustration of how digital innovator, Netflix, overtook the $5 billion incumbent by gradually siphoning off its customer base. As Netflix adoption increased, little by little, Blockbuster’s market position eroded — until eventually, the once-unbeatable company declared bankruptcy and disappeared.
Incumbents: be warned. As we enter the Fourth Industrial Revolution, the rise of cyber-physical ecosystems will be a pivotal enabler for a new era of economic output.
If your organization is not already taking steps to prepare for this shift, now is the time — or risk becoming one of those that gets overtaken.