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  December 2nd, 2016 | Written by

The Fourth Industrial Revolution: Benefits and Challenges

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  • There isn’t a single aspect on the supply side that isn't being transformed.
  • Companies are being compelled to take a closer look at how they do business.
  • 3-D printing and nanotechnology have segued from sci-fi to reality.

Many of us learned about the Industrial Revolution back in high school. We had to memorize the names of a lot of inventors (Robert Fulton – was he the steamboat or the cotton gin?) and discuss the ramifications of factories taking precedence over farms, and how automation can simultaneously make life easier, and more challenging.

But much has changed since the 1800s, when water and steam power were first used to mechanize production. And it may surprise some to learn there were actually three industrial revolutions – and we’re now in the midst of a fourth.

Following the original that brought Fulton into our history books (and yes, if you guessed “steamboat” you were correct), the second was ushered in by the harnessing of electricity. The third, which began not that long ago, focused on information technology.

And the one some say we’re in now? It’s a revolution in which physical, digital and even biological technologies have been fused in a way that has transformed not only how we work but also how we live, play and communicate.

Everything is connected

The biggest difference between the current revolution and those that preceded it is how quickly its changes have been adopted on a global scale, and the impact they have had on every type of industry. Billions of people now have a phone in their pockets that provides instant conversation, negotiation, contract signing and transmission of funds with anyone anywhere in the world.

What does that mean for business and trade? It will take less time to do a lot of stuff, which is more efficient – and more efficient means more productive. It will cost less to send goods from one place to another, and for the sender and recipient to negotiate the deal. Logistics and global supply chains will both benefit as a result. And when the overall cost of trade drops, it opens up access to new participants and new markets, resulting in a rising tide of economic growth.

There isn’t a single aspect on the supply side that hasn’t been transformed, from research and development to marketing, sales and distribution. Many of these changes have been triggered by developments from the demand side, where more transparency and greater insight into consumer engagement have shaped the way products are made, sold and delivered.

Companies are being compelled to take a closer look at how they do business. Putting the customer first was always a good slogan but now it’s a necessity, as they have a world of goods to shop from and prices to compare instantly with the touch of a smartphone screen.

The downside

With this revolution, as in the past three, technology and automation now completes tasks that used to require a salaried employee.

In the long run, the employment market may shift toward better, safer jobs; but in the short term there will be fewer available positions between the executive boardroom and the minimum wage laborer.

That may be one reason why we saw the presidential election outcome that we did.

The only constant: change

There were likely people after each of the previous industrial revolutions that believed automation and technology has gone as far as it can go. But that’s probably not the case this time, given the rapidity with which new technology breakthroughs are occurring.

Just ten years ago we could not have envisioned the processing power and storage capacity of devices we now take for granted. 3-D printing and nanotechnology have segued from sci-fi to reality. Logistics companies are already looking into trucks that drive themselves. Heaven knows where artificial intelligence will one day take us—hopefully not into those dystopian futures so often portrayed in summertime movies.

The challenge, as it has been before, will be finding the right balance between human and technological resources. Our closer reliance on technology and the innovative ways in which it serves our business needs may, some fear, turn us into automatons—just one more wirelessly connected cog in the digital supply chain.