Last week WTCD covered some relevant economic topics discussed at the World Economic Forum Annual Meeting held at Davos two weeks ago. This entry is the last post of the series, introducing Revolution 4.0. This term is becoming a widespread concept but still unknown to many of us.
The New Digital Transformation
Technological breakthroughs are blurring the existing boundaries between the real world and the virtual world. Industry 4.0 is a complex concept to explain. This new industrial revolution is fusing the physical, digital and biological spheres, altering the world as we know it nowadays.
What is Industry 4.0?
“A collective term for technologies and concepts of value chain organization’ which draws together Cyber-Physical Systems, the Internet of Things and the Internet of Services.”
Industry 4.0 is a further developmental stage for humankind. This new wage of industrial revolution is challenging the organizational and management ways of doing business. This new revolution will boost and evolve manufacturing processes, modifying the value chain process.
Some characteristics of this new industrial revolution are:
- Horizontal integration via new generations of Global Value Chain Networks.
- Vertical Networking of Smart Production Systems.
- Consolidation of new technologies.
Industry 4.0 is a symbiosis process, connecting people with technological devices. Artificial intelligence is the outcome of the interaction between the biological world and the technological progress.
Why can we speak about a new revolution instead of a prolongation of its antecessor?
The First Industrial Revolution was caused by water and steam powered machineries, creating mechanic facilities; followed by the Second Industrial Revolution, which consolidated electrically powered machines, giving rise to the division of labor as well. The Third Industrial Revolution brought the electronics and IT systems, going a step further in automate production.
Now, Industry 4.0 introduces the Cyber-Physical Systems (CPS) a smart integration of internet connected machines and human labor. We are leading towards an Internet consumer-oriented production. This new high- technological strategy will allow a service oriented production, that is to say, we will be able to tailor and customize products, bringing innumerous production possibilities. Industrial internet will allow the monitoring of thid new production system.
Why Industry 4.0 is not a mere extension of the Third Industrial Revolution
The velocity of breakthroughs, its scope and impact over the global value chains are transforming the systems of production, management and governance at an unpreceded level.
Industry 4.0 will help to improve production efficiency, creating smart-factories, reducing thus energy waste.
Challenges & Advantages
Industry 4.0 will increase the global income level and the quality of consumers’ life as well. A general increase in the efficiency of transportation, services, production is likely to occur.
The challenge that this new technological era may cause is the disruption of the labor markets. Automatization is believed to replace human labor by machines. It is hard to foresee the consequences this may have, but the most probable consequence would be an inequality labor gap between low-skilled and low-wages jobs and high-skilled and well-paid jobs on the other hand.
Notwithstanding, the business world and the economy always have a source of surprise, it is really hard to predict how this dependence on technology can affect our world in the long-term. One thing is for sure, we are living in a digital era, which has proved that more advantages than inconveniencies.
Last but not least, we did not want to miss this opportunity to invite you to join this new Revolution with our partner WebPort Global. WebPort Global is part of this whole movement. WebPort Global introduces a new way of doing business: boundaries are no longer a limit. Become a member today, and have international connections at your fingertips. Find out more about what WebPort Global can do for you.
Macarena Ochoa Martínez
International Trade Associate – World Trade Centre Dublin
1 February 2016