The fourth industrial revolution is well on its way, and we are in the midst of it. We are aware of the first, second and third industrial revolution and the advancement that it has brought us.
The fourth industrial revolution, also known as industry 4.0, is the evolution of what we call ‘smart factory’. If you’ve been poking your nose into technological news, you’ll know that we are advancing pretty fast into the ‘future’. Moreover, industry 4.0 is exactly about that, the advancement of our automation, machine to machine to human interaction, digitisation of most of our sectors and of course trends like AI and other tech improvements.
Industry 4.0 is more than just a technological revolution; it is a disruption, a disruption in almost every sector. It is more than just the manufacturing sector when we think of the world ‘industrial revolution’, with Industry 4.0, a lot more sectors will be affected by the implementation of technology.
Just like all our other industrial revolutions, the future is unknown, and the impacts are projected to be positive. Hence, it is vital for us as the startup community to be aware of the changes that we are pushing for or the impacts we have to take into account now.
Plus the speed that we are advancing is pretty daunting, while we push for technological advancement in a particular sector that we are in, we have to understand that all the other sectors are doing the same.
Trends to watch out for
Even if you are not fully aware of the term Industry 4.0, I’m sure you will know the trends that brought us into this new revolution.
Industry 4.0 trends are all around us, digitisation of different sectors like AR and data, the democratisation of power like blockchain, Internet of Things deployment, Future of work and the more well-known trend, AI.
AI seems to be heading the trend as of late, and 2018 has been dubbed the year of AI. We’ve been blessed with AI implemented things like self-driving car, chatbots and a few occasional threat of robots taking over. However, AI is doing more than just the superficial stuff; it is assisting humans to be more productive and more efficient with handling the large volume of data that we have now.
Implementing and digitisation of the different sector is basically what industry 4.0 is all about, an evolution more than revolution as some will argue because we are not able to achieve things that we will not have ten years ago. Better communication with animations and machine to machine communication, bringing reality to the digital space and vice versa, we are not able to achieve and experiment much more.
So what does this all mean? What’s the disruption that we are all about to face?
What impact will it bring
The impact of Industry 4.0 is real and very much happening in the near future.
I mean, even the government is fully aware of it. The Prime Minister’s Taskforce was formed following the release of the report of the Australia-Germany Advisory Group in November 2015.
Chair of the Prime Minister’s Industry 4.0 Taskforce, Jeff Connolly, said it is an opportunity to grow.
“Australia should see the fourth industrial revolution as an opportunity. If we establish a broad-based capability to use global engineering and manufacturing platforms based on advanced materials, the often spruiked access by our SME’s to global supply chains are more a reality now than they have been at any time in the past.”
As mentioned, this revolution’s the future is unknown and the impacts are projected to be positive, with growing opportunities to do more with technology. However, with every advancement with technology, there are projected negative impact that might follow suit.
Such as cybersecurity, disruption of the workforce and jobs, and just the all-around uncertainty of the future can be pretty daunting. There might be higher inequality because of the shift in job skills and the slight nudge for the current workforce to always catch up with the required skills to be relevant.
But of course, the positive side of things will bring in better long-term efficiency and productivity gain, which means projected reduction in cost and even increase in revenue. While we cannot really put a value on either impact, history will show that both positive and negative impact will follow suit.
So how will Industry 4.0 affect the startup community? That’s what we want to find out.
MOVUS specialises in Industrial IoT (IIoT). Its FitMachine® technology transforms dumb machines into ‘smarter machines’ and enables this on a global level through consumer styled simplicity combined with world-class artificial intelligence.
Kingsbury is the former Innovation Centre Director at Lab22 at CSIRO and now runs her own consulting firm Additive Economics advising businesses in metal addictive manufacturing (e.g. 3D metal printing). Alex was also a speaker at Pause Fest 2018, Australasia’s premier creative, tech and business event.
The industry 4.0 is heading toward full swing, how does this moving trend affect the tech start-up space?
Parson: The tech startup space needs to look at Industry 4.0 in terms of industry segments. The level of maturity in Industry 4.0 is really segmented, the mining and oil & gas industries (heavy asset industries), would argue that they have been doing ‘industry 4.0’ for many years. I was working on ‘industry 4.0’ projects in mining and rail nearly 10 years ago. What the tech startup space needs to seriously consider is what segments are they providing value to and what level of maturity is that sector at. The current excitement is that industry 4.0 capabilities are being more broadly adopted into light asset industries mainly manufacturing. Secondly, last year I was invited to Germany to present to the top 50 executives of a large German industrial manufacturing firm. I was on the only Australia startup selected from a dozen globally. Our selection was largely based on our industry credibility and experience. What the tech startup space needs to also understand is that industry partners are the key understanding industry challenge and ultimately to success.
Kingsbury: In so many ways tech start-ups are ahead of the game with Industry 4.0. While the existing industry has to integrate and translate their existing manufacturing line into a digital framework, tech start-ups are so often already starting within a digital eco-system; adaption and change is easily accommodated by a start-up and is also expected, this is the beauty of the agility that usually comes from being in the start-up phase, so in that way Industry 4.0 should be embraced as early as possible while the business is fluid enough to accommodate change.
Digital component is a focus in industry 4.0, what should tech startups or future entrepreneur take note of, in terms of this shift towards a more digital space?
Parson: Digital, as a trend, is not new, particularly in the consumer space. The world’s largest businesses are now the winners of the consumer digitisation revolution that started 30 years ago. The next 30 years will be the digitisation of the industry. There are massive lessons to be learned from the consumer world that can be readily applied – specifically the role of simplicity and frictionless user adoption. At MOVUS we use these lessons on a daily basis, whilst our brand is industry-centric, consumer simplicity and removing barriers to adoption are core values for our team – our ease of installation, ease of use and ease of adoption are all key tenements that we have learnt from the digitisation of the consumer world, and we are actively applying to Industry 4.0
Kingsbury: Start-ups need to be more aware of Industry 4.0, as their very survival may depend on it; adopting Industry 4.0 principles will either give you a competitive edge or keep you relevant with your competitors. Start-ups need to be aware that potential investors, product development houses, and development partners may not be as up-to-date on Industry 4.0 concepts, so it is important that start-ups inform themselves on Industry 4.0 concepts and discover how Industry 4.0 will best benefit their business. As a start-up’s business begins to grow, certain elements will get locked down, this enables growth, but a start-up needs to ensure that they are not going down an already well-trodden path that could be navigated away, or made redundant, just by being aware or and utilising Industry 4.0 principles.
Why should we embrace the changes that come with industry 4.0, from the manufacturing sector to supply chain?
Parson: The Australian manufacturing industry, in particular, has been in decline for many years and the well-publicised closures of the automotive manufacturing in Australia are a reference to that. Australia still has one of the highest cost of labour in the developed world. We cannot compete on labour, but we have significant skills and capability to compete on our digital capabilities. Embracing and digitising our industries from manufacturing to the supply chain will allow us to continue to compete globally. Otherwise, this decline will only escalate.
So what now?
Wonderful insights by both industry players, undoubtedly valuable advice to adhere to. The reality is that we are pushing towards technological advancement, and where will that head to is really not certain.
The future is exciting but also anxiety-inducing with the unknown looming closer and closer. But what we can do is innovate with awareness of what every other sector is doing. By having awareness, we might alleviate potential issues that we might face and even gain valuable opportunities that are birth from this advancement. As a startup community, we identify strongly with the word disruption. Therefore we know what impacts Industry 4.0 will bring because the trend is defined as a disruptor.
Whether we are ones pushing for Industry 4.0 or not, Industry 4.0 will happen, and it is only wise to be educated on the potential impacts it will bring. Like a reality show that you are obsessed with, the Industry 4.0 trend is something we would strongly suggest you keep up with.
Here’s a video by World Economic Forum on the Fourth Industrial Revolution, that you could check out.