The UK has had a productivity issue for many years, but it experienced a dramatic downturn since the 2008 financial crash. The issue is significant as workers in the USA, France and Germany all generate almost 20% more income from each hour they work. Whilst workers in the UK have similar incomes to those in France, they need to work almost 20% more hours to earn them.
Lack of investment in technology has often been cited as one of the main reasons for Britain’s low productivity. I support that perspective and argue that to regain productivity the UK should rapidly aim to change that, with a focus on the advanced computing technologies such as artificial intelligence that make up industry 4.0. I also provide an overview of how I can help make this change happen. Increasing productivity is about changing business models and processes, not just applying new technologies. It should also be stressed, that these ideas are not just about manufacturing, they are relevant to every sector of the economy.
What is Industry 4.0
As illustrated in figure 1 Industry 4.0, often also referred to as the 4th Industrial revolution is a concept that argues that current digital trends including artificial intelligence, big data, cloud computing, augmented reality and the internet of things are all part of a single and interrelated technological revolution
To put this into context the first industrial revolution, is the one that most people are fully aware of, the move from agriculture to industry enabled by coal and steel. The second was mass production, most famously applied by Henry Ford. The third took place during the second half on the 20th Century, it included, electronics, telecommunications and most significantly computing.
The Opportunity of Mass Collaboration
Many articles including this one outline how industry 4.0 can increase productivity. Benefits include the use of sensors to inform analytics and enable executives to make faster and more accurate decisions. As well as speeding up decision making additional reported benefits include increased quality, improved machine reliability and improved worker safety.
What sets the fourth industrial revolution apart from the third is changes in data collection, data processing and mass communication. The development of sophisticated computing in the forms of artificial intelligence (AI) and machine learning have opened up the potential to do almost everything differently. One of the most significant developments is computing that can make sense of unstructured messy data. This development enabled the materialization of big data. Big data is not just, data sets that are large in volume, big data is also defined as being both rapidly growing and unstructured. Previously, computers could only make sense of data sets neatly arranged in databases, now they can also make sense of data without requiring it to be formatted for processing. The ability to make sense of unstructured data has also enabled the emergence of the internet of things.
The internet of things (often referred to as simply IOT), is devices that are connected to the internet without being directly controlled by people. For example, traffic lights, thermostats, lights and even car components are increasingly connected to the internet. Devices directly controlled by people, such as laptops and smartphones now represent less than 50% of the things that are connected to the internet. Such a development is significant as, all these things collect data, data that could be processed to inform decision making in many different ways. The total amount of data produced around the world now doubles every 2 years. IOT has been enabled by AI, as it requires computers capable of making sense of messy data to bring together and make sense of the uncoordinated data from many different products made by many different companies.
Perhaps the most significant component of Industry 4.0 however, is mass collaboration. In their Book Wikkinomics the authors Tapscot and Williams famously argued that mass collaboration will change everything. Here I am arguing that the mass communication they described is part of Industry 4.0. In the early days of the internet, like traditional media, it was based on one-to-many communication. More recently, as social media and web searches have developed, different forms of communication between different people and devices are emerging. These have enabled collective intelligence responses that bring together people and computers to solve complex problems. This article illustrates some applications of collective intelligence to Covid19.
Business Model Opportunities
For me one of the interesting things about Industry 4.0 is that it’s about business model change as much as technology change. This conceptualisation highlights that to survive and thrive organisations need to change their approach to business not just bring in new technology to outdated models
Industry 4.0 is often discussed from a technological perspective of machine learning, algorithms, smart sensors, and connected assets. But the truth is, its biggest impact will be on company business models, especially those of well-established companies (Piller 2018)
Speakers at a smart city conference I attended a few years back suggested that Industry 4.0 is ground zero. everything prior to this is now outdated, this includes business models and ways of thinking about business. As most companies and government departments are based on business approaches that were part of Industry 3.0, these business models are now becoming redundant. 4.0 will disappear within 20 years. The logic of this argument connects to many well established business theories including disruptive innovation and radical efficiency. The idea is simply that companies that fail to innovate will disappear because new more efficient companies will emerge. Examples of companies with Industry 4.0 business models include Uber and Air B and B.
In his book Multiplied, Ben Holliday, the head of design for the digital transformation agency TPX impact states:
“The technological advances that have fuelled this Fourth Industrial Revolution have enabled vast progress, but it’s also worth noting that they don’t affect people equally. The rapid pace of change has been uncomfortable for those without the skills, jobs or opportunities to operate in this new reality.”Holliday, Ben. Multiplied (p. 18). TPXimpact
I suggest that is is not just true at an individual level, organisations that fail to adjust to this new reality will also struggle, they will find it difficult to compete with others that have harnessed the potential that Industry 4.0 has to offer. This is where I can help.
My consulting offer
Speakers (at the conference mentioned earlier) highlighted the limitations of consultancy tools such as LEAN for addressing the challenge of moving to Industry 4.0. One speaker argued that tools such as LEAN on the efficiency of current structures. Whilst these may result in incremental improvements, they are not sufficient to address the challenges that companies will face when their competitors start adopting Industry 4.0 business models. This approach may involve new structures and new approaches, rather than just improving efficiency within old ways of working. By the efficiency of current structures and approaches will not be enough, nowhere near.
My consulting offer is to apply a combination of systems thinking and design thinking techniques to help organisations reimagine the future and their place in it. This is the kind of radical approach that is needed to help address the scale of the challenge that most organisations now face.
Tapscott and Williams in their bestselling books Wikkinomics and MacroWikkinomics made a very similar argument to the one advocated by speakers at the Industry 4.0 event I refer to. Their tag line is that mass collaboration changes everything, including how businesses communicate, compete, and succeed. They stress that this does not just relate to the private sector. In my PhD research I explored how the healthcare sector could radically transform itself by harnessing new technologies and adjusting business models and approaches in line with it. My expertise however is not limited to healthcare I have also worked with clients in transport, policy, and arts organisations. My core expertise is not primarily sector specific but in business combined with the design thinking, systems thinking and creative techniques that I can apply to help guide organisations through a process of digital transformation to enable then to thrive throughout the 21st centaury.
I am particularly interested in opportunities where I can help make a positive difference to the world in some way. This could for example be to help an organisation focussed on tackling climate change or one involved in healthcare or social change. On a recent project I helped a client improve customer experience through information technology in public transport. That very much fitted my ethos as I see improving public transport as essential for addressing climate change.
[…] outline the concept of Industry 4.0 in detail in this recent blog post and so just give a brief summary here. Industry 4.0 often referred to as the 4th industrial […]