How The World's Top Executives Are Approaching The Fourth Industrial Revolution
Forbes Insights With Deloitte
The Fourth Industrial Revolution—which is characterized by the marriage of physical and advanced digital technologies such as analytics, artificial intelligence and the internet of things—affects most aspects of life today. Economists are analyzing its impact on society, attempting to forecast whether it will bring about more income inequality or create more opportunities. Scientists are interested in pioneering new capabilities from the collaboration of humans and machines in this new environment. Visionaries describe a brave new world, while also warning of the risks associated with some new technologies. And government agencies are figuring out how best to regulate this new world.
Making that leap from familiar terrain to true innovation can prove challenging.
Government and business leaders are at the forefront of influencing how Industry 4.0 impacts the world. They are ushering in the new era by introducing advanced technologies in their organizations, thus affecting how we work and live. What do they think will be the impact of Industry 4.0? How will it affect their organizations and workforces? What are the challenges, and what are the opportunities? These questions are explored in a new global research report from Deloitte and Forbes Insights, “The Fourth Industrial Revolution Is Here—Are You Ready?” The research draws on a survey of 1,600 business and public-sector leaders globally, as well as multiple one-on-one interviews.
Social Issues And The Corporate Agenda
The general consensus seems to be that the future is bright. When asked to choose the more likely scenario for the Industry 4.0 society—one bleak or one promising more stability and equality—87% chose the latter.
The executives surveyed believe public and private businesses will be the most influential entities in shaping Industry 4.0 societies. Seventy-four percent say public companies will play a big role. Private organizations come in second at 67%, followed by government agencies and regulators at 45%.
But at the same time, executives are less confident about the roles they or their organizations can play in influencing society in an Industry 4.0 era. Less than a quarter believe their organizations hold significant influence over key societal factors such as education, sustainability and social mobility.
Executives’ Outlook For The Industry 4.0 Society
Deloitte’s report reveals that executives are still grappling with many outstanding strategic issues with respect to Industry 4.0. Their mindset is one of hope mixed with ambiguity—they understand the need to think broadly about all stakeholders and the impact technology will have across organizations and society; but, at the same time, they feel constrained by financial and operational demands, as well as change-management challenges.
Only one-third of the executives surveyed are highly confident they can act as stewards for their organizations during this time of change. Further, just 14% are highly confident their organizations are ready to fully harness the changes associated with Industry 4.0.
Executives acknowledge they may not be ready for the new era, but this lack of confidence has not compelled them to alter their current strategies. Many executives continue to focus on traditional, near-term business operations (i.e., developing business products and increasing productivity) instead of focusing on longer-term opportunities in areas such as talent, mitigating cyber risk, and competitive disruption to spur innovation and create new value for their direct and indirect stakeholders.
The Workforce Of The Future
Given numerous business priorities, global executives appear to be focused on human capital the least. Despite the clear impact Industry 4.0 will have on workforces in every industry and geography, many executives do not express urgency when it comes to tackling the challenges of the future of the workforce. Talent and human resources are at the very bottom of their strategic discussions, and only 22% of respondents believe that the uncertain impact of Industry 4.0 on their workforces will have a significant effect on their organizations. Incongruously, the vast majority of executives still believe they are doing all they can to prepare their workforces for Industry 4.0.
At the same time, only a quarter of the executives surveyed expressed high confidence that they have the right workforce composition and skill sets needed for the future. The fact is, many jobs and required skills will change dramatically, though it may be too early to indicate how or to what degree. That said, two fundamental drivers that executives need to consider when trying to anticipate the changes are technology (e.g., robotics and cognitive/AI) and the changing workforce (i.e., gig economy, crowdsourcing, etc.).
The Role Of Technology
The shift to Industry 4.0 entails the ability to adopt and integrate digital and physical technologies to improve operations, become more productive, grow and innovate. This can represent a profound change for any organization. Executives understand this and say their current technology investments are strongly driven by technologies that can support new business models—which, they say, will have one of the greatest impacts on their organizations over the next five years. However, very few executives say they have a strong business case for investing in advanced technology. When asked what the hindrances are, executives most often pointed to a lack of internal alignment, a lack of collaboration with external partners and a focus on the short term.
To learn more, read “The Fourth Industrial Revolution Is Here—Are You Ready?”
