Now, we are in the process of a significant transformation, when our material world combines with the virtual one, and generates new approaches and business models.
According to the World Economic Forum, robotics and autonomous transport, artificial intelligence, new materials, biotechnologies and genomics will quietly function in the production process by 2020. In simple words, it can be characterized as computerization of manufacturing or Industrial Revolution 4.0.
Many of these elements have been successfully used in practice for a long period of time, but just combining them into one holistic system makes the concept of Industry 4.0 possible. It provides a new level of production efficiency and additional income thanks to applying of digital technologies, formation of network interaction between suppliers and partners, and implementation of innovative business models.
Firstly, the pace of development. As each successive innovation creates an increasingly efficient technology, the revolution is developing exponentially. Never before in the history of mankind changes have been so rapid.
Secondly, the dimension of changes. The real and the virtual world penetrate into each other, giving birth to breakthrough solutions. Consequently, completely different technologies are combining with each other. Systems become even more complex and integrated. Transformations occur vertically and horizontally. As a result, all levels are affected: man, society, state, the world.
Thirdly, whole systems change. Technologies affect internal and external components of systems. We have to revise the basic concepts: power, money, partnership, relationships, property, and identity.
In addition to the advantages, Industrial Revolution 4.0 carries a number of threats, as increasing of inequality and society polarization due to global changes in labor market. These changes will affect the well-being of people.
Not all companies with a long history will survive in this process of digital transformation. About 52% of Fortune 500 companies in 2000 are no longer available today. However, those that transformed will have twice as much gain: consumers are loyal to brands they respect and are ready to stay with them if they go into an individual format.
The fourth industrial revolution provides a complete automation of all processes and stages of production. Now it becomes possible for manufacturer to order all necessary components, control its delivery as well as track finished product, setting up this process through automation system. In this way, everything is produced now: from "smart" pans to laptops.
In previous classical model, companies usually sell its goods and then forget about them. However now, after-sale behavior has been changed: producers try to extend their communication with clients by controlling terms of product use, changing settings remotely, updating software, as well as taking product for disposal at the end of cycle. For example, Apple actively implants this strategy though a program of old iPhones processing: robots disassemble them, remove the most valuable parts and use it in the production of new smartphones.
Therefore, the concept of "Industry 4.0" means an unceasing interaction between 3 elements: manufacturer, product and client. This interaction becomes possible due to fully automation of production process.
Now we observe such situation when customers have changed their behavior, they want an individual approach and unique products. Representatives of so-called ‘native digital’ generation, who grew up in the Internet age, accustomed to a wide range of proposals: millions print options on cups, all shades of jeans, any equipment and furniture at a distance of one click. For this reason, people try to emphasize their individual peculiarities and express their mood, or in other words, to be unique.
Enterprises should produce unique products. Introduction of "Industry 4.0" principles allows obtaining a number of benefits that were not available in traditional models of the past. For example, now companies try an individual approach by personalizing orders according to clients’ preferences. As a result, these actions promptly increase customers’ loyalty. Old plants and factories turn into "smart" and begin to produce literally unique products on an individual order.
For example, today you can download the Nike application or go to the company's website, choose a sneakers model, draw it in your favorite colors, pay and get it in a few weeks. Moreover, it costs about $120 - no more expensive than usual non-personalized sneakers. The manufacturer is able to offer customers more unique options for their product, which becomes an additional source of revenue and increases the profitability of business.
Production costs of individual order at a company with a high level of automation are small: if earlier under each such pair of sneakers it would be necessary to adjust the equipment manually, now the computer system does it on its own in a few seconds. Before most companies built factories in countries with cheap labor forces (as China, for example), now production process can be organized anywhere due to full automation. So, the fourth revolution changes not only some businesses individually, but also affects allocation of forces at a global level.
According to the speech of Klaus Schwab at World Economic Forum, major breakthroughs will occur in three directions.
Industrial Revolution 4.0 is unique in terms of pace, dimension and systemic transformations. Changes occur in all directions, and their speed is constantly increasing. The engine of change was digitalization and networking. They made it possible for real and virtual worlds to grow together. As a result, potentially everything becomes possible that does not contradict the laws of nature.
We are at the beginning of Industrial Revolution 4.0, and are able to influence on its development. The world is changing rapidly, hyperlinked, more complex and fragmented. Despite various doubts, Industrial Revolution 4.0 will come anyway. We have already seen its beginning, as it gradually but persistently enters our world. Well, further prosperity, how soon it will fill the entire planet completely - it remains only a matter of time.