As a business owner, you may have seen technology and business publications use the term ‘Fourth Industrial Revolution’ and ‘Industry 4.0’ lately.
Don’t dismiss this as industry hype and jargon – the next wave of digital technology is maturing fast and rapidly changing our world.
To understand the fourth industrial revolution, let’s first look at the other three industrial revolutions:
The first industrial revolution around 1785 was about using steam and water-powered machines to mass-produce goods. The second industrial revolution in the late 1800s was triggered by electrification and the expansion of rail, telegraph and telephone. Next was the third industrial revolution, the age of the transistor and microprocessor – the birth of the computer age.
Now, the fourth industrial revolution is underway, triggered by dramatic advances in connectivity and software. This revolution joins together the physical and digital worlds – and as was the case with the previous three industrial revolutions, the outcome will see greater automation, higher productivity and lower costs.
This fourth industrial revolution is driven by connected devices and sensors (the so-called ‘Internet of Things’), cloud computing, advanced robotics, intelligent software, artificial intelligence (AI), 3D printing, virtual and augmented reality, and a range of other technologies.
What makes these technologies so radical is that they are increasingly accessible and affordable, allowing smaller businesses to compete more effectively and efficiently with larger companies. For example, robots and 3D printing could power new manufacturing models, where small shops do short runs of bespoke products like machine spares for customers.
Look at the cloud, one of the foundational technologies of the digital era. In the past, if you ran a small factory, you may have found it prohibitively expensive to implement an enterprise resource
planning (ERP) system. With cloud-based and software-as-a-service business software, this technology has become much more accessible.
No longer do you need to run a data centre of your own, find capital for hardware and software or run an in-house IT department – most of the complexity is taken care of by the vendor and you can pay on a subscription basis. Suddenly, a small business can streamline processes and gain much better visibility into production and performance.
Less drudgery, more productivity
The new industrial revolution – again, like the three before it -will also free humans from a lot of tedious manual work. For example, AI-powered chatbots on a website will be able to handle many common customer queries and requests. That frees people to focus on problem solving, strategy and relationships – and it also lets a small business improve its service game without needing a massive call centre.
This all means that the fourth industrial revolution will hold many great opportunities for innovative Small & Medium Businesses. The business owners and managers who thrive in the next wave of change will be those who are getting ready for a vastly different world.
Business owners will need to keep up to date with new developments, retraining employees and motivating them and encouraging them through the uncertainty that always comes with change. Customer behaviour, supply chains and more will change in unpredictable ways.
The road ahead will be exciting and challenging. We are only at the start of the massive transformation that digital technology will bring to the world.
This column was written by Nikki Summers, the Regional Director for Sage in East Africa.