Industry 4.0 — that is how we are now describing the “digital disruption” and the Fourth Industrial Revolution that we are currently witnessing first-hand. Regardless of which industrial stage you wish to examine, each profoundly changed what it meant to be alive. The use of water and steam power changed agrarian societies into urban, industrialized ones. The Second Industrial Revolution saw a rapid expansion of industrialization thanks to the widespread adoption of electricity and new techniques, such as the assembly line. The third revolution saw us become “computerized” and change from “analog” data collection to “digital” processing. What about the fourth? It is often described as a fusion of technologies; a blurring of lines between the physical, digital and biological spheres. Some people describe it as the “Second Machine Age,” due to the blossoming of artificial intelligence (AI), but that would ignore the biological or organic advances also being made. Klaus Schwab, author of “The Fourth Industrial Revolution,” says what we are seeing is different from the preceding revolutions because it is being driven by communication and connectivity, and the term “Industry 4.0” is usually used with direct regard to automation and data exchange in manufacturing and other industries. In a day and age full of buzz words, digital disruption sounds like a hornet’s nest. It frightens some, as the word “disruption” has a negative connotation, but really what it is referencing is how digital technologies can impact the value of products and services in an industry. This is “disruptive” because it makes us re-examine what we are doing and what our marketplace is. It is also making us examine who we are, what our laws are and how we govern, because digital disruption is changing law and governance. A US court in Ohio is already using AI to help judges determine sentencing. Self-driving cars and data privacy are just two of the many issues legal “engineers” are working on now, but no doubt fears that how we determine law and what we consider lawful today may be very, very different from tomorrow. Fear of falling behind will drive states to invest more and more in technology with the hope that every innovation will give them the advantage. This innovation will be driven by talent created by public investment in education as well as research. Jane Valls Digital disruption is changing our geopolitical landscape. Tech-driven economic and military power equals geopolitical power. Fear of falling behind will drive states to invest more and more in technology with the hope that every innovation will give them the advantage. This innovation will be driven by talent created by public investment in education as well as research. An investment culture that also encourages start-ups will also attract foreign-born tech stars to a country because they will feel they have a better opportunity and given a better chance to succeed. But this type of innovation can also be disruptive to society, for it can change the way work is done. What happens to the worker on the assembly line when robots can do the job quicker, more efficiently and at a cost saving? A human investment must be made by society to give workers the opportunity to upgrade their skillset and to stay relevant during the Fourth Industrial Revolution. So what should a company’s board of executives do in the face of such uncertainty, where the marketplace and landscape can change so rapidly that you are not sure who your competitors may be from one moment to the next? Organizations must be pragmatic: Invest in innovation and education, and create new business models. Embrace the change and you will eventually change how your organization does business, but in a way that is almost organic in how it occurs. This goes beyond having a “digital strategy” and embracing new ways to look at return on investment by discarding certain traditional approaches. Innovation can come from areas other than the research and development department. Give your departments some freedom to all be innovators. Seek partnerships. Obviously this can lead to acquisitions but, by working with outside partners, both groups can offset costs and each bring to the table a unique set of skills. Many companies have collected mountains of data they do nothing with. Use of modern data analytics will make these mountains important referencing and marketing tools, which are currently being under-utilized. The fact is this: The tipping point for companies to decide how and when to embrace digital disruption is here. Some say it has already passed and those not already on board may not be able to catch up. Researchers say that, by 2020, you can expect 75 percent of businesses to be digital. Estimates put the “internet of things” as a market opportunity representing $11 trillion; others put that number at $19 trillion. There is no stopping it. Ignore it at your own risk. Jane Valls is Executive Director of the GCC Board of Directors Institute. Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News" point-of-view
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