The Fourth Industrial Revolution

Running a successful business has always meant being the vanguard of change.

Globalization and digitalization have led to an acceleration of that change, meaning that companies must adapt more rapidly to transformation processes. Asia wants to be ahead in the race towards the industry of tomorrow.

Beijing is working on its ‘Made in China 2025’ plan, and Japan has launched its ‘Robot Revolution’. More countries are bound to follow with their own names and initiatives for what is essentially the same grand project: the digital transformation of industry.

Entrepreneurs and politicians around the world share the same sense of urgency that the global economy is on the brink of a fourth industrial revolution. Following the inventions of the steam engine, electricity, and information technology, the manufacturing sector is expected to benefit from another historic boost for efficiency and cost effectiveness.

In the smart factory of tomorrow, objects will constantly be fed with digital information. Virtual and physical systems will be integrated into a unified smart network, allowing automated manufacturing with self-regulating systems to become a reality. Consumers, in turn, will be able to profit from the advent of smart and individualized products.

It holds true for all revolutions that it is better to shape them, rather than be shaped by them. First movers are at a clear advantage, as it is their standards and technologies that will set the benchmark for latecomers. This will lead to global competition for the top spot, which in turn will set free creative forces. But these forces can and should be joined across national boundaries; particularly in light of cross-border production processes and value chains. This is especially important for the Philippines.

While Silicon Valley is still very much perceived as being the global trendsetter in matters innovation related, it is important to note that US-based firms are particularly strong in data-based services while Europe and Asia enjoy a shared strength in data-based manufacturing. Pooling these strengths could challenge American domination in the field of digital innovation, especially when looking at the Trump Administration’s early decisions.

The path towards the future of production is not without obstacles. The transformation of production processes will change the role of the human workforce. Flexibility and willingness to learn throughout the course of a working life are vital skills as machines and data continue to develop; meaning that people are needed who can read, handle, improve and communicate with them. The digital infrastructure to support these systems needs to be expanded rapidly so that data can flow securely and without impediment. International standards and regulations must be harmonized.

These challenges are best solved in a cooperative spirit of mutual learning. Asia can lead the way.