The Fourth Industrial Revolution’s scarcest commodity? Time

There’s no longer much debate on whether the Fourth Industrial Revolution (4IR)—the technological megatrends of connectivity, intelligence, and flexible automation that have upended traditional manufacturing—is here. It is. And that message is getting through: executives from around the globe have told me how their businesses are responding.

But probably not quickly enough. That’s the message from the latest research conducted by The World Economic Forum (WEF), in collaboration with McKinsey & Company, and presented in more detail at the January 2019 World Economic Forum Annual Meeting in Davos.

The new study scanned more than 1,000 leading manufacturers worldwide that are implementing 4IR technologies. Through our work, described in “Fourth Industrial Revolution: Beacons of Technology and Innovation in Manufacturing,” we identified sixteen “lighthouse” sites that have delivered genuine step-changes in manufacturing performance.

They’re in emerging and developed economies, and range from global blue-chip companies to SMEs with fewer than 100 employees. But what they have in common is that they serve as real-world evidence to dispel the myths and misunderstanding that so often block adoption of innovative technology at scale. They have demonstrated how forward-thinking engagement of technology can create a better, cleaner world through new levels of efficiency in manufacturing.

Just 16 in total. What makes lighthouses so rare? They succeed at several differentiators at once:

  • Injectors of human capital—rather than displacing workers with machines, lighthouses are transforming work to make it more interesting, less repetitive, more diversified and more productive. They focus on capability-building through upskilling, which ensures employees learn the basics of new digital use-cases.
  • Resetting benchmarks—they have moved beyond continuous improvement and instead are making a change that resets benchmarks in productivity, agility, and mass personalization.
  • Open innovators and collaborators—they engage a trisector innovation system comprising business, government, and the social sector, including academia.
  • High impact with minimal replacement of equipment—most were created by transforming existing brownfield operations, optimizing existing infrastructure and augmenting it with new machinery.

Consequently, lighthouses have a clear edge over their competitors, which face the same risks as in the first internet revolution: A few disruptors threaten to amass most of the value creation. The report’s analysis suggests that the “smart follower” strategy is not working. Instead, the gap between leaders and followers is widening, with nine out of ten companies already 12 months or more behind these lighthouses.

Global leaders must address the opportunities and threats presented by technology head-on, taking control and building for scale. The choice is to innovate the production system and the end-to-end value chain, or fall behind.

The time to act and reap the rewards of the Fourth Industrial Revolution is now.

An earlier version of this post appeared on Enno de Boer’s LinkedIn profile.

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