Executives aren’t prepared for Industry 4.0 revolution

Business executives and government agency leaders don’t feel ready for the coming fourth industrial revolution (Industry 4.0), says global accounting and consulting firm Deloitte.

Industry 4.0 is characterised by the integration of physical and digital technologies, like analytics, artificial intelligence, cognitive computing and the Internet of Things.

Leaders are not confident their organisations are ready to harness the benefits of these technologies, according to a Deloitte study that surveyed 1,600 C-level executives across 19 countries and conducted a series of in-person interviews.

“The rapidly advancing technologies driving Industry 4.0 are bringing about social and economic change rapidly in an environment of unparalleled global connectivity and demographic change,” said Punit Renjen, Deloitte global chief executive.

The survey said executives understand what Industry 4.0 entails, but are less certain of how they should act to benefit from those changes.

Executives see a more stable future with less inequality, but are not as confident about the roles they or their organisations can play in influencing society in an Industry 4.0 era.

Close to 90% say Industry 4.0 will lead to more social and economic equality and stability.

Moreover, close to two out of three say business will have much more influence than governments and other entities in shaping this future.

However, less than a quarter thinks their own organisations can influence things like education, sustainability and social mobility.

While business leaders acknowledge they may not be ready for the technological changes to come, few have altered their strategies.

Just 14% are highly confident their organisations are ready to fully harness the changes associated with Industry 4.0.

However, most executives are still focusing on developing products and increasing productivity, instead of developing talent and driving disruption that could spur innovation and create value.

Most executives say they don’t have the right talent to be successful in Industry 4.0, but insist they are doing all they can to build the right workforce, even as talent ranks low on their priority list.

Only one-fourth are highly confident they have the right workforce composition and the skill sets needed for the future.

However, 86% say they are doing everything they can to create a workforce for Industry 4.0.

Companies that have set Industry 4.0 talent implications high on their list are exploring roles that allow people to leverage technology for greater innovation, alternative work environments, and new approaches to learning and development.

Executives have a hard time making the business case to fully address Industry 4.0 opportunities because of a lack of internal strategic alignment as well as a shortterm focus.

In order to harness the full potential of Industry 4.0, executives around the world should accept that every organisation has the power to influence the promise of Industry 4.0 to create a more equitable and stable world.

They should take a holistic approach to strategic planning, exploring how core capabilities can be enhanced by new ones to develop new products and services, and create new value for a broader range of stakeholders, Deloitte said.

At the same time, they should make it a priority to prepare workers to navigate the age of Industry 4.0 by creating a culture of learning and collaboration as well as training opportunities.

Technology will be the most powerful differentiator in an Industry 4.0 world and it should be integrated across the organisation to better support the spectrum of responsibilities and stakeholders necessary to thrive in such an environment.

“I believe those who take a broad view will be the ones to succeed in this new era,” Mr Renjen said.