Understand the Impact of the Fourth Industrial Revolution on Business
After completing this module, you’ll be able to:
- Explain how customer expectations are shifting in response to the Fourth Industrial Revolution.
- Describe how the Fourth Industrial Revolution is transforming businesses.
In Technologies and Trends of the Fourth Industrial Revolution, you learned about the 10 technologies behind the Fourth Industrial Revolution. If those 10 technologies are the cause, then this module explains the effect.
One of the main effects of the Fourth Industrial Revolution is increased human productivity. With technologies like AI and automation augmenting our professional lives, we’re able to make smart choices, faster than ever before.
But it’s not all rosy, and we’re not trying to sugarcoat things for you. There are some hefty moral and ethical implications for many of these innovations, and in some cases, we’re left with more questions than answers.
In this module, we talk about the impact of the Fourth Industrial Revolution, including the positive and the potentially negative.
Customers today expect to get an answer anytime, on any channel they choose. Whether they tweet, email, chat, or call, they want instant, personalized service.
So how did they come to expect that?
Well, the technologies around us have evolved, bringing customer expectations with them. Think about it—just 20 years ago, companies like Google, Alibaba, Facebook, Twitter, YouTube, Uber, Airbnb, Salesforce, Snapchat, Instagram, Fitbit, Spotify, and WeChat did not exist. Make no mistake about it, the services these companies provide have raised the bar for the customer experience. How can you expect a customer to wait on hold when they’re used to the speed of interaction on social media? Or when the answer to any question is one Google search away?
And let’s not forget the millennial generation. They grew up on digital technology, and they now make up more than half the workforce. As consumers, they expect businesses to anticipate their needs and provide personalized support.
Customers, whether as individuals (B2C) or businesses (B2B), are increasingly at the center of what’s known as the digital economy, which is a fancy way of saying the economy that’s built on Internet-based and digital technologies. To be successful, businesses need to shift from a transactional model, focused solely on selling products, to a relationship model, built around selling services and creating deeper connections with customers.
Every day, billions of people are sharing online. They’re posting images, videos, and tweets. They’re sending text messages. They’re liking other people’s updates.
How are they doing this sharing? They’re using connected devices. And billions of people sharing translates to billions of devices with embedded sensors, sending trillions of real-time signals to the cloud. Things like GPS coordinates, environmental data, clickstreams, and health status.
The result? Data. Lots and lots of data.
All of this data is like food for artificial intelligence. AI is driving innovation across growing numbers of products and services, and the more data you have, the better the predictions get.
Machine learning algorithms can analyze these billions of transactions and variables to make businesses smarter. They can help businesses anticipate trends in consumer demands, personalize promotions for individual customers, and optimize pricing.
Here are a few examples of machine learning innovations, organized by industry:
- Retail: Highlight consumer sentiments toward a brand or predict which customers are mostly likely to purchase a particular product.
- Manufacturing: Optimize supply chain operations and predict the failure of machine parts.
- Travel: Plan vacations with the acumen of a human assistant.
- Medicine: Assist doctors in identifying different types of cancer cells and spotting intracranial abnormalities in real time.
Let’s dive in deeper, industry by industry, to help you understand how the new technologies of the Fourth Industrial Revolution are shaping the economy.
In today’s times, do you need to own a car? Or can you simply share one?
Car-sharing services work across multiple industries—transportation, technology, insurance, finance—to provide a seamless customer experience from request to payment. In the process, they are disrupting the notion of car ownership.
What if you just need a ride? Services like Uber and Lyft have disrupted the transportation industry. With one of these services, you can use your phone to:
- Order a car to take you to a specific destination
- Track the vehicle as it heads your way
- Get information about the vehicle, driver, and price of the trip
- Pay for the ride and optionally, add a tip and feedback for the driver
Or if you want to own a car, why not own it instead as a service, so you don’t have access to just one car, but a whole fleet based on your needs? Need a coupe for the weekend? Change your car needs in the app, and Audi swaps it out for you. Car companies are looking hard at these models now.
Advances in artificial intelligence, the Internet of things, clean energy, and other technologies can improve safety for drivers and pedestrians and potentially lead to greater use of public transportation and car-sharing services. This shift can result in reduced congestion and pollution, faster and cheaper commutes, and improved health.
In retail, personalization is changing everything. The lines between sales, service, and marketing are blurring as experiences become more one-to-one, powered by artificial intelligence.
Virtual customer service agents can perform day-to-day transactions and make smart recommendations to customers. Machine learning algorithms can analyze billions of signals to route customer service calls to the most appropriate agent.
Using augmented reality devices, such as smart glasses or other wearables, shoppers can look at a product in a store and see relevant data pop up into their field of vision. With virtual reality picking up speed, can it be long before a shopper can virtually try on different outfits and buy the ones they like without ever leaving their bedroom? What kind of impact can a capability like this have on the postal service or on supply chains? What if you were able to 3D print your retail objects, such as clothes or glasses, at your neighborhood shop?
Right now, everything is designed around “shopping then shipping” (you order, and the goods are packaged up and sent to you). But AI and prediction technology is getting so good that soon, Amazon will know what you need before you need it. People are exploring the move to “shipping then shopping.” You receive the goods, and send back what you don’t want.
Financial institutions use artificial intelligence to detect fraud and research equities. They are even using insights from machine learning to manage client relationships. For example, artificial intelligence helps financial advisors predict which prospects are most valuable in the sales cycle, decide next-best actions, and create highly personalized customer journeys based on the financial goals, life events, and other variables specific to each customer.
The banking industry is going through major change. Branches are disappearing, new competition is entering the industry at a rapid pace. What will a bank look like in 10 years? Like Citi today, or Google?
The insurance industry is looking at using data from wearable devices that monitor health, and sensors that track driving habits to determine pricing and encourage safer habits for policyholders. People with better health or driving records pay less for their policies. Sensors in cars can instantly alert drivers to any potential faults with their vehicles and insurance companies to collision damage, allowing them to instantly contact the driver to begin the claims process.
AI-powered machine vision systems can measure crop populations and detect weeds or plant pests, and use robotic sprayers to precisely apply herbicides. Bioengineered plants are leading to greater crop yields and new medicines, such as antimalarial drugs produced from genetically modified tobacco plants.
Precision medicine helps doctors analyze a patient’s genome sequence, medical history, and lifestyle. That information, coupled with demographic data from groups of people with similar conditions, as well as the latest research, help doctors create treatments and prevention therapies unique to an individual.
According to the World Economic Forum Technology Tipping Points and Societal Impact report, the following technology tipping points could occur by 2025:
- 10% of people wearing clothes connected to the Internet
- The first robotic pharmacist in the US
- The first 3D-printed car in production
- 5% of consumer products printed in 3D
- 90% of the population with regular access to the Internet
- Driverless cars equaling 10% of all cars on US roads
- The first transplant of a 3D-printed liver
- Over 50% of Internet traffic to homes for appliances and devices
- The first city with more than 50,000 people and no traffic lights
- The first AI machine on a corporate board of directors
As the Fourth Industrial Revolution unfolds, what innovations are in store?
Advances in computing power, artificial intelligence, robotics, and material science can accelerate the shift toward more environmentally friendly products of all kinds. Digital fabrication techniques, including 3D printing, can bring manufacturing closer to customers and make spare-part maintenance easier and cheaper.
Breakthroughs in biotechnology can allow replacement bones and transplantable organs to be grown from 3D printed patient’s stem cells. As discoveries unfold about human brain functions, we can look toward neural implants and brain-machine interfaces that address cognitive diseases and potentially enhance human intelligence.
New energy technologies can create low-cost, plentiful, and sustainable sources of power—and power storage—to wean the planet off first-industrial-revolution fossil fuels. Robots can handle household chores, assist nurses, and even build themselves.
The scale and breadth of technological innovations is revolutionizing the way we do business. Next, we explore how the Fourth Industrial Revolution can impact individuals and society.
- The Fourth Industrial Revolution is about empowering people, not the rise of the machines
- 5 trends for the future of manufacturing
- Healthcare in 2030: goodbye hospital, hello home-spital
- Navigating the Fourth Industrial Revolution
- Robots have been taking our jobs for 50 years, so why are we worried?