“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.” The fact that no progress can take place without change was already recognized by the British naturalist, Charles Darwin. 150 years after the first industrial revolution, the economy is once again facing a turning point.
Machines that work independently, communicate with one another and intelligently network – the more or less complete digitalization of value chains will shape the future of business and administration.
Devices will be capable of independently operating production steps and “thinking”. Required parts can after be ordered automatically and connected suppliers are notified. Each included device knows exactly which individual requirements the customer has stated and even reports possible delays. These technologies are already being tested and, in some cases, even used successfully.
The impact of Industry 4.0 on the future of companies
The forecast value creation potential of innovative technologies for further automation of the industry could reach 23 billion euro by 2025 in machine and plant construction sector alone. This was the result of a research conducted by Fraunhofer IAO (institute for industrial engineering) and BITKOM (German association for information technology, telecommunications and new media).
In order to withstand rising, global competitive pressure, companies in Germany will have to design their production processes to be less expensive and, above all, more flexible. However, moving ahead with Industry 4.0 requires the right framework conditions. Specifically, this means that fast data lines and technologies such as cloud computing, embedded systems, big data or additional software technologies for data analysis and information processing must be provided. “The list of new technologies with a long-term influence on companies and markets is getting longer and longer. But this is now about more than just technologies and IT. It is about digital business transformation. We see this as the accelerated change caused by digitalization and internet of the fundamental components of every company, including their strategies, business models, structures, work processes and cultures”, says Klaus Reinke Chief of Corporate Strategy & Organization, Vice President Digital Business in the Dexperty Management Report of the Digital Transformation study. In addition to the sufficient expertise, implementation of Industry 4.0 concepts requires a tremendous willingness to invest.
Knowledge Work 4.0 – computers, machines and robots as colleagues
More than a third of the knowledge workers in the United States, United Kingdom or Germany expect their current position to no longer exist in five years and for parts of their current tasks to be taken over by machines. This is one of the findings of research carried out by the communications company Unify. Sooner or later, robots will even increasingly be employed for manual activities. The Deutsche Post DHL Group, for example, is already testing robot technology and estimates that the use of robots will become a more natural part of the supply chain.
It is not yet possible to determine what effect this will have on workers or employment in general. It is clear, however, that good employee training and expertise is becoming an increasingly important factor. Experts expect that, despite increasing automation, employees will continue to be needed in all areas of companies, but their fields of work will change radically. Simple, repetitive work will probably be carried out mechanically to a large extent in industrial production and logistics, but also in administrative processes and knowledge work. Many information and service systems are already partially automated and computers are increasingly writing text autonomously, such as news, which – according to a report in Journalism magazine – sometimes even have a more believable effect.
New technical possibilities will not only change the way people work, but also the way they are employed: 21 percent of the surveyed knowledge workers are already working on a freelance or subcontractor basis today. If given the option, fifty percent of those asked would prefer a freelance or on-demand job over regular employment. The number of freelancers is expected to continue to grow.
According to an IAB study, those workers most likely to gain from Industry 4.0 and digitalization will be knowledge workers such as trained IT specialists, engineers and natural scientists.
Opportunities and risks of digital transformation
According to the Dexperty Management Report “Digital Business Transformation”, 60 percent of the respondents (in all industries and company sizes) see “new business opportunities” as the main driver of Digital Business Transformation”. Medium-sized and large companies equally rated (60 percent) technological change as the driving force of digital transformation in their own companies. Whether voluntarily or not, companies will have to rethink and invest heavily in know-how and technical equipment.
Despite all productivity gains and quality improvements, increasing digitalization also gives rise to critical new issues. Security issues are dominating the discourse in this regard. Globally networked systems are more vulnerable to targeted cyberattacks, industrial espionage or event just system failure with a negative impact on revenues. Comprehensive security concepts are an essential component of the design and installation process.
A secondary aspect of digitalization which should not be underestimated is the so-called “transparent employee” and the associated monitoring and controlling of work processes. Ever-present networking basically provides the possibility to fully monitor employees, their way of working and their activities. To avoid uncertainty and maintain loyalty, companies must develop strategies for a healthy balance between security, privacy and trust in their employees. Especially with regard to the increasing number of mobile employees without fixed workplaces, this aspect is playing an increasingly important role.
However, dissatisfaction and insecurity are also arising in other regards. Whereas two-thirds of the employees have a positive view of this development, one-third of the workers feel overwhelmed by the Working Environment 4.0. This is one of the results of a survey conducted by TNS Infratest on behalf of Deutsche Bank. Although many employees make efforts – such as participating in courses – to keep pace with today’s working environment, the required understanding of the technology is often still lacking. Despite qualification and further education, older employees have a particularly hard time following the younger generation of “digital natives”. On the long term, they are being pushed out of the job market.
For more information on Work 4.0. have a look at the articles Workplace 4.0 – what form will it take, Working Environment 4.0 in marketing / HR departments or the article “The office of the future” in the Top Fair magazine.