The 4th Industrial Revolution, Industry 4.0, call it what you will. Even allowing for a healthy dose of cynicism against the inevitable marketing hype, the inescapable truth is that we are on the cusp of a new era in manufacturing, one which is summarised nicely in an opinion piece I read recently by T-Systems’ Michael Frans: “In the smart factory of the fourth industrial era, advanced robotics is combined with sensors, real-time analytics, cloud services, automation, machine learning, mobility, augmented reality, 3D printing, and ubiquitous connectivity, among other technologies.
“It enables plant managers to achieve new levels of efficiency – with optimal resource allocation, and the visibility to not only view operations from multiple perspectives, but also predict events (such as surges in demand or equipment failures for instance). The ultimate goal is to employ these new technologies to reduce the cost per unit of production.”
As Frans points out, though, the changes go deeper than operational optimisation alone, and extend to new business models that are opening up for manufacturers. When it comes to vertical integration, for example, he points out that, “Increased digitisation and integration into the supply chain opens up new strategic possibilities for partnerships, disruption and disintermediation. A manufacturer of glass bottles, for example, could automatically receive orders from customers – via an online ordering portal – and deliver directly. In this way, they vertically integrate downwards and gain greater control over their market.”
Short-run manufacturing and specialisation also benefit, as Frans writes: “Whereas traditional manufacturing is only viable at scale, new innovations like 3D printing have made it possible for manufacturers to move into smaller, niche fields, where quantities are far smaller. With the ability to produce a far greater range of products, manufacturers can create specialised, custom goods, down to an audience of one.”
As for big data services, “General Electric is touted as a great case study of a traditional industrial giant that has created new streams of services-based revenue. Its aviation department not only makes the hardware components for airplanes, but a host of data-gathering software as well. It now provides complete flight management systems for planes like the Boeing 737. Manufacturers in every field can create new business models, layered on top of the physical goods they produce,” he explains.
AIs want our jobs
Artificial intelligence (AI) is a nebulous concept describing a machine capable of simulating human thought. The greatest ambition of an AI is to pass the Turing test, developed by Alan Turing in 1950, which evaluates a machine’s ability to exhibit intelligent behaviour equivalent to, or indistinguishable from, that of a human.
Google is positioning itself at the forefront of AI development, having recently unveiled what it calls a Tensor Processing Unit (TPU), a custom ASIC built specifically for machine learning. The company has been running TPUs inside its data centres for more than a year, and claims they deliver optimised performance an order of magnitude better per Watt for machine learning. This is roughly equivalent to fast-forwarding technology about seven years into the future (three generations of Moore’s Law).
Paul Dunne, CEO and Founder of Digital Skills Academy, paints a picture of both a cloud and a silver lining when it comes to the rise of AI. He cites a study by research firm Gartner which predicts that by 2018, 20% of business content will be authored by machines, more than 3 million workers globally will be supervised by a ‘robo-boss’ and 45% of the fastest-growing companies will have fewer employees than instances of smart machines. By 2020, autonomous software agents outside of human control will participate in 5% of all economic transactions and smart agents will facilitate 40% of mobile interactions. In this algorithmic and smart machine-driven world, people and machines must define harmonious relationships, says Gartner.
While AI presents opportunities for business, Dunne points out that it also brings with it a very real threat to traditional jobs. Prominent thinkers, including Bill Gates and Stephen Hawking, have highlighted concerns over the wisdom of placing too much emphasis on
AI-based cognitive technologies, in particular the threat they pose to long-term job security.
Professor Thomas Hayes Davenport from the MIT Centre for Digital Business and author of ‘Only Humans Need Apply: Winners and Losers in the Age of Smart Machines’, says anyone who is prepared to consider technology more as a colleague than a competitor, has a far greater chance of survival in the digital age.
Davenport believes the trend towards automation will happen quite slowly and so any job losses caused by the current wave of technological advancement will happen over the next decade or so. “The kinds of cognitive technologies currently in existence can only replace tasks, not entire jobs,” he stresses. Anyone with an appetite for learning should not fear the ramifications of life in the digital age, he says. Those willing to embrace technology through further education will thrive in the age of AI robotics.
In other words, if you can’t beat them, join them.
Brett van den Bosch, Editor.
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