EY talks of things to know about the Fourth Industrial Revolution

• The Fourth Industrial Revolution has been getting a lot of press. What does it really mean, and how will it affect us?

Like the three that preceded it, the Fourth Industrial Revolution will mark a significant change in the way we work. Made possible by the emergence of digital systems, networked communications, machine learning and large-scale data analysis, it refers to the increasing integration of these technologies into business and production processes in order to make them self-sustaining and more efficient.

Stepping beyond the 1960s revolution of automisation and computerisation, this latest shift will see systems that blend web connectivity and digital controls with real-world tools. Embedded sensors that collect and transmit data will become ubiquitous, in everything from manufacturing hardware to wearables, permitting “smart” adjustments that enhance use and drive further improvements. This could apply to everything from industrial production to household management, to healthcare.

The Fourth Industrial Revolution encompasses the Internet of Things, but goes beyond simple device connectivity toward being an Internet of Everything. At its core is the combination of big data, analytics and physical technology. The aim is to provide increasingly enhanced, customised offerings to help meet the needs of individuals and organisations that can adapt and evolve to changing situations and requirements over time.

What might the impact be?

“There is great promise for good in this Fourth Industrial Revolution,” says Arjuna Herath, Advisory Leader, EY Sri Lanka. “The exciting potential for breakthroughs in healthcare, the ability to empower more people worldwide to become entrepreneurs or access education and the chance to drive innovation across many sectors are some of the welcome prospects.”

“All of this is disrupting every industry; is reshaping how we work, relate, communicate and learn; and reinventing institutions from education to transportation,” he says.

The sheer volume of data that new web-connected systems will have available, combined with their ability to self-enhance through increasingly sophisticated artificial intelligence, could fundamentally change how society operates by developing previously unthinkable responses — sometimes to problems we didn’t even know existed.

As a result, the revolution will bring new opportunities for people and machines to collaborate across geographies to improve lives, and even to help undo the damage to the world that resulted from the previous three industrial revolutions.

What could hold back this latest revolution?

With artificial intelligence still in its infancy and data analytics still highly dependent on human oversight, we are still some way away from truly autonomous, self-optimising systems. What’s more, this is a continually-evolving area, with no agreed standards when it comes to data formats or coding protocols. Getting different systems to effectively communicate to drive efficiencies is an issue.

Cybersecurity in a highly developed network that blends the online and the physical world is a significant concern and presents a difficult challenge. We’ve already seen examples of real-world damage being caused by cyber attacks that have targeted connected systems, and this is likely to become a bigger problem as more physical systems become networked.

But the challenges are not just technological. At the heart of this revolution lies the free flow of data. This leads to concerns around privacy, which will require regulatory recommendations — to protect businesses’ intellectual property in a globally networked system, to protect individual customers’ sensitive personal information and to confirm that self-optimizing systems don’t run out of control.

Fears about artificial intelligence are also likely to lead to new laws requiring human oversight to counter ethical concerns about automated decision-making. This could lead to legal restrictions on the autonomy of connected systems to prevent computers from taking significant decisions. This, in turn, could lessen the revolution’s potential to drive significant change.

“The challenge for government, business and society is to find new ways of thinking and acting as our world is disrupted by technology and innovation,” says Herath. “The answers won’t be found in the past, and in a fast moving environment some risk-taking will be required to manage the unknown.”

How should we prepare?

The key step is to be aware that this revolution coming, and it may arrive quicker than we think. Organisations should look to invest in their data analysis capabilities and technical infrastructure now to be fully prepared. If your organisation is not already moving to become a smart connected business, it needs to — or risk becoming one of those that gets overtaken by the rise of the Fourth Industrial Revolution.