(Observations from the 45th World Economic Forum)
"The only thing constant in the universe is change."
While this is a phrase most notably used in physics, I would argue that it just as accurately describes the reality of our business and marketing landscape.
As we embark on what’s being considered the fourth industrial revolution, the prescription is clear: don’t just brace for change, embrace it. This shift is expected to bring so much change that even Professor Klaus Schwab (WEF Founder and Executive Chairman) stated in an article he wrote explaining the Fourth Industrial revolution, “business leaders and senior executives need to understand their changing environment, challenge the assumptions of their operating teams, and relentlessly and continuously innovate.”
Perhaps before we go into the Fourth Industrial Revolution and its implications on business and humanity as a whole, we should take a step back to look at the changes the previous industrial revolutions brought:
- The first industrial revolution occurred around 1784 and used steam, water and mechanical production equipment to drastically improve and increase the use of machines for productivity and manufacturing.
- The second industrial revolution occurred around 1870 and used electricity to further increase mass production, resulting in the shift to a division of labor.
- The third industrial revolution occurred around 1969 and integrated electronics and information technology (IT) to automate production.
- The fourth industrial revolution is a further evolution of the third, which began at the transition of the new millennium and is characterized by the increasing fusion of our physical, digital and biological worlds.
And while some are scared of technology itself, especially the idea of fusing it directly into our daily lives and possibly even our biology, many people are more terrified of the change it represents.
Humans vs Machines?
Erik Brynjolfsson (Director of the MIT Initiative for the Digital Economy) commented on this fear at the WEF, stating that “the biggest misconception I’ve heard here at Davos, and recently, is this idea that technology is going to come for all of our jobs and there’s nothing we can do about it.”
This fear is most evident in those whose industries have been affected by the disruptive nature of technology within their established business models. “Black Tuesday” earlier this week in Paris is a prime example. Taxi drivers blocked roads and set fires to protest the disruption to their industry by new entrants enabled by technology.
Of course, nobody likes to have their livelihood threatened, but the reality is that evolution is inevitable, and more importantly the advent of the fourth industrial revolution and digital technology will greatly enhance our lives overall at a societal level. Sure, there will be growing pains, but ultimately the consumer will win in virtually every aspect, from saving money, thanks to more efficient supply chain management and production schedules, to enjoying highly-customized and more relevant user experiences across more products, services and devices.
Lean management taught us to remove the waste (muda) from our processes and organizations, and the digital synchronization of virtually every piece of machinery, from warehouse equipment to the refrigerator in your home, is allowing us to track, remove, and efficiently refine those aspects of waste that have been occurring in both our industries and personal lives.
The Human Touch
In addition to the technological and innovative side of the fourth industrial revolution and exponential technological advances, the WEF also focused on the human factor, most notably its impact on jobs, society and culture.
Canadian Prime Minister Justin Trudeau delivered a speech in which he stated “we don’t want technology simply because it’s dazzling. We want it, create it, and support it because it improves people’s lives.”
And to that effect, will the fourth industrial revolution be a net gain or loss to society and humanity in general? That all lies in the eye of the beholder. A forum report released at the meeting predicted that by 2020, 5 million jobs will be lost as a result of technological changes.
The driverless car seems to be an emerging technology that many of the biggest brains and brands have their attention focused on, but what will be the unintended consequences?
For we business leaders it seems to be an astounding leap forward, increased efficiency in our shipping times, reduced costs and less need for risk mitigation. But what about the truck driver who is replaced by a driverless vehicle? Or do we look at the increased efficiency and growth potential as an opportunity to create different jobs, or more jobs in different arenas?
Again, evolution is inevitable. It’s what we do with it that really matters.
A Marketer’s Dream
For marketers, the digital and informational impact of the fourth industrial revolution is limitless.
Rather than the old world tactic of putting faith in small focus groups to accurately represent the sentiments of the larger population (which they never truly do based on the law of large numbers), technology is emerging that enables us to gather information directly from the consumers themselves. Want to know what each individual consumer truly wants, likes and, most importantly, purchases? That crystal ball is at our fingertips.
But the other side of that same coin will be the ability for nearly every consumer to have a customized experience with their goods and services catered specifically to their needs and desires. This luxury once reserved for an elite few will be accessible to increasingly more individuals on the socioeconomic spectrum, and will likely be one day be available to all.
In the end, we know that it’s poor business practice to stand in the way of progress. There are countless business school case studies depicting the fall of once mighty blue-chip corporations who thought themselves too essential in their customers’ lives to need to innovate or evolve.
Maybe they thought the “poorly-positioned” new entrant to their industry was nothing to worry about, or were simply too set in their ways to invest in innovative technologies or to rethink corporate culture philosophies. Whatever their motivation, they are the focus of case studies for this reason: refusing to adapt to evolving technologies and cultural shifts never ends well for a company.
If the 45th World Economic Forum taught me anything, it’s this: the fourth industrial revolution is here, and it’s our job as the business leaders now to increase our output of innovation and thought leadership for the betterment of our future.
What we choose to do with these newfound technological advances is up to us, but we all share the same responsibility: to use them wisely and make the best choices, not only for our bottom lines but also for the good of our fellow global citizens. After all, no revolution happens without the people.