The 5th industrial revolution with AI at its core is driving a new wave of digital transformation
When one looks back over 70,000 years of human efficiency enhancement, it is Frederick Taylor’s ‘scientific management’ and Henry Ford’s car production on the assembly line that have become symbols of the industrial revolution. The digital age with its cyber dimension sets new challenges, but also presents new opportunities.
The transition to digitalization and digital transformation was preceded by three industrial revolutions. Each affected the lives of citizens and consumers in terms of education, occupation, health and safety. Some of the changes came very quickly and were extremely serious, for example, people lost their jobs and their lives had to be completely reorganized.
Since the start of the 2000s, we have been part of the fourth industrial revolution. This revolution is characterized by the ‘networking of everything with everything else’. The internet and new information technologies in general are creating a dependency on technology that society has never experienced. Education, employment, health and safety are confronted by the fourth, still young industrial revolution, which brings phenomena to which we often have no answers. Since the 2020s, ongoing advancements in technology (predominantly AI) and societal transformation have triggered the notion of an emerging fifth industrial revolution that will foster the symbiosis between humans and machines/robots.
The fifth industrial revolution (since 2020/2023) is the human-machine symbiosis. It aims to continue to leverage advancements of the fourth industrial revolution with digital transformation at its core, but with an emphasis on an evolving view towards the Industrial Internet of Things (IIoT) by optimizing the collaboration between humans (employees, customers) and machines (digital technology, for instance collaborative robots or cobots), fostering interoperability, implementing ethical artificial intelligence (AI) models (which, in turn, triggered legal and ethical considerations), and focusing on sustainable actions. Sustainability concepts focus on the ecological transformation and include recyclable products, a carbon-neutral industry and the circular economy.
Interoperability refers to the ability to connect various systems and devices so they can work together. This requires a common definition and understanding of open standards including data formats, interfaces and communication protocols. Data and the cloud/computing power (which is an action field of digital transformation from the fourth industrial revolution that was enabled through automation and ICT in the third industrial revolution) and interoperability are enablers of AI. In addition to advancements in technology, further debate and new frameworks will emerge regarding new work, including topics such as reduced working hours, state-sponsored unconditional basic income and well-being. This is sometimes referred to as ‘Society 5.0’, which aims to integrate social issues into digital technology advancements topics and the emerging fifth industrial revolution by achieving a balanced economic development with the resolution of societal and environmental challenges.
With the fourth and fifth industrial revolutions, both challenges and opportunities present themselves to organizations and society, with two examples presented here:
Influence on society
With digitalization, human workers are increasingly replaced by robots. This might be a relief, especially for physically strenuous or monotonous work. Modern software solutions and smart devices also assist in intellectual work, for example with IT-based (and AI driven) assistance systems. These are adaptable to individual abilities and needs and can, for example, enable older people to stay in the workforce longer or introduce inexperienced employees to demanding production processes.
New business ideas and jobs
Keeping up with technological developments will allow the implementation of new business ideas and it also creates new business fields. ICT (and again, AI) enables new forms of collaboration and cooperation and provides access to new marketplaces, but also requires new skills. Organizations once more need to update their business strategies to reflect the opportunities for both digitalization and digital transformation driven by AI applications.
How shall organizations respond to the emerging fifth industrial revolution? First and foremost, organizations should leverage the combined experience and skills of their employees and managers to identify new digital opportunities and update their digital roadmap. In addition, the new CAS program “Digital Acceleration & AI” will provide managers with a toolset to master the transition into the fifth industrial revolution.
Self-Reflection Questions
Strategy questions for the digital age:
- When did you last update your business strategy to reflect advancements in digital technology and AI?
- Did you build a project team or identify an employee who can help your organization to advance in the digital age?
- How can your products and services benefit from potential AI applications?