Fourth industrial revolution set to transform the way we live

Lightning-speed progress in artificial intelligence (AI), robotics, the Internet of Things and other technologies means that the way we live our day-to-day lives is set to change irrevocably over the coming decade.

But what does the transformative change of industry 4.0 mean for workplaces, when it is predicted that by 2025 nearly a third of the most important skill sets will be comprised of technology skills? AI will restructure large sections of our economy and society in the coming years, but businesses that fail to adapt to this new reality could be left behind.

The recently published UN Industrial Development Report (UNIDO) 2022 found that industrial capabilities and digitalisation had supported countries’ resilience during the pandemic. “Digitally advanced firms — that is, those using the latest vintages of digital technologies in their production process — were better able to weather the pandemic’s impact on sales, profits and employment,” the report stated.

“Right now, the connection of physical and digital environments, technological progress and increased volumes in computing power and data underpin a revolution that follows earlier industrial changes ushered in by computing, electrical power and steam power,” says Erik O’Donovan, Ibec’s head of digital economy policy. Studies indicate that the pandemic has accelerated this digital transformation, he adds.

According to O’Donovan, policymakers and the business community share the ambition to harness further digital and data innovation in enhancing economic and societal benefits. He cites the recent publication of a new overarching National Digital Strategy (NDS) to complement the European Union’s 2030 digital targets and other national strategies on AI and Industry 4.0.

The scope for transformation is huge: digital and data innovation offer opportunities to enhance productivity, enable businesses to develop and access new markets more quickly, and reduce transaction and information costs, O’Donovan says. “The European Commission has estimated that digitalisation of manufacturing could add €110 billion per year to Europe’s industry base,” he notes.

Despite global competition for digital leadership, Ireland is well placed to harness this potential, he adds. “Ireland is already home to high-performing sectors that intensively use digital tools and data, not just in direct ICT production and services, but in life sciences, financial and professional services, and advanced manufacturing, employing over 240,000 people.”

Underpinning this, however, is the need to ensure that businesses and individuals are enabled and empowered to access and realise further digital opportunities. “In this context, we need to ensure public policy planning and implementation enables the skills, infrastructure, innovation and cybersecurity and resilience capacities necessary to maximise the potential benefits of further digital adoption and innovation and mitigate any potential challenges across the economy,” O’Donovan warns.

Businesses are ambitious in this area — a recent Ibec survey indicated that almost nine out of 10 Irish chief executives surveyed feel that being prepared for technological change is a key priority in their role.

Yet, Denis Hannigan, applied intelligence lead for Accenture in Ireland, believes that many organisations are only scratching the surface when it comes to their own investments in transformation of their systems and the opportunity to make the most out of the full potential of AI. A recent report by Accenture found that only 12 per cent of firms have advanced their AI maturity enough to achieve superior growth and business transformation. On the flipside, nearly 75 per cent of the world’s largest organisations have integrated AI into their business strategies. “The expectation is that AI driven transformation will happen much faster than digital transformation did — on average, 16 months faster,” Hannigan says.

Ultimately, AI maturity comes down to mastering a set of key capabilities — not only in data and AI, but across organisational strategy, talent and culture. “From an Irish perspective, many organisations are ramping up investment in ‘foundational’ AI capabilities like cloud platforms, data architecture and governance,” Hannigan notes. “And while some are progressing ‘differentiation’ AI capabilities like AI strategy and a culture of innovation, few are demonstrating mastery in both areas at this point in time, reflecting their European counterparts.”

According to Stephen Wilson Downey, chief executive and co-founder of Speire, it is larger enterprises that are embracing Industry 4.0 most wholeheartedly. “They are adapting very rapidly and capitalising on the technology much sooner,” he says.

The manufacturing space has been at the forefront, particularly areas such as pharmaceuticals, which rely on stringent processes and procedures, notes Wilson Downey.

“Some drug mixtures and compounds need to be synthesised at the right temperature at the right time and reducing the level of error around that and making it extremely efficient has always been of huge interest so they are adopting this technology at a very quick pace.” The automotive industry is also ahead of the curve in terms of utilisation of robotic process automation and computer vision, the latter allowing for close inspection of every detail during production, he adds.

It is SMEs, however, that comprise most of the Irish economy and the UNIDO report highlighted that SMEs tend to lag behind their peers when it comes to digitalisation.

These smaller organisations must be supported financially if they are to garner the full benefits of Industry 4.0, Wilson Downey says.

“Many of these businesses are still dealing with the fallout from the pandemic and have had to find new ways of creating value in this changing world,” he says. “They are going to be forced to keep on that trend but they are not techies and will need support in terms of learning what’s out there and what can be done.” He cites the “digitalisation voucher” recently offered by Enterprise Ireland, essentially a grant for businesses seeking digital strategy, technical and/or advisory services, as a positive step in helping smaller companies in their digital maturation. “These supports are a really good place for small businesses to begin and get on that curve,” he says.

Speire works with a number of business leaders who are keen to embrace the potential of AI and other technologies but confused by what it all means. “Our approach is always to make it as simple as possible for our customer to understand and as jargon-free as possible,” says Wilson Downey. “Many are really surprised at how straightforward it can be to get a custom AI model built and integrated into their business.”

Ireland, with its technically proficient workforce, has “a huge opportunity” to become global leaders in this area, Wilson Downey says. “We are already in the revolution, everyone just needs to embrace it.”