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Virtually every conceivable industry is being impacted by the disruptive power of technology, which has been quietly ushering in the fourth industrial revolution across the globe.

In fact, business executives have been sitting up and taking notice of the mass changes as they look for ways to develop new strategies to take advantage of the opportunities that arise from the emergence of Industry 4.0.

What this major change means for the future of businesses in emerging technologies is clear: there has never been a better time to upskill with the relevant skills to meet the challenges of Industry 4.0 head-on.

What is Industry 4.0?

You may have heard of the phrase Industry 4.0, but not many know what it is. But lean in and take a look at what’s behind Industry 4.0. and you’ll see that it has the ability to change the status quo in the world of business in significant ways.

As Wikipedia explains, Industry 4.0 is the name given to the current trend of automation and data exchange in manufacturing technologies. It includes cyber-physical systems, the internet of things, cloud computing and cognitive computing. Industry 4.0 is commonly referred to as the fourth industrial revolution.

Why Industry 4.0 matters in the world of business

Industry 4.0 is the most significant disruption to advanced manufacturing in half a century, according to a lengthy report by the Federal Government's Industry 4.0 Taskforce. 

It’s no coincidence that Australian industry groups strongly support the update of Industry 4.0 strategies and practices, the report says.

“The promise of fast, flexible, high quality and efficient production will be realised as the true power of Industry is unleashed, it reads.

Three forces are shaping this digital future, the government report says:

Acceleration: Exponential advances accelerate so quickly that they’re difficult to fully comprehend; advances in digital technology in the next 18 months to two years will be equivalent to total advances made since the very beginning of the computer age.

Convergence: Data will become ubiquitous as everything is digitised. Clever software is breaking down barriers converging industries such as information, communication and entertainment.

Individualisation: The digital identity created online includes what we like, who we follow and communicate with, where we click and post and how we buy, all of which is increasingly allowing each of us to be distinguished as an individual.

What is shaping Industry 4.0? 

Defined as the next phase in the digitisation of the manufacturing sector in Australia, Industry 4.0 is being driven by four disruptions that have culminated and are bringing about change:

According to research firm McKinsey, these are:

  • The rise in data volumes, computational power and connectivity, especially new low-power networks.
  • The emergence of analytics and business intelligence capabilities.
  • New forms of human-machine interaction, such as touch interfaces and augmented reality systems, and;
  • Improvements in transferring digital instructions to the physical world, such as advanced robotics and 3D printing.

While most of these digital technologies have been taking hold for some time, some aren’t yet capable of being scaled up to transform manufacturing processes. However, many are now at a point where their greater reliability and lower cost are starting to make sense for industrial applications.

However, McKinsey points out, these changes will be far-reaching and will impact every corner of the factory and supply chain. In fact, executives surveyed by McKinsey estimate that up to 50 per cent of today’s machines will need upgrading or to be replaced altogether. This is the fourth major upheaval in modern manufacturing, following the lean revolution of the 1970s, the outsourcing phenomenon of the 1990s and the automation that took hold in the 2000s.

What will be the impact on business?

It’s crucial that businesses and industry prepare for both the opportunities and challenges presented by Industry 4.0.

These new technologies have the potential to significantly increase Australia’s economic competitiveness, with automation alone set to provide a $2.2 trillion boost to our national income between 2015 and 2030 productivity gains, government figures show.

After all, technological innovations will enable businesses to make better use of human effort as machines take over mundane tasks so that employees can focus on skills unique to humans such as critical thinking, creativity and emotional intelligence. This, in turn, opens up new opportunities for businesses to improve and optimise their operations.

How businesses can prepare: 

The best way for Australians to continue to punch above its weight in business is to stay ahead of the digital curve by making sure their skills are up to speed. To do this, the Australian Industry Group recommends that businesses identify where automation could transform their organisation and plan the migration through a digital strategy. Next, businesses should review the organisational changes needed as automation upends entire business processes.

Businesses should link in with local universities, vocational education and training providers to shape the skills you need and inject fresh ideas into the business, Ai Group adds. Reskilling your workforce to adapt to requirements of the digital economy is paramount, the peak industry body adds.

Some of the most crucial skills that will be needed to face the Industry 4.0 revolution include:

Virtual collaboration: The ability to effectively collaborate between virtual team members via technology.

Cognitive load management: The ability to filter information by importance and maximise cognitive functions.

Computational thinking: The ability to translate vast amounts of data into abstract concepts and to understand data-based reasoning.

Design mindset: The ability to represent and develop tasks and to focus on the work process to achieve the desired outcomes.

Social intelligence: The ability to convey concepts to others deeply and directly and be able to sense and stimulate reactions. 

Adaptive thinking: Demonstrating the proficiency of thinking and coming up with solutions, and the ability to determine the deeper meaning of what’s being expressed.

Businesses wanting to prepare for the future should take a look at RMIT’s redesigned MBA, called Made for a 4.0 World, which offers businesses a one-stop course to gain new skills in preparation for the future.

Learn more about RMIT Online's MBA, made for industry 4.0 -  Get in touch with our Enrolment team on 1300 701 171.