The real deal: What will Industry 4.0 bring? | KPMG | TT

The real deal: What will Industry 4.0 bring?

The real deal: What will Industry 4.0 bring?

The United Kingdom voted for Brexit and the refugee crisis is unrelenting. In this unstable political climate we took a look at Industry 4.0 or Next Gen, which offers a positive outlook on the future. We talked about the opportunities and challenges of this fourth industrial revolution with Professor Arjen van Witteloostuijn from the Tilburg University. Professor van Witteloostuijn also participates in the 'Next Gen' chair from the Antwerp Management School.


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Arjen van Witteloostuijn

Is Next Gen just science fiction, or is it already happening?

Professor Arjen van Witteloostuijn: "It's already happening, and it has been for a long time. And I believe the promises. But we need to remember that every generation is convinced they are living in the most dynamic era ever. Many Roman legionaries were convinced that they lived in the most advanced period ever, and that was a few thousand years ago. Now we're thinking the same thing. 

There is a really good book recently published by Robert Gordon, an American economist, in which he says that there have been technological revolutions in the past that were much more important. The first industrial revolution was a huge step, and the second one too. This revolution is not unimportant, but actually it's minor." 

What can we expect from this fourth industrial revolution? 

"There's lots of potential, but actually utilizing this potential is not as simple as it seems. Certain things such as tackling organized crime could become much easier. For example, if we can monitor utility bills and we notice that the bills in a certain building are skyrocketing, it could mean that marijuana is being grown there. These are all little things that could make fighting crime much better and more effective, as long as they are properly implemented." 

What are the biggest challenges for Next Gen?

"The biggest challenge is to think about how you can convert all these digital innovations into activities that create value, because it's not all that easy. A lot of large companies, such as insurance and logistics companies, have an enormous amounts of data that they could potentially profit from. However, many have no idea what to do with it or how to use it. 

That also applies to the government. Just think about it: the Municipality of Antwerp alone has an enormous amount of administrative data just sitting in its archives. They know the age and place of birth of every resident, they have tax records, they know how children are doing at school, they have cameras and sensors, and so on. But what exactly should they do with all this information? 

I think it's important for all of us to be involved in the issue and to think carefully about what we can achieve with this information." 

Will it have a big impact on employment and how companies work?

"That's what we always assume. With every new wave of technology we're afraid that jobs will vanish, but usually it's not that bad. The middle class is certainly under pressure, but this has been happening for several decades now. There is a sort of dualization, with an elite of smart and creative people who are indispensable. A computer is not creative. We can't automate creativity or intelligence, so we will always need these talents. We also have a lot of work that still has to be done. The streets have to be cleaned, people have to go to the barber or the hairdresser, and so on. We will always need people for these jobs, but the middle class is under pressure." 

What about older people who don't know how to use a computer? Will they still be able to communicate with companies and the government? 

"That will be a huge problem. I see this with my father, for example. He's 86 years old and doesn't own a computer, and he doesn't want one either. For some of his bank matters, he has to drive dozens of miles to be helped by a real person. People like my father are extremely dependent on other people who can use technology." 

Does it look like companies and the government will do something about this? 

"They do need to pay attention to this issue; otherwise I'm afraid a new kind of illiteracy will arise: digital illiteracy. It's a very difficult side effect that you can already see coming." 

Every generation is convinced that they are living in the most dynamic era ever, but within 5 years we will probably experience a lot of changes that are currently unthinkable. How can we best prepare for the future? 

"You can't know the future. If you already knew it, it wouldn't be the future. I think we need to ensure that we have a society that is tolerant and able to deal with uncertainty, and that dares to face this uncertainty. A society that provides a basic income and enables people to be flexible. 

We need to create a society that can deal with uncertainty in two ways: by recognizing when uncertainty occurs, and by responding quickly and flexibly and doing something about it." 

Should companies also adopt the same flexible attitude?

"Yes, but on a macro level. Companies come and go. Some companies miss the boat and go bankrupt, and they're replaced by others who were smarter." 

Do you have a final message?

"We've discussed the most important developments, but I think there's still one thing we definitely must not lose sight of: everything related to the environment and climate. Moving toward a sustainable economy is in my opinion more important than creating a smart economy. And a sustainable future is possible if we use digital innovations intelligently. This will be a long process, but if the smart and sustainable economies are able to reinforce each other, the result will be amazing." 

© 2018 KPMG Central Services, a Belgian Economic Interest Grouping ("ESV/GIE") and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

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