Much has been said about the Fourth Industrial Revolution (opens in new tab). It’s telling that Klaus Schwab, the founder and chairman of the World Economic Forum, is already advising global stakeholders on how to respond to the transformation he predicts (opens in new tab) will be “unlike anything humankind has experienced before.”
The Fourth Industrial Revolution is about how technology will become embedded in societies, and someday potentially even inside the human body. We’re feeling the effects of this revolution already today. Digital technology is more enmeshed in our day-to-day lives than ever before.
As businesses face this tectonic shift, we can look to the previous industrial revolutions as a lens through which to prepare. The question to ask is: through each, what separated the leaders from the laggards? What can we glean from these prior revolutions to understand what types of companies will see explosive growth and which will be left behind?
I believe the leaders will be those companies that excel at what I call “the last mile of innovation.” Let me explain.
- During the Second Industrial Revolution, companies like GE and Ford didn’t just harness electric power and apply it to mass production; they conquered the “last mile” of innovation between electricity and our homes and, in doing so, led to the creation of things like household appliances and mass transportation.
- During the Third Industrial Revolution, companies like Apple and Amazon didn’t just harness the benefits of digital technology and the internet to build a better device and reinvent the supply chain; they conquered the last mile of innovation between internet technology and our day-to-day lives to change the way we connect, communicate, shop, travel, work, collaborate - the list is endless.
- The Fourth Industrial Revolution is upon us and centres less on advances in technology and more on advances in communication and connectivity. At the heart of advances in communication and connectivity is data. There is a plethora of data being generated today that businesses have access to that can help companies deliver experiences that delight us and change how we live our lives.
Excelling at the last mile of innovation
Organisations that will lead the Fourth Industrial Revolution will be those that conquer today’s “last mile of innovation” between the data they have about us and the experiences we have with their products and services. These will be the organisations that make the difficult but necessary shift from the simple digitisation of one or two technologies to innovation based on combinations of technologies. For example:
- In health care, we will see companies like Anthem (opens in new tab) use robotic process automation and artificial intelligence (AI) to provide better health care outcomes with higher efficiency and at a higher velocity.
- In manufacturing, we are seeing companies like Toyota (opens in new tab) focus on areas such as connectivity services, shared mobility and upgrades that transform delivering cars to delivering mobility as a service to customers.
- In retail, companies like Nike (opens in new tab) innovate across their product design, supply chain and consumer marketplaces to deliver personalisation at scale. For example, Nike uses digitally enabled services to provide a differentiated consumer experience in its Nike by Melrose store in Los Angeles by using data on what consumers have purchased in nearby zip codes.
And while every company is racing to harness data, and every company is on the path to becoming a data company (opens in new tab), not every company will win.
The challenges of relentless and continuous innovation and the factors for success
The last mile of innovation in the Fourth Industrial Revolution is littered with a number of risks and tremendous challenges. And, as organisations go through this change, they will be forced to rethink how they innovate. They will need to challenge their teams’ assumptions. They will need to relentlessly and continuously innovate at an unprecedented velocity. Some of the gating factors to speed include:
- The costs of managing data security and privacy are skyrocketing (opens in new tab). Recent breaches have resulted in a plethora of global regulations companies must adhere to, including the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act.
- The costs of adhering to these regulations are paid for not just in dollars, but in the speed of innovation. Without the right technology, the fundamental act of putting the most valuable data in the hands of the most innovative and creative minds within a business is painstakingly slow. And time is not a resource that winners will want to waste.
- A by-product of the Third Industrial Revolution creating complexity in the Fourth Industrial Revolution is the plethora of sources from which companies capture customer data. This is extremely pronounced in incumbent behemoths responding to cloud-native disruptors. The largest companies in the world are typically navigating a hybrid, heterogeneous data terrain.
I believe the companies that will win in the Fourth Industrial Revolution will be those that conquer all three of the above challenges, namely:
- They will successfully and cost-effectively embed security and compliance into their innovation workstreams with the least amount of effort and overhead.
- They will enable teams within their organisations to rapidly get access to the most valuable and impactful data they need in a matter of minutes, not weeks or months.
- They will make it stupidly simple for innovation teams within their organisations to navigate hybrid data terrains -- whether on-premise or in the cloud, and regardless of the type of data stored.
Unlike the previous three industrial revolutions, the Fourth Industrial Revolution is moving at an exponential pace. In order to win in this climate of rapid change and disruption, businesses must rethink the speed at which they innovate, rethink how their teams collaborate and fiercely protect the data that is the fuel for their next wave of innovation while ensuring that the protective measures they take do not slow them down.
Monika Saha, CMO, Delphix (opens in new tab)
Image Credit: Koretnyk Anastasiia / Shutterstock