SUMMARY

How Ready Are We for Industry 4.0?

Digital technology is changing how people live, learn, and work. Image credit: Rodel Valenzuela.
Digital technology is changing how people live, learn, and work. Image credit: Rodel Valenzuela.

Experts share insights on the Fourth Industrial Revolution and on how to gear up for it.

Overview

The Fourth Industrial Revolution or Industry 4.0—the fusion of different technologies in the digital, physical, and biological spheres—is expected to disrupt everything, from institutional structures of government to business operating models.

At an Asian Development Bank (ADB) forum in Manila on digital strategies for development, resource speakers from the private sector, government, and NGOs talked about the impact of the next wave of technology and how countries can prepare for it.

This summary was adapted from the Knowledge Series on ICT for Development, Issue No. 3, December 2017.

Bridging the Digital Divide

The Fourth Industrial Revolution will bring a "significantly brighter future," said Shirin Hamid, principal director of the Office of Information Systems of Technology at ADB. Wider access to technology can create a dramatic impact on poverty reduction, make health care affordable, improve service delivery, and open opportunities from having a shared economy. On the other hand, if not used correctly, technology can also widen the digital divide.

Some 3.9 billion people still do not have access to the internet. In least developed countries, more than 80% of the population are offline. Bridging this digital divide is crucial to ensure equal access to information and knowledge, as well as to foster innovation and entrepreneurship.

"Asia has an uneven landscape so there are great challenges," she said. Some have access to advance technologies, while others have yet to look at how they can leapfrog using technology.

She said ADB promotes collaboration among public and private institutions to identify the role of information and communication technology (ICT) in megatrends, such as widening age gaps and climate change. ADB has supported ICT projects close to $15 billion from 2000–2012 and is looking at how it can further contribute.

Changing the Game

"There are developing countries that have more connection to the web than to the grid," said Emanuela Lecchi, head of public policy at GSMA, which represents the interests of mobile operators worldwide. She said the mobile industry offers many opportunities for people to be connected faster. However, there are issues that need to be resolved to unlock these opportunities. These include outdated legacy regulations, affordability of handsets, and data security.

"Think of the mobile industry as underpinning the digital economy and thus the Fourth Industrial Revolution," she said. She also pointed out that the industry has an important role in achieving the Sustainable Development Goals. She cited mobile apps that have been developed in India that allow women to press a button to alert their families when they are in danger and a pilot mobile money project in Bangladesh for improving financial inclusion in rural areas.

Simon Gee, managing director of nonprofit TechSoup Asia-Pacific, said digital technologies are already starting to change the way people work and live. He said in France, a 35-hour week has been implemented since 2000 for companies with more than 20 employees and since 2002 for companies with 20 employees or less. Other countries in Europe as well as Australia are also looking into the future of work and the impact of technological and other changes on jobs. With digital technology, countries can create a working life model that is fully productive, promotes health, reduces obesity, and encourages physical activity.

"In 20 to 50 years, there are not a lot of jobs that we're going to do," he said.

Such phenomenon may already be happening in the Philippines. Rey Lugtu, president and managing director of business consultancy The Engage Philippines, said "It's just a matter of time before artificial intelligence (AI) eliminates call center work in the country," which relies heavily on the IT and business process outsourcing industry for dollar receipts and employment.

Philippine companies however seem to have little awareness about the impact of Industry 4.0 on their business, and thus are unprepared for the next wave, he said. "These technologies are used by companies for four key aspects of their business: engaging customers, transforming brands, optimizing operations, and empowering employees. What's worrying is that only a few organizations understand the opportunities that can be derived from digital transformation," he said.

Reskilling People

Ramanathan Ramanan, senior vice president of TATA Consultancy Services and head of Atal Innovation Mission, said the $150-billion ICT industry in India is being given a "fantastic opportunity to reimagine business" with the onset of Industry 4.0. This is the reason India is investing heavily into turning this challenge into a great opportunity. “It is asking itself: How do we create job creators of tomorrow?"

Through its flagship initiative Atal Innovation Mission, the Government of India is training people and promoting innovation and entrepreneurship.

Shrikant Sinha, chief executive officer of India’s National Association of Software and Services Companies (NASSCOM) Foundation, said educational institutions "need to wake up to the new challenge" posed by Industry 4.0.

"Our education system is geared toward batch manufacturing processes,” he said. “We talk about jobs that will be lost, but what jobs are we talking about? Tasks that can be done earlier and are repetitive can be done with AI."

Resources

Asian Development Bank. 2017. Knowledge Summary from Digital Strategies for Development Forum 2017. Knowledge Series on ICT for Development. No. 3. December.

ITU. 2017. Broadband Playing Increasingly Important Role in Development, Says New Global Report. News release. 14 September.

Related Links

Explainer: How India Is 'Tinkering' Its Way into the Future

Summary: How to Prepare Workers for Job Automation

Ask the Expert

  • Seok-Yong Yoon
    Principal Public Management Specialist (e-Governance), Asian Development Bank

    Seok-Yong (“SY”) Yoon is Principal Public Management Specialist (e-Governance) at the Digital Technology for Development Unit, the Sustainable Development and Climate Change Department at the Asian Development Bank. He is focal person for ICT and digital development operations. Mr. Yoon has led number of digital development and eGovernance projects as a project officer and organized various internal and regional knowledge events for the better use of digital technology.

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   Last updated: May 2018



Disclaimer

The views expressed in these articles are those of the authors and do not necessarily reflect the views of the Asian Development Bank, its management, its Board of Directors, or its members.




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