

The concept of digitizing everything is becoming a reality. Automation, artificial intelligence, IoT, machine learning and other advanced technologies can quickly capture and analyze a wealth of data that gives us previously unimaginable amounts and types of information to work from. Our challenge becomes moving to the next phase—changing how we think, train and work using data—to create value from the findings obtained through advanced technologies.”
Are the leaders of businesses and government agencies ready to harness the full potential of Industry 4.0 to benefit their clients, their people, their organizations, their communities and society more broadly?
That’s the core question explored in a recent Deloitte Global survey that sought to measure business and government readiness for the Fourth Industrial Revolution—or “Industry 4.0.”
The survey polled 1,600 C-level executives across 19 countries, coupled with select interviews. What ultimately emerged was a picture of the opportunities and challenges these global leaders saw in creating new value in a changing world—a picture that conveys both hope and ambiguity.
Industry 4.0 signifies the fourth in a series of industrial revolutions, which are characterized by their ability to transform economies, jobs and even society itself through the introduction of new technologies and processes.
Beginning in the late 18th century with the advent of steam power and the invention of the power loom, the first industrial revolution ushered in mechanization and radically changed how goods were manufactured. In the late 19th century, electricity and assembly lines made mass production possible, giving rise to the second revolution. Many cite the third revolution as beginning in the 1970s, when advances in computing enabled us to program machines and networks, powering automation.
Definitions for Industry 4.0 abound, but the change it portends at its core is the marriage of physical and digital technologies such as analytics, artificial intelligence, cognitive technologies and the internet of things (IoT). This marriage of the physical with the digital allows for the creation of a digital enterprise that is not only interconnected, but also capable of more holistic, informed decision making. In a digital enterprise, data collected from physical systems are used to drive intelligent action back in the physical world. It is the possibilities arising from these feedback loops that generate abundant opportunities for new products and services, better ways to serve customers, new types of jobs and wholly new business models.
As in the previous industrial revolutions, the impact of these changes has the potential to ripple across industries, businesses and communities, affecting not just how we work, but also how we live and relate to one another. But this time, the revolution is advancing at extraordinary speed, driven by technologies developing at an exponential rate. Amid shifting demographics and unprecedented global connectivity—not just technological, but also social and economic—Industry 4.0 can herald greater opportunities than any that came before it. And greater risks.
To explore the question of “readiness” for Industry 4.0, Deloitte Global’s survey of C-level executives focused on four major areas:
Figure 1: Which of the following entities do you believe will have the most influence over how Industry 4.0 will shape society? (Select up to 3)
What we discovered is that while executives conceptually understand the changes Industry 4.0 will bring, they are less certain how they can take action to benefit from those changes. In each of the four areas of impact, the survey uncovered some tension between hope and ambiguity:
Optimism vs. ownership: While executives see a more stable future with less inequality, they are less convinced about the role they or their organizations have to play in influencing society in an Industry 4.0 era.
Evolution vs. revolution: Executives lack confidence that they have the right talent in place to be successful in Industry 4.0. They say they are doing all they can to build the right workforce, but their responses show talent remains low on their list of priorities.
Challenged vs. prepared: Executives understand they need to invest in technology to drive new business models; however, they have a hard time making the business case for that investment because of a lack of internal strategic alignment and short-term focus.