What Is Industry 4.0, and What Do You Need To Know About It?

Unlike all previous ones, a new industrial revolution will inevitably change the way we work, play, communicate, and go shopping. Here's what you need to know about the fourth industrial revolution.

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What is Industry 4.0?

The fourth industrial revolution (Industry 4.0) assumes a new approach to production based on the massive introduction of information technology in the industry, large-scale automation of business processes, and the spread of artificial intelligence.

The benefits of the Fourth Industrial Revolution are clear: increased productivity, increased worker safety by reducing jobs in hazardous working conditions, increased competitiveness, groundbreaking products, and much more.

"The world is at a crossroads. The social and political systems that have saved millions of people from poverty and guided our national and global policies for half a century are now working against us." With this disturbing statement begins the book Technologies of the Fourth Industrial Revolution, written by the founder and permanent president of the World Economic Forum in Davos, Klaus Schwab.

In 2016, he introduced the term "Industry 4.0" into mass use (it appeared in 2011 in Germany and denoted the technology of "smart" factories), which has become synonymous with the Fourth Industrial Revolution.

Like all previous industrial revolutions, the fourth changes not only production, but our whole life - the economy, relations between people, even to some extent the very understanding of what it means to be human. 

Artificial intelligence and robotization, the Internet of Things (IoT) and 3D printing, virtual and augmented reality, bio-, and neurotechnologies - these latest methods are becoming a part of our daily existence before our very eyes.

Robots vs humans

The fourth industrial revolution could lead to an unprecedented widening gap between rich and poor. The number of investments in projects that are engaged in artificial intelligence is growing, since their technologies can significantly reduce costs for companies. But the side effect will be skyrocketing job losses.

• According to McKinsey's forecast, by 2030, about 400 million people on the planet, or 14% of the workforce, will lose their jobs because programs and robots will perform their functions.
• 53% of workers believe that automation will significantly change or make their work obsolete over the next ten years (only 28% think this is unlikely).
• 77% of employees will be forced to acquire new skills or completely retrain in the near future due to robotization.
• 80% of men acquire new skills due to robotization, compared with 74% of women.
• 34% of adults without secondary or tertiary education do not consider it necessary to develop new digital skills.
• 69% of people aged 18 to 34 are positive about the potential impact of digitalization on the labor market. Their opinion is shared by 59% of people aged 35 to 54 and 50% over 55.

However, artificial intelligence will not be equal to humans in the foreseeable future. On the contrary, AI systems work best when guided by a person, set goals for them, and suggest optimal solutions.

What else awaits us with the development of Industry 4.0? The poor will get poorer and the rich richer. Many IT companies have already become monopolists in their respective fields. For example, in 2017, Google controlled almost 90% of the global contextual advertising market, and Facebook controlled almost 80% of social networks.

Internet of Things

Technology creates new value, but it can also introduce new dangers. For example, the Internet of Things is likely to increase the level of safety in cities, reduce the load on transport infrastructure, improve healthcare, and provide municipalities with energy savings. 

At the same time, the spread of IoT is likely to increase instability in many areas of the economy: most new technologies cause temporary excitement and thoughtless investments (like blockchain and cryptocurrencies). 

In addition, new cybersecurity challenges will arise as hackers seek to capitalize on the proliferation of the Internet of Things. There will be more cyberattacks than ever before.

Virtual and Augmented Reality (VR / AR)

The most common formats adapted for virtual and augmented reality are video games and various educational programs. But with the development of VR and AR technologies, they are no longer just game tools. 

Virtual and augmented reality is increasingly being introduced into professional spheres. Companies and departments are feeling the need for advanced corporate training methods: VR, for example, is used to train soldiers, pilots and sales associates, engineers, and power engineers. Video games, entertainment, healthcare, real estate, education, and the military - VR and AR will be actively used here in the near future. You can even meet with a deceased relative using a virtual reality headset. True, this raises new questions for the industry - where is the permissible line?

Big Data

Every day there is more and more data. Government, industry, medicine, retail, social networks, banks, and the Internet of Things - in these and other areas, a huge amount of information appears every day.

But conventional software is not capable of analyzing this amount of data. Therefore, machine learning processes terabytes and zettabytes of information. The new possibilities for analyzing such arrays affect many areas of life, including business, healthcare, communications, and entertainment.

At the same time, big data requires a solid and well-tuned security system. Information, especially its large volume, which companies analyze, has a high price. Its leak can lead to disastrous consequences for both the business and the individual.

Artificial Intelligence

A person cannot analyze a large array of data, and technology does this. For example, they track the violator of traffic rules by cameras, recognize a criminal in a crowd, diagnose diseases and even predict an outbreak of a virus. 

Technologies capable of solving non-routine tasks at a high level are now called artificial intelligence. Although, in reality, the algorithms underlying each such technology are unique in their way - it can be machine learning and deep learning, and, in fact, artificial intelligence.

Today, artificial intelligence is at the heart of the recommendation services of online stores, voice assistants, filters content, writes texts and even music, and recognizes speech and human faces.

Companies are increasingly using chatbots to communicate with customers. AI allows businesses to make huge amounts of money because it analyzes consumer behavior and helps improve algorithms. They, in turn, begin to better predict the needs of people, as a result of which they personalize the shopping experience and increase sales.

Cybersecurity and Privacy

Our increasingly digitalized life helps fraudsters gain access to personal information. The more companies that collect user data, the more likely it will leak.

Thanks to the advancement of technology, every minute, dozens of companies - mostly private and unregulated by anyone - register the movements of millions of people, store this information in huge databases, and then sell it to advertisers or the government. 

Today society lives in the perfect surveillance system it has created. Technological progress and the desire to make money have led to the fact that third parties can find out everything about the life of each of us in a matter of minutes.

Ethical issues

Technology will change the very concept of "human." Biological engineering methods in the future can bring people absolute health and even immortality. Cloning will lead to people who, by definition, will not have parents and families.

Genetic engineering can transform the human race into a collection of diverse creatures with capabilities that we now associate with superheroes from science fiction films. The use of neurotechnology leads us into the same ethical labyrinth. Understanding the connection between brain state and behavior can undermine the foundations of jurisprudence - for example, there will be credible evidence that a person has no freedom of choice.

But ethical questions arise not only in the context of the human future but also in the future of robots. What if they become as smart as we are? Can they still be considered a tool and exploited without asking permission? What if AI can fend for itself? Will the UN then have to include the protection of the rights of machines in the Slavery Convention?

There is no need to be intimidated by new methods that are changing the economy and everyday life in front of our eyes. "We will not be able to fully exploit the opportunities that open up if we surrender to the complexity of technologies and consider them external, deterministic forces beyond our control," says Executive Chairman of the World Economic Forum, Mr. Klaus Schwab.