Page 53 - The Fourth Industrial Revolution

technologies that create entirely new ways of serving existing needs and

significantly disrupt existing value chains. Examples abound. New storage
and grid technologies in energy will accelerate the shift towards more
decentralized sources. The widespread adoption of 3D printing will make
distributed manufacturing and spare-part maintenance easier and cheaper.

Real-time information and intelligence will provide unique insights on
customers and asset performance that will amplify other technological
trends.

Disruption also flows from agile, innovative competitors who, by accessing
global digital platforms for research, development, marketing, sales and

distribution, can overtake well established incumbents faster than ever by
improving the quality, speed or price at which they deliver value. This is the
reason why many business leaders consider their biggest threat to be
competitors that are not yet regarded as such. It would be a mistake,
however, to think that competitive disruption will come only through start-

ups. Digitization also enables large incumbents to cross industry boundaries
by leveraging their customer base, infrastructure or technology. The move of
telecommunications companies into healthcare and automotive segments are

examples. Size can still be a competitive advantage if smartly leveraged.

Major shifts on the demand side are also disrupting business: Increasing

transparency, consumer engagement and new patterns of consumer
behaviour (increasingly built upon access to mobile networks and data)
force companies to adapt the way they design, market and deliver existing
and new products and services.

Overall, I see the impact of the fourth industrial revolution on business as an
inexorable shift from the simple digitization that characterized the third

industrial revolution to a much more complex form of innovation based on
the combination of multiple technologies in novel ways. This is forcing all
companies to re-examine the way they do business and takes different forms.
For some companies, capturing new frontiers of value may consist of

developing new businesses in adjacent segments, while for others, it is
about identifying shifting pockets of value in existing sectors.

The bottom line, however, remains the same. Business leaders and senior
executives need to understand that disruption affects both the demand and
supply sides of their business. This, in turn, must compel them to challenge

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