Page 62 - The Fourth Industrial Revolution

realm, a car is now a computer on wheels, with electronics representing

roughly 40% of the cost of a car. The decision by Apple and Google to enter
the automotive market shows that a tech company can now transform into a
car company. In the future, as the value shifts towards the electronics, the
technology and licensing software may prove more strategically beneficial

than manufacturing the car per se.

The finance industry is going through a similar period of disruptive change.

P2P (peer-to-peer) platforms are now dismantling barriers to entry and
lowering costs. In the investment business, new “robo-advisory” algorithms
and their corresponding apps provide advisory services and portfolio tools

at a fraction of the old transaction cost – 0.5% instead of the traditional 2%,
thereby threatening a whole segment of the current financial industry. The
industry is also aware that blockchain will soon revolutionize the way it
operates because its possible applications in finance have the opportunity to
reduce settlement and transaction costs by up to $20 billion and transform

the way the industry works. The shared database technology can streamline
such varied activities as the storage of clients’ accounts, cross-border
payments, and the clearing and settling of trades, as well as products and

services that do not exist yet, such as smart futures contracts that self-
execute without a trader (e.g. a credit derivative that pays out automatically
when a country or company defaults).

The healthcare industry is also faced with the challenge of incorporating
simultaneous advances in physical, biological and digital technologies, as
the development of new diagnostic approaches and therapies coincide with
a push to digitize patient records and capitalize on the wealth of information

able to be gathered from wearable devices and implantable technologies.

Not all industries are at the same point of disruption, but all are being
pushed up a curve of transformation by the forces driving the fourth
industrial revolution. There are differences according to industry and
demographic profile of the customer base. But in a world characterized by

uncertainty, the ability to adapt is critical – if a company is unable to move
up the curve, it may be pushed off it.

The companies that survive or thrive will need to maintain and continually
sharpen their innovative edge. Businesses, industries and corporations will
face continuous Darwinian pressures and as such, the philosophy of “always

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