CAIRO - 12 December 2019: Technological Development is more rapid than what lies in the imagination, leaving people behind with no option but coping. The shape of industry has been changing, starting from the first industrial revolution till the appearance of technology. Who creates technology that is the best to benefit from, and this raises question; what about the rest of the world, including Egypt?
It is also essential to understand what this revolution is: its opportunities, challenges and how to benefit from it. Business Today Egypt reviews this topic in an attempt to get an in-depth outlook of the current situation to reach optimally appropriate results that can help define the right path for Egypt.
The Industrial Revolutions
The First Industrial Revolution used water and steam power to mechanize production. The Second used electric power to create mass production. The Third used electronics and information technology to automate production. Now, a Fourth Industrial Revolution is building on the Third, also often dubbed the ongoing digital revolution. It is characterized by a fusion of technologies that blurs the lines between the physical, digital, and biological spheres.
The 4th Industrial Revolution
The Fourth Industrial Revolution is characterized by the emergence of innovative technologies such as robotics, artificial intelligence, nanotechnology, quantum computing, biotechnology, the Internet of Things, 3D printing and self-driving vehicles.
A report by PricewaterhouseCoopers (PWC) defined the Fourth Industrial Revolution (4IR) as the unfolding age of digitalization—from the digitally connected products and services we consume, to advancements in smart cities and factories and increasingly common automation of tasks and services in our homes and at work.
Also known as Industry 4.0, this era of digital transformation ushers in new real-time data gathering, analysis and algorithmic decision- and prediction-making capabilities, thus creating a digital twin of our physical world. 4IR comes on the heels of the third indus-trial revolution (driven by electronics and information technology), the second (fueled by electricity) and the first (fired by steam).
“This Fourth Industrial Revolution is, however, fundamentally different. It is characterized by a range of new technologies that are fusing the physical, digital and biological worlds, impacting all disciplines, economies and industries, and even challenging ideas about what it means to be human, Founder and Executive Chairman of the World Economic Forum, Klaus Schwab, argues in his book The Fourth Industrial Revolution.
According to Schwab, the resulting shifts and disruptions entail that we live in a time of great promise and great peril. The world has the potential to connect billions more people to digital networks, dramatically improve the efficiency of organizations and even manage assets in ways that can help regenerate the natural environment, potentially undoing the damage of previous industrial revolutions.
Schwab is also skeptical about whether organizations are able to adapt and if governments could employ and regulate new technologies to capture their benefits, saying that shifting power will create important new security concerns; inequality may grow; and societies fragment.
“The Fourth Industrial Revolution is within the control of all of us, as long as we are able to collaborate across geographies, sectors and disciplines to grasp the opportunities it presents,” he analyzed.
In particular, Schwab called for leaders and citizens to “together shape a future that works for all by putting people first, empowering them and constantly reminding ourselves that all of these new technologies are first and foremost tools made by people for people.”
Are we ready for the Fourth Industrial Revolution?
In 2019, PwC conducted research in the U.S., UK, Germany, India, China, and South Korea, with results that when it comes to sharing data, consumers are highly discriminating. Businesses need to assess whether the experience offered is greater than any potential risks consumers assume. For example, consumers are more likely to share personal data in exchange for an improved quality of life and safety than they are to save money.
It also stated that consumers want more transparency and control in 4IR products. Consumers want assurances of how their data will be used, and to be notified when their data is breached. They also want more choice and control over how a 4IR product or service is used.
“Employees are jittery over 4IR’s impact on job security and changing roles. Businesses need to be clearer to workforces on how 4IR will impact cur- rent jobs and create altogether new ones. This will both help allay employee concerns surrounding job security and support successful 4IR adoption strategies,” it added.
In addition, most business leaders believe 4IR can help support against economic downturns. Businesses are looking to 4IR technology as protection from economic slowdowns via greater efficiencies and productivity, as well as new revenue opportunities and accelerated R&D and product development.
The Middle East
In 2016, PwC conducted a Middle East industry 4.0 survey, where key findings included that companies applying 4G technology expected to reduce costs and increase revenues between 2015 and 2020. “In our view, Industry 4.0 is driven by: Digitisation and integration of vertical and horizontal value Chains Industry 4.0 digitises and integrates processes vertically across the entire organisation, from product development and purchasing, through manufacturing, logistics and service,” PwC reports. Among the results is digitisation of product and service offerings; digitisation of products includes the expansion of existing products, e.g. by adding smart sensors or communication devices that can be used with data analytics tools, as well as the creation of new digitised products focusing on completely integrated solutions.
The results also included digital business models and customer access; leading industrial companies also expand their offerings by providing disruptive digital solutions such as complete, data-driven services and integrated platform solutions.
“We found that companies are increasingly focused on digitising essential functions within their internal vertical value chain, as well as with their horizontal partners along the supply chain. In addition, they are enhancing their product portfolio with digital functionalities and introducing innovative, data-based services,” the company added.
As for Gulf countries, PWC states that companies in the region are beginning to embrace them at an increasing rate.
The 4th Industrial Revolution in Egypt
CEO of Industrial Modernisation Centre Amr Taha reviewed Egypt’s initiatives and preparations for the revolution by developing infrastructure and digitizng industrial zones in aims of raising the competitiveness of industrial zones and complexes through improving distribution and management of energy resources (electricity, gas) and water in these areas.
Taha added that the digital gap in Al-Sadat and the 6th of October cities has been evaluated in cooperation with the German Company Siemens, Industrial Development Authority and Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ).
“There is a plan to establish an excellence center using the fourth generation, in cooperation be- tween the Industrial Modernisation Centre and Siemens, aiming to boost and increase awareness of the importance of automation and digitization of small and medium-sized industrial companies and young entrepreneurs,” he adds.
As for the Industrial Modernisation Centre, it works on qualifying companies operating in the industrial field through digital transformation and technology support, he notes, and the centre prepares them for transformation through the provision of services including Facility Management Systems, diagnostic and corporate readiness studies for digital transformation, as well as providing technical consultancy to companies for digital transformation and automation.
On another note, Head of Unitel Egypt Amir Wassef stated, “before rushing to call for ‘joining’ the Fourth Industrial Revolution, we need to study its implications and prepare for it now because it is like a sweeping flood that will uproot some economies from their roots.”
Wassef clarifies that the Fourth Industrial Revolution infiltrated us as an inevitable product to meet several techniques of the secretions of the third Industrial Revolution. In this situation, convergence means the fusion of several paths of knowledge into a single crucible, resulting new products. Telephone, PC, cameras and computers all started their lives as independent units and then soon turned into a smartphone, Wassef tells Business Today Egypt.
“It is not different about the repercussions of the Fourth Industrial Revolution,” he states.
The main phenomenon that drives these dynamic developments is the emergence, which occurs due to complex interactions, says Wassef, and the most important characteristic is the difficulty in predicting what will lead to these emerging pat- terns as well as the resulting techniques and con- sequences.
According to Wassef, it is assumed that new technologies and industrial revolutions raise individual living standards, but also cause radical social changes in the societal fabric. “We have seen the days of the collapse of travel industry giant Thomas Cook because of digitalization by companies such as Trivago and Expedia and the losses incurred to taxi drivers by Uber and Careem,” he says.
It is also expected that the gap between the skills required and the business to be done will increase, as demand for advanced education as well as those with low-mental professions increases and the middle class disappears from the fully educated half.
“It is expected that the educational gap will also widen and have both experts from both sides and others; this gap will, in turn, exacerbate income inequality, a phenomenon that has its head on us from now on,” Wasiif clarified.
Wassif stated that replacing labor with smart ma- chines increases the consequences of that gap.
Clearly, the fourth industrial revolution is coming whether we are ready for it or not. According to experts, Egypt is preparing itself for it although it seems like we need to focus and foster its capabilities to fully benefit from such a revolution.