The 4th Industrial Revolution is upon us and our world is about to face some dramatic change. If you haven’t heard of the 4th Industrial Revolution, you can read my previous post here.
Recently, Forrester Research published a report claiming that between now and 2025 (less than a decade away) the U.S. will face a net 7% loss of jobs due to automation. That’s a 16% loss of jobs due to automation and 9% creation of new jobs. This is a disturbing trend with more than ~1.77 jobs lost for every job gained. This doesn’t bode well for many people, however, it should result in greater productivity, less expensive goods and fantastic new services brought on by digital transformation. The question everyone should be asking themselves is “which side of this revolution will I be on”?
If the first two industrial revolutions replaced the physical power of domesticated animals with mechanical horsepower through the use of steam, electrical and internal combustion engines, the 3rd and 4th industrial revolutions will replace the brainpower of humans who perform what has been considered high-value function jobs such as insurance appraisers and paralegals will be replaced with automated processes. These are all jobs on the top ten list of job automations, along with line cooks, drivers and telemarketers. This HBR article argues that “Compliance is ripe for automation because it is both rule-based and data-intensive.” Curious about your job? Take a look at this BBC site that allows you to enter any job (in proper Queen’s English, of course) to determine the likelihood of that job becoming automated.
Now here’s the interesting part. The companies that are making investments in automation, like the international bank ING announced earlier this week that they are doing it for a reason. They are going to crush their competition with lower costs, greater efficiency and better data for decision making. It’s almost a foregone conclusion that the strategic application of technology will be a requirement for competition in the next five years. One of the largest business consulting firms in the world recently conducted a study surveying more than 2,000 international business claiming that, in aggregate, they plan on spending more than $907 billion a year over the next five years on digital transformation. Most companies are spending 5% of annual revenue and even more amazing is that a whopping 20% are spending more than 10% of annual revenue on digital transformation. This makes digital a qualification to compete for organizations of all sizes.
If you’ve just started thinking about digital transformation there is some good news. These technologies are scalable and are available to everyone. The cloud has reduced-or even eliminated in many cases-the need to invest in one-time infrastructure costs. Computing power is consumed by user, by cycle or by the hour…and supercomputers are accessible to anyone with an internet connection. Forward-thinking leaders will build companies that disrupt. Others will focus on their unique value proposition and differentiate. Others will offer the best possible customer experiences. The rest will fail, because “this is how it’s always been done” simply will not make the cut.
We’re excited by this future and the promise it brings for the next generation and the planet. At BlumShapiro Consulting, we’re experts in the technologies, strategies and practices that are enabling digital transformation like big data analytics, business intelligence, workflow automation, predictive analytics and the Internet of Things. We are close enough to the technology to know what’s real today and what will be real tomorrow. We don’t have a crystal ball and can’t see what doesn’t exist, but our eyes are on the horizon and can see what is coming.