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Is India ready for Industrial Revolution 4.0

A key trend is the development of technology-enabled platforms that combine both demand and supply to disrupt existing industry structures, such as those we see within the “sharing” or “on-demand” economy.

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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. This is being led by the convergence of data into every sphere.

The fourth revolution would be characterized by a fusion of technologies that is blurring the lines between the physical, digital and biological spheres.

According to the World Economic Forum, the Fourth Industrial Revolution is going to be a distinct one because of it’s velocity, scope, and systems impact. 

“The speed of current breakthroughs has no historical precedent. When compared with previous industrial revolutions, the Fourth is evolving at an exponential rather than a linear pace. Moreover, it is disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance.” WEF report mentions.

The number of possibilities that are going to unfold with Billions of people connected by mobile devices, with unprecedented processing power, storage capacity, and access to knowledge, are unlimited. 

Emerging technology breakthroughs such as Artificial Intelligence, Robotics, Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, material science, energy storage and quantum computing would transform the world like never before!
 We already see artificial intelligence coming in all around us, from self-driving cars and drones to virtual assistants and software that translate or invest. 

AI has made spectacular progress in recent years, driven by exponential increases in computing power and by the availability of vast amounts of data, from software used to discover new drugs to algorithms used to predict our cultural interests. 

Digital fabrication technologies are interacting with the biological world on a daily basis. 

Engineers, designers, and architects are combining computational design, additive manufacturing, materials engineering, and synthetic biology to pioneer a symbiosis between microorganisms, our bodies, the products we consume, and even the buildings we live in.

The impact on business

Innovation in business would happen at unheard-of pace. The velocity of disruption would become hard to comprehend or anticipate and these drivers would constitute a source of constant surprise. Even the most established and so-called secure business models might get rendered obsolete. 

Across all industries, there is clear evidence that the technologies that underpin the Fourth Industrial Revolution are going to have a major impact on businesses.

On the supply side, many industries would see the introduction of new technologies that create entirely new ways of serving existing needs and significantly disrupt existing industry value chains. 

Disruption is also flowing from agile, innovative competitors who, with their access to global digital platforms for research, development, marketing, sales, and distribution, can oust well-established incumbents faster than ever by improving the quality, speed, or price at which value is delivered.

Business models would be altered and lifecycles of existing products and services shall dramatically reduce.

Major shifts on the demand side are also occurring, as growing transparency, consumer engagement, and new patterns of consumer behaviour forcing companies to adapt the way they design, market, and deliver products and services.

A key trend is the development of technology-enabled platforms that combine both demand and supply to disrupt existing industry structures, such as those we see within the “sharing” or “on-demand” economy. 

The mobile technology platforms are creating entirely new ways of consuming goods and services in the process. In addition, they lower the barriers for businesses and individuals to create wealth, altering the personal and professional environments of workers. 

On the whole, there are four main effects that the Fourth Industrial Revolution has on business on 

  1. Customer expectations 
  2. Product enhancement 
  3. Collaborative innovation
  4. Organizational forms 

Convenience and customer experience is at the epicentre for businesses and it is constantly about improving how customers are served. 

Traditional physical products and services are seeking to enhance their relevance with digital capabilities and increase their value. New technologies make assets more durable and resilient, while data and analytics are transforming how they are maintained. 

Customer experiences, data-based services, and asset performance through analytics would form the core of every business narrative. The emergence of global platforms and other new business models means that talent, culture, and organizational forms will have to be rethought.

Overall, the inexorable shift from simple digitization (the Third Industrial Revolution) to innovation based on combinations of technologies (the Fourth Industrial Revolution) would force companies to re-examine the way they do business. 

The bottom line, it is the business leaders and senior executives who need to understand their changing environment, challenge the assumptions of their operating teams, and relentlessly and continuously innovate.

There is no escaping the fact that every single entity in every single sector has to adapt to the convergence of data to survive!

In other words, AI is the new electricity!

Artificial Intelligence – Areas of study, Patents and Progress

Unlike popular belief, Artificial Intelligence has several fields of study. Let me start this by defining what they are

Artificial Intelligence has identifiable roots in a number of older disciplines, particularly: Philosophy Logic/Mathematics Computation Psychology/Cognitive Science Biology/Neuroscience Evolution.

There is inevitably much overlap, e.g. between philosophy and logic, or between mathematics and computation.

Wikipedia defines:

Probabilistic reasoning is a method of representation of knowledge where the concept of probability is applied to indicate the uncertainty in knowledge. Probabilistic reasoning is used in AI: When we are unsure of the predicates. When the possibilities of predicates become too large to list down.

Machine learning is an application of artificial intelligence (AI) that provides systems with the ability to automatically learn and improve from experience without being explicitly programmed. Machine learning focuses on the development of computer programs that can access data and use it to learn for themselves

Ontology engineering in computer science, information science and systems engineering is a field which studies the methods and methodologies for building ontologies: formal representations of a set of concepts within a domain and the relationships between those concepts

Logic programming is a type of programming paradigm which is largely based on formal logic. Any program written in a logic programming language is a set of sentences in logical form, expressing facts and rules about some problem domain.

Fuzzy logic is a form of many-valued logic in which the truth values of variables may be any real number between 0 and 1 both inclusive. It is employed to handle the concept of partial truth, where the truth value may range between completely true and completely false.

So what are the sectors that AI applications are being developed?

Only if you are fortunate to be working in a sector outside of these, can you live oblivious of the penetration and disruption of AI.

One might then wonder what the functional areas that are getting disrupted are which are getting disrupted due to the onset of AI… 

Below mentioned are the functional areas

These obviously are the broad areas but the specific functional applications vary basis the sectors.

The quantum of change coming our way and its enormity should be evident from the above charts (courtesy World Intellectual Property Organization research paper on AI).

The big question that should bother us as a consequence is how prepared is Indian education and how many Indian corporates are at the forefront of this change

Here is a fact sheet.

Firstly, it is important to understand the rise of AI and the number of patents filed each year by the top sectors/fields of AI

As evident above, the big transformation began in the early 2000s and the big spike in patents, evident from 2016 onwards.

Below mentioned are the overall patent applications in various fields of AI

The early movers in Corporate and the universities who have identified the potential of AI and have done significant work on AI are mentioned below

The sector-wise break up of patents is mentioned below

The top 5 countries pioneering AI in each sector is as under:

This illustrates how much of a catch-up India and Corporates in India have, to catch pace with the rest of the world.

Many Indian Corporate leaders are guilty of not giving a serious impetus to the change.

One particular Industry where the Tail is wagging the dog is the media and entertainment sector in India. This is one sector where, for an eternity, traditional/conventional media owners overlooked Digital and have always believed lack of penetration and cost of data would restrain the growth of Digital stream –audio & video.

All it took was one mobile service provider to reinvent the business model and today people from even Tier ¾ towns have embraced digital.

Consumer habits are being altered at an unprecedented pace and this is spinning the dynamics of the entire M&E business on its head.

Other sectors are not too far behind.

This is the prime reason why India hasn’t been able to put up a DiDi or a Baidu.

Let’s also look at how India is doing in academics.

Below are the top universities/ research institutes that have filed patents in AI and their country of origin

It is evident that we have a problem with the pipeline as well in India. Either the universities are still waking up to these technologies or have absolutely no edge yet.

Overall, this is where India ranks in terms of patents on AI as per WIPO – a distant No.10.

What does all this mean?

  • The wheels of the Industrial revolution have started to roll. India has a catch up to do.
  • Industry and business models are transforming at an unprecedented pace.
  • Industrial revolution 4.0 would need the adoption of new technologies would mean an entirely new set of skills needed to stay employable.
  • Those in leadership and in their early, the mid-50s would transcend by the time the commercialization of these technologies happen. So, they might or might not push the change but in the interest of relevance, each business needs to innovate and adopt AI
  • Education needs to quickly adapt and equip students in the new and emerging fields
  • Government has to make a significant effort to skilled labour in the new areas. 
  • Temporary set-backs like slowdown/ loss of jobs are expected and Govt along with Corporates and academicians has to have a clear plan on re-skilling people to make them more employable 
  • Industrial Revolution 4.0 shall significantly push sustainable and green technologies which would mean cleaner Earth and better living and India, has a chance to become a strong agrarian economy yet again, if it chooses to adopt new technologies aggressively

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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Satyanarayana Murthy YVS

Armed with Engineering, Business Management academic background and an alumnus of IIM-B, he has had the good fortune of working across varied roles starting from Manufacturing, Sales, Channel Management, Distribution, Brand, Marketing and PR, Business Strategy and Business Management across diverse sectors from Engineering, Oil & Gas and Media. Currently, he consults a few Start Ups and MSMEs besides working on an Analytics Media Tech and Luxury & Lifestyle Market place start up

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