The Artificial Intelligence (AI) Race
Balanced on the precipice of the AI era, the progression of technology from the narrow use of AI, to its general use and on to the superintelligence pathways driven by machine-learning and big data, there are numerous implications for leading industrials.
Adoption of this disruptive technology could lead to improvements in productivity, efficiency and safety, and reduce costs, offering significant opportunities for businesses across a range of industrial sectors, including manufacturing, farming, mining, and transportation.
Despite the cyclical nature of the global industrials sector, businesses are rapidly reaching a tipping point where the costs of not investing are beginning to outweigh those upfront costs. Leading industrials implications include: 1) autonomous vehicles becoming mainstream, and the emergence of Transportation as a Service (TaaS); 2) smart, autonomous farming and mining, 3) preventative maintenance and “lights out manufacturing” and 4) increasing adoption of AI in talent sourcing.
The Calibrated and Augmented Self
The shift from mass production, one of the founding tenets of industrialization, to mass customization , enabled by advances in techonology and the availability of big data, presents both risks and opportunities for businesses.
Navigating the fine line between expectaions of increased customization with managing the privacy and ethical concerns of customers is an obvious challenge. Where businesses have also struggled to justify investing in the technology to participate in this movement, improved affordability and, therefore, profitability is a positive.
Risks emerge from greater transparency, for example around costs, increased competition and commoditization, particularly for businesses operating in industries with undifferentiated products. To address this, businesses need to prioritize innovation and become increasingly agile, adapting to change early.
Opportunities for enhanced productivty and efficiency abound, however. Areas such as farming, for example, can automate labor-intensive tasks, and bio-engineering can be deployed to reduce waste. The availability of data and the ability to utilize this means that on-demand, bespoke, responsive and customized products and services will become the new norm across areas as diverse as waste management and recruitment.
In Cloud we Trust
Industrials companies are in the midst of significant transformation, aided in no small part by the cloud. This virtual entity is bringing significant agility and scalability to firms by removing the need for cumbersome hardware and compute requirments.
Vehicles, transport and automotive in particular have become the poster child for the Internet of Things, as the cloud becomes the destination of choice for processing the data autonomous vehicles are currently producing on-board.
Cloud tech also allows for increased collaboration, for example in engineering and construction where multiple computer building modelling can remove the need for individual drawings.
Smart farms and agriculture is fast becoming the new normal, too. Drone, feeding and autonomous tractor technology will increasingly take the strain, while producing large volumes of data for the cloud to formulate an ever-better food supply system.
And at domestic level, smart homes connecting with the cloud are reshaping routines though hi-tech goods and structural tehcnologies, to optimize the way we eat, wash, heat and entertain in our home lives.
Collective Action
Technology has brought the power back to the people. Most starkly demonstrated by movements like the Arab Spring or #Marchforourlives, the incremental impact of innovation in social media platforms is increasingly felt, along with ever greater global penetration of the internet.
Tech is also, however, eroding trust in government and commercial institutions. And industrials players among others are reacting in at least three ways:
Reshaping production and supply chain positioning towards climate-friendly practices such as renewable energy usage or removal of plastics.
Environmental, Social and Governance (ESG) criteria now inform a large part of investor decisions, and companies likely to benefit from an enlightened ESG policy will be those able to demonstrate a positive repositioning of their operational and reputational standing among investors.
Social connectivity has in turn changed the labor market dramatically over the last decade, creating a global ‘gig’ economy of workers, and a digital talent pool for companies to head-hunt.
Escalating Uncertainties
We live in an era of constant change. Technology is transforming our society and acting as a disruptor across all industries. This rapid revolution has fueled uncertainty across business and as Director of National Intelligence James Clapper told Congress in 2016, “unpredictable instability is the new normal.”
The impact of these unpredictable instabilities deserve examination and by looking into the regulatory environment and evolving global trends such as climate change and urbanization it’s clear to see that industrials, and technology, can play a role.
What’s key are the needs and expectations the younger generation, who are transitioning into becoming the largest adult demographic cohort, have around planetary preservation, global infrastructure capabilities and resource scarcity.
How can industrials manage these demands with the goods and services that are desired, respond to the urgent requirements of basic living, and by using technology as a driver, stay relevant?
The challenge for industrials is clear. What is uncertain is the solution pathway. Embracing this uncertainty will be the differentiator.
The Agility Imperative
The Agility Imperative is based on the increasing need for industrials to be flexible and able to quickly adapt to competitive, economic, technological, political, and societal change forces – the unpredictable instabilities of the previous chapter.
Incumbency and existing brand equity will no longer be enough to carry companies through changing times, and/or guarantee market position and relevance. In fact, complacency in some cases could even lead to a company’s demise. In order to survie, and flourish, industrials companies will have to alter their structures and culture to adapt to these changing times.
Four agilty mandates exist to help companies manage these uncertainties and inspire change – i) Make people believe, ii) Consider a new business model, iii) Partner where possible, and iv) Lighten up. These make clear the pathways to success for companies, both small or large, afraid of disruption.
The fact is that no company is immune from disruption. It’s a case of disrupt or become disrupted.