The Commercial Courier is a business publication by the Malta Chamber of Commerce, Enterprise and Industry.
It’s latest edition has researched the fourth industrial revolution which is characterized by a fusion of technologies; blurring the lines between the physical, digital, and biological spheres. In its cover-story the publication it reports an interview with me on the subject. Below is the full text:
A PWC report released in 2016 defined Industry 4.0 – the fourth industrial revolution – as “the end-to-end digitisation of all physical assets and integration into digital ecosystems with value chain partners.” How far along do you think the Fourth Industrial Revolution is, both from a global and a local point of view? Has it hit a peak, plateaued, or is it still gaining momentum?
The evidence of Industry 4.0 is all around us: from artificial intelligence to mobile supercomputing. This dramatic change is ubiquitous and is fundamentally changing the way we live and the economies in which we operate. What makes this industrial revolution different from previous ones is that it is merging the physical, digital and biological realities in a way which re-defines us as humans. Google’s CEO has called this change more fundamental than the discovery of fire of electricity!
Locally we see mixed approaches towards adoption. The ICT industry has ushered in a large amount of disruptive I4.0 concepts which are being absorbed by some sectors such as gaming, financial services, travel and logistics. However, other sectors still lag behind: healthcare, retail, education, construction and public government systems. This adoption pattern, which is similar to that we see on the international horizon, is often influenced by misplaced fear and a general sense of lethargy towards the imperative of change.
The digital industry places a lot of importance on ‘disruption’. How important do you think it is for Maltese companies to be disruptive in order to survive in this new world of business?
Disruption and business-transformation have risks. However, successful business knows how to spot these risks and avoid them – whilst leapfrogging into higher levels of business activity. The rewards for those who are able to disrupt and innovate are huge.
In my experience consulting several firms through this stage of digital transformation, I have found excessive caution to often be the reason why disruptive strategies don’t get executed. This is often fueled by a fear of the unknown, lack of focus and a culture whereby decision-making is not driven by data and macro-economic trends but is limited to the known ‘local story’.
With the right access to talent and a sense of discipline, adopting disrupting strategies can have significant benefits for Malta, helping its businesses build real value and carving a more relevant space within the global commercial space.
What role do customers play in the digital industry revolution, and how will it the revolution change the business-to-client relationship? What are the tools that the digital industry revolution has brought with it to allow companies to find out what clients really want, and how best to give it to them?
The relationship between a business and its customers has been significantly transformed. With a view to reduce costs and scale activity across multiple languages and time-zones, communication is now automated. Chatbots are assisting business to have simultaneous conversations without the cost-penalty of building traditional call-centres. It’s estimated that by 2020 most of B2C conversations will be with chatbots not humans – and that’s great as we’ll see higher accuracy, speed and efficiency.
The tools at our disposal in I4.0 allow us to ‘zero-in’ on the needs of our clients. Big data mining techniques, artificial intelligence, NLP and other techniques allow us to, not merely ‘know’, but also to ‘predict’ customer needs. In turn this allows business-leaders to better plan their resources to match changing market patterns.
Is there a basic digital blueprint that can be followed that can guarantee Industry 4.0 success? What measures do Maltese and Malta-based companies have to commit to, in order to stake their claim in the digital global revolution?
Revolutions don’t come with manuals and business success is often a rather convoluted path. However, we have developed a consulting framework which helps our clients think around the challenges which digital transformation poses. The process starts with securing senior management commitment and then proceeds with the setting of clear and ambitious targets. We often recommend our customers to start with a ‘lighthouse project’ which allows for significant rewards with manageable risk and which delights the organization and garners internal support. Talent and scale are critical to this process and organisations need to find and promote new and agile ways of working.
This revolution is not merely one of superficial process-change. It’s deeper. We often push our customers to embed a digital culture deep in the company’s DNA. This implies working and thinking faster and in a more collaborative way.
What are the biggest challenges that Maltese and Malta-based companies face when it comes to adapting to a new digital business reality?
Just when a business thinks it got the knack of things, the landscape changes and reinvention becomes necessary. Change in and of itself is the first challenge to Maltese business. We are inherently change-resistant! Malta needs to embrace the power of digital to drive change and to use this to unlock powerful digital tools that enhance the journey of the customer and re-position the approach of business.
To do this Maltese companies must side-step hierarchy and allow for connections between people across the organization within a ‘fail-safe’ environment. The goal of digital adoption needs to become a shared purpose – a common ethos – which defines the future of the company.
With all these transformations at the forefront, what do you think the business landscape in Malta will look like in a few years’ time?
Teams will be more interdisciplinary and departmental boundaries will disappear to better integrate the value-chain. For example; manufacturing, logistics, retail and delivery will keep getting fused and connected to offer a better on-time service to the customer.
Purchasing will rely heavily on embedded systems which move the purchase-discretion away from the human and into an AI system. Amazon’s ‘dash’ system has been doing this successfully for years. Bots and personal assistants will similarly handle a large amount of purchasing on behalf of the human owner. This close interaction between physical and virtual will pose a challenge to our retail industry. Read more about this in the post about ‘humans’ in ‘Human Resources’ here.
Healthcare will radically transform and individual device-driven diagnostics will save more lives. Doctors will receive more medical insights from embedded devices which are more accurate than humans at remembering episodes and activities. Insurance companies will re-think premium-models around data to effectively insure those who are manifestly within the ‘risk-profile’ they wish to address.
Data scientists and ‘translators’ (those gifted individuals who act as an interlocutor between complex computer science and daily business decisions) will increasingly be in-demand and find a seat at the boardroom table. This will increase the pressure on our education systems to develop such personnel which will need to better guarantee the transition from the classroom to the boardroom.
Homes will be better connected to smart devices making us all safer and more comfortable.
We are probably the last generation to sit for a driving test since in two decades it will be rare to see a human-driven car. This will once again radically change the automotive market and transport services presenting new challenges to our roads and how they are built.