Posted on March 3, 2024  
by Noel Guilford

Last week I asked whether you are ready for the technological tsunami that is hitting entrepreneurial small businesses.

In what is being called the Fourth Industrial Revolution – or 4IR – the pace of technological change is now so rapid that it will revolutionise pretty much everything we do and the way we work before the end of the decade.

What is the 4th industrial revolution?

Steam propelled the original industrial revolution in the late 18th century; electricity powered the second in the late 19th century and computers and preliminary automation engineered the third around the mid 20th century.

Today, artificial intelligence and machine learning are powering the fourth, which builds on the inventions of the third industrial revolution – or digital revolution – which unfolded from the 1950s to the early 2000s and brought us computers and the Internet.

4IR brings these inventions beyond the previous realm of possibility for unimaginable performance improvements with a host of disruptive technologies such as advanced data analytics, virtual and augmented reality, robotics and autonomous vehicles.

Technology, however, is only half of the 4IR equation. To thrive in the fourth industrial revolution entrepreneurial business owners must ensure that their teams are properly equipped through both upskilling and reskilling as the skills businesses need evolve.

What this means for small businesses

There is much talk in the media about how artificial intelligence will replace existing jobs. The reality, and more likely scenario isn’t that, but that your competitors who embrace artificial intelligence will be the winners. For businesses that embrace it, the fourth industrial revolution will make products and services more easily accessible and transmissible along the entire value chain. Technology will make supply chains more efficient, working hours more productive and reduce waste.

According to a McKinsey analysis, 4IR frontrunners – businesses well on their way to adopting AI and other advanced technologies by 2025 – can expect a 122% positive cash flow change whereas follower companies can expect just 10% and companies that wholly fail to adopt AI could see a 23% downturn.

The analysis also predicts the transformation in the skill sets of the workforce. Over the coming decade, it says, we will see changes in the following ways:

  • Demand for physical and manual skills in repeatable tasks like those on assembly lines will decline by 30%
  • Demand for basic literacy and numeracy skills will decline by 20%
  • Demand for technological skills will rise by more than 50%
  • Demand for complex cognitive and high-level social skills will rise by more than 30%

Operationally intense sectors such as manufacturing, transportation and retailing will experience the greatest changes because many businesses in these sectors employ large numbers of people for tasks particularly suited for automation and digitisation.

This moment now compels a decision: to lead, innovate or follow. Make no mistake however; whatever sector you operate in we have reached a tipping point which means that inaction is a surefire path to failure.

The next few months will be critical; what will your digital strategy look like and how will design it?

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