We are ready for the Fourth Industrial Revolution. The past 3 to 5 years have shown the maturation and convergence of the several forces that allow this revolution to take place. This progress includes the maturing of technology, volume of data and new insights.
Also the technological development of two separate phenomena have accelerated: cellular connectivity and processing power have reached a sufficient level. 5G is forecast to account for 45 percent of global mobile data traffic by 2025 (Ericsson, 2020). As we start to utilize 5G connectivity and different types of semiconductor processors we are able to process data much faster and discover more insights from it.
We are facing a new paradigm, in which new insights can be found by analyzing both digital and analog data. Blurring the boundaries between the physical and digital world will without a doubt lead to higher productivity and profits.
Historical roadblocks of utilising 4th industrial revolution models:
- Low volume of data
- Insufficient processing power
- Lightning fast connectivity
These changes and advances in technology mean that the 4IR model is no longer a fantasy. It’s real and ready to be implemented to current processes. Yet significant amount of companies have not adopted any 4.0 industry models. There is a gap between reality and development, and closing it offers a lot to gain – especially for the manufacturing industry.
Manufacturing industry dilemma
The production of goods is stuck in the times of Henry Ford’s assembly line. But memories of the second industrial revolution won’t be growing any sweeter over time. In the past firms moved production to developing countries to utilize cheap labor. But during the past 20 years, wages in China, Brazil and Eastern Europe have increased. Because of this increase in wages, many firms have now complex, global supply chains, that provide no notable cost benefits.
The Covid-19 crisis has disrupted the manufacturing industry even further. Existing supply chains have collapsed at the same time that firms are experiencing productivity stagnation, and a dramatic disappearance or expanding of demand.
(Early adopters of 4IR models have pivoted more quickly and smoothly through the disruptions created by COVID-19.)
This unexpected situation calls for rapid and radical changes. What’s interesting, is that early adopters of 4IR models have pivoted more quickly and smoothly through the disruptions created by COVID-19.
Potential in adopting 4IR models:
- Driving growth in industries that have been stagnant
- Adopting new technologies that sky-rocket productivity and improve operations efficiency
- Mitigating supply chain risks and increasing resiliency across the global value chains
- Undoing the damage of previous revolutions and fitting profit, people and planet under the same business strategy
The future will belong to those who are able to manage uncertainty and innovate rapidly. The transformation acceleration boils down to two things – capital and knowledge.
Rewriting the business landscape as of today
Lack of budget is often mentioned in the context of people being committed to Industry 4.0 initiatives, but the underlying challenges are more complex.
But even if capital was available there are reasons to not use it. Capital industry often fails to provide long term commitment, reliability and expertise. Even the greatest capital injection will not cover for the insights, knowledge and support for rolling out disruptive changes in operations.
When capital and knowledge meet in the optimal surroundings it is possible to unlock significant value. It also allows for the modernization and de-risking of operations in order to increase revenue, and decrease costs and operational risks.
This is what we at Oak Universe excel in. Our investment strategy is to both buy and build. Investments are allocated exclusively in companies that either benefit from 4th industrial revolution transformation or enable it.
The Oak approach is active. Through a committed network of industry experts, academics and universities, we support companies throughout their upcoming 5 to 6 year journey, and increase their equity value significantly.
It’s time to start rewriting the business landscape as of today.