Senior business executives and government agency leaders are aligned to Fourth Industrial Revolution (Industry 4.0) opportunities, but remain challenged by a lack of preparedness across New Zealand.
Characterised by the coming together of physical and digital technologies, Industry 4.0 spans analytics, artificial intelligence, cognitive computing and the Internet of Things (IoT).
Yet according to Deloitte research - which surveyed 1,600 C-level executives across 19 countries including New Zealand - roadblocks exist when extracting long-term value across society, strategy, the workforce and technology investments.
“In an environment of unparalleled global connectivity it is a time of great opportunity, but also risk,” Deloitte New Zealand CEO, Thomas Pippos, said.
“We developed this research to better understand how executives are navigating this pervasive shift, and to uncover areas where they can more effectively influence how it impacts their organisations and society.”
Overall, the research revealed that executives are in the early stages of readying organisations to harness the full potential of Industry 4.0, with both Kiwi and global markets still grounded in the early adoption stage.
“We believe those who take a broad view will be the ones to succeed in this new era,” Pippos added.
“They will see connections between business and social needs; between financial outcomes and innovative strategies; between workforce productivity and people’s sense of stability and well-being; and between integrating existing technologies and creating completely new solutions.”
Delving deeper, the research focused on four major topics: social impact, strategy, talent/workforce and technology.
“The results indicate that while executives conceptually understand the changes Industry 4.0 will bring, they are less certain how they should act to benefit from those changes,” Pippos added.
And in each of the four areas of impact, the survey uncovered some degree of contradiction.
In examining the technological landscape, Pippos said executives understand they need to invest in technology to drive new business models.
“However, they have a hard time making the business case to fully address Industry 4.0 opportunities because of a lack of internal strategic alignment and short-term focus,” Pippos said.
From a social impact perspective, executives see a more stable future with less inequality, but are less confident about the roles they or their organisations can play in influencing society in an Industry 4.0 era.
Specifically, 87 per cent of executives believe Industry 4.0 will lead to more social and economic equality and stability, and two out of three believe business will have much more influence than governments and other entities in shaping this future.
However, less than a quarter believe their own organisations can influence key societal factors such as education, sustainability and social mobility.
Honing in on strategy, executives acknowledge they may not be ready to harness the changes associated with Industry 4.0, but these reservations have not compelled them to alter their strategies.
Just 14 per cent are highly confident that their organisations are ready to fully harness the changes associated with Industry 4.0.
“But many executives are sticking with a focus on traditional domains (i.e., developing products and increasing productivity) instead of shifting their focus toward developing talent and driving competitive disruption that could spur innovation and create value,” Pippos explained.
Meanwhile, executives are not confident they have the right talent to be successful in Industry 4.0.
However, they feel they are doing all they can to build the right workforce, despite talent ranking low on their list of priorities.
Only a quarter are highly confident they have the right workforce composition and the skill sets needed for the future, while 86 per cent are doing everything they can to create a workforce for Industry 4.0.
Yet, responses indicate that HR topics remain a low priority, other than aiming to increase worker efficiency.
“For companies that have placed Industry 4.0 talent implications high on their priority list, they are exploring the potential for new roles,” Pippos added.
“They allow people to play to their strengths while leveraging technology for greater innovation, alternative work environments, and new approaches to learning and development.”