The time to act is now, don’t be left behind by the Fourth Industrial Revolution

In a global environment of unprecedented uncertainty and market volatility, we have reached a turning point of transformative change. We have entered the Fourth Industrial Revolution (4IR) where the technological megatrends of connectivity, intelligence and flexible automation have upended traditional manufacturing approaches and transformed production. The time to act it now. While industry leaders have been piloting 4IR initiatives in manufacturing, many have been unable to integrate new technologies to realise significant benefits.

The World Economic Forum (WEF), in collaboration with McKinsey & Company, scanned more than 1,000 leading manufacturers to identify the few factories that have successfully implemented 4IR technologies and are true guiding lights through this time of volatility: lighthouses. Through our work we have identified sixteen lighthouse sites which have delivered a step-change in manufacturing performance.

Today, in collaboration with WEF, we have released the full insights, learnings and characteristics from these lighthouses which are presented in our newly released white paper, detailing these Beacons of Technology and Innovation in Manufacturing.

Lighthouses are very rare. In fact, since we released our initial insights from a first wave of research in September, seven additional lighthouse sites have been identified. 

What makes these lighthouse sites so rare? These businesses, ranging from established global blue-chip companies to SMEs with fewer than 100 employees, serve as real-world evidence to dispel widespread myths and misunderstanding posing obstacles to the adoption of innovative technology at scale. They have demonstrated how forward-thinking engagement of technology can create a better, cleaner world through new levels of efficiency in manufacturing.

Lighthouse sites represent both large and small companies and can be found in emerging and developed economies. There a several differentiators and success factors that we can learn from these deacons of light:

• Injectors of human capital – rather than displacing workers with machines, lighthouses are transforming work to make it more interesting, less repetitive, diversified and more productive. They focus on capability-building through upskilling, which ensures employees learn the basics of new digital use-cases.
• Resetting benchmarks – they have moved beyond continuous improvement and instead are making a change that resets benchmarks in productivity, agility and mass personalization.
• Open innovators and collaborators – they engage a trisector innovation system comprising business, government and the social sector, including academia.
• High impact with minimal displacement of equipment – most were created by transforming existing brownfield operations, optimizing existing infrastructure and augmenting it with new machinery.

These lighthouses also have employed five value drivers to create impact at scale using 4IR technologies and have demonstrated four distinct capabilities that serve as scale-up enablers. Our whitepaper outlines these and provides perspectives from lighthouses that exemplify these value drivers and enablers.

Clearly, lighthouses have the edge over the competition. We are facing the same risks as in the first internet revolution where a few disruptors amassed most of the value creation. The smart follower strategy is not working and the gap is widening, with nine out of ten companies already being 12 months or more behind these lighthouses.

Global leaders must address the opportunities and threats presented by technology head-on, take control and build for scale. It is a case of innovate the production system and the end-to-end value chain or fall behind – the time to act and reap the rewards of the Fourth Industrial Revolution is now.