August 10, 2017    8 minute read

The Four Challenges of the Fourth Industrial Revolution

Managing Upheaval    August 10, 2017    8 minute read

The Four Challenges of the Fourth Industrial Revolution

The evolution of global industries to Industry 4.0 (Rev 4.0) is both exciting and scary. Industry 4.0 is the designated code name for a combination of traditional manufacturing practices and industrial processes with technological capabilities, from automation to AI. From factories becoming self-monitoring to delivery vehicles becoming self-driving. Whilst there are many benefits of Industry 4.0, there are several key challenges that lie ahead.

Cybersecurity

Having everything attached to everything else in the Internet of things (IoT) is going to monumentally increase the vulnerabilities present in any given network. With more nodes, connections and burden of connectivity, systems are going to have to be more secure. Rev 4.0 will usher in more calls for greater cybersecurity.

Placing more of one’s processes online, digitising what would be manual tasks for example, places a bigger target on one’s back for attackers. Whilst the motivations of assailants cannot be controlled, from political to economic purposes, companies must match their automation, digitisation of processes with stronger and smarter cyber security practices.

To take one criteria as an example, using Big Data to augment digitised processes, such as using data to predict buying trends that then feeds a factory’s production queue with quotas, presents a unique challenge. Companies have a duty to protect that data and thus must secure all transmissions of that data, ensuring all nodes on the network, from the manufacturing robots to the data controller’s terminal, are secure.

Hacking

When one considers the changing nature of security threats, from employees connecting personal devices to company networks to brute force attacks from hackers, the situation is further complicated, and thus the sophistication in risk identification and neutralisation has to change with it. While data can be lost or stolen through employees, either inadvertently or intentionally, the biggest attacks in the last five years have been as a result of hacking.

Attackers can also damage systems and may seek to map a company’s network or establish a persistent presence. This can enable hackers to interrupt AI controlled systems or install software that harms individual processes by stalling, rewriting or destroying data. For example, if a hacker could access an automated manufacturing process, they could damage the company’s ability to produce goods.

At the lower end of the scale, attackers can also deny services, interrupt product use and stall consumers from using their purchased software, services or other items. An example of this type of attack is the Distributed Denial of Service (DDoS) attack. At their most basic level, DDoS attacks work by sending a high volume of data from different locations to a particular server or set of servers utilised by the company. As a result of the limited number of requests that the servers can handle, these attacks overwhelm the servers causing them to slow significantly or fail altogether, seizing up and subsequently denying the service to users.

While DDoS attacks are certainly nothing new, what makes these attacks so stark is the attackers’ exploitation of security weaknesses and vulnerabilities in thousands of devices to launch the attacks. Without addressing the vulnerabilities that exist in these systems, these types of widespread outages may be more common in the future, particularly as the devices become increasingly complex in their structure and how they interact.

Risk Assessments

Companies will need to map their networks, assessing the risk and critical factors relating to security. Such an assessment should examine accessibility to systems, for example, possible threats from internal sources, from disgruntled employees to internal human error, and external sources including hackers. Further, it is necessary to examine the value of processes and assets, from machinery to intellectual property, ensuring that there is insurance, security measures and that any vulnerability is sufficiently identified.

Once such an activity is conducted, designing an action plan for responding to cyber security threats, including backing up data, locking off operations so attackers cannot reach them and using strong shielding software, is necessary to provide additional protection. Furthermore, routinely maintaining systems, briefing your experts with updates and making sure the workforce is diligent in using the systems will go a long way to reducing vulnerability.

Digital Infrastructure

A key issue will be latency, that is the delay between two machines communicating, as machine to machine communication (M2M) requires instantaneous connection, latency, even a split second of delay, can cause untold damage to a process, slowing the entire system down and causing targets to be missed, resulting in loss of value. More access points will naturally burden the network, thus high-speed connections and a strong, clear infrastructure will be necessary to not only take advantage of  Rev 4.0 but also facilitate stronger benefits.

Impact on Work

Firstly, the Rev 4.0 will lead to the disintermediation of some work, mostly impacting older workers with fewer resources and time to retrain. It will shift work into the hands of those who can carry out maintenance, both physically and in the cyber realm. This displacement of work, increasing the requirement of cyber security professionals, coders, programmers, project managers, dedicated machine staff and personnel, also necessitates that all employees working within the network will have to have adequate training and certification to be an effective biological component in the new machine.

Secondly, in regards to training, businesses will need to sure up their employee base with the necessary skills to work in the new environment. An employee that cannot adequately use the new technology mitigates any advantage gained from having that technology. Moreover, there will be resistance in encouraging employees to embrace Rev 4.0, particularly if the technology replaces their co-workers.

This could also present a challenge to the culture at a firm, reducing employee count, spreading less employees over more departments could create a culture shift, especially if there is a Rev 4.0 expert, for example specialist staff, worker divide. Companies would be well placed to offset such feelings by raising spirits through catalysing employee growth, encouraging company social events and offering more opportunities to develop.

As touched upon, the issue with intelligent machines replacing humans is that no human can compete with the machine for the job. Whilst this currently does not include emotional intelligence and is limited to routine and low-level jobs, machines in these positions need no holidays, suffer no sickness with no personal or family issues warranting time away from employment. The rise of the automated workers is strengthened by the efficiency they bring, ultimately trickling value to shareholders.

Shareholders

The shareholder primacy principle, that a company is predicated on creating economic value for its investors, promotes hastily adoption of new automation, since replacing workers is different than companies simply streamlining by way of redundancy. Instead, it is a way of eliminating jobs without depleting a firm’s capacity to deliver economic value over time as there is no downtime between restructuring and restarting production.

This joblessness also creates a further issue; a difficulty with retraining, particularly with older workers. Especially with the pace of technological innovation, those left unemployed and replaced by the automated machinery will find it difficult to find work within the same sector/skill level.

As a result, they will be compelled to acquire new skills. Even if one would continue working alongside these machines, employers could experience a skills-gap, as workers lack the necessary knowledge to be able to work efficiently with the new machines, potentially undoing the expected efficiency boost as workers slow down the entire process by inefficiently using the machines.

Legal Issues

If speculation surrounding the power of automation to create mass, technological unemployment becomes a reality, one could see a strengthening of employment laws. This could include advancement enforcement of requirements to retrain rather than make redundancies.

The advanced use of data by machines that are interlinked and infinitely connected causes concern for data protection, especially data transferred across state boundaries. One recent example, augmented by cybersecurity law, is a factory, owned and operated by a foreign company in China.

Using the Rev 4.0 model, a self-monitoring factory producing goods in China using data on forecasting and shipping data to complete orders could cause trouble, especially if data has to be transmitted outside of China (as is banned, with some exceptions, under Chinese Law). What’s more, granting AI access to large data pools could cause data leaks if one is not careful, thus laws regulating the level of access that machines can hold will be necessary. For example, it is not necessary for a self-driving forklift to access consumer data.

Furthermore, companies using third-party machines in their factory present difficulty for data arrangements. Consumers could consent to Company A, a supermarket using their data, but not Company B, a Rev 4.0 manufacturer, or Company C, an automation provider for Company B, yet all three companies would have access to the data through the machines they would use, either as an operator of machinery or an observer. Laws regulating the transfer of data already exist, but these will likely be tightened up, especially with the EU GDPR focusing on consumer rights.

Laws regulating liability for autonomous machines and their users will be a necessity. Vicarious liability (where a boss is held responsible for an underling’s actions) appears inoperable here as a machine is incapable of legal personality, so how accidents, negligence and otherwise poor practice will be regulated is another question for legislators.

Conclusion

As Prometheus stole fire and gifted it to humanity, it is important to be careful with these endeavours. Undoubtedly, the capability of advancing technology has the potential to, and certainly will, transform the world . From cybersecurity to legal challenges, Rev 4.0 brings both benefits and obstacles that must be harnessed to truly succeed in the fourth industrial revolution.

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