Industry 4.0

Industry 4.0 (aka, The 4th Industrial Revolution), which some write off as marketing click-bait, has very real implications for our global economy as it begins to take form. The digital world is advancing at an accelerated rate with the development of increasingly complex semiconductor technology (aka digital chips) at the core of the prolific improvements we're seeing in virtually every sector.

The technology sector itself is becoming increasingly difficult to define, with every major enterprise digitally optimizing its product offering in some way. Hyperscale computing (high volume & velocity data centers) have taken over our economy with cloud computing, big data, the internet of things, and artificial intelligence (AI) constituting the defining technologies of this contemporary industrial revolution.

The usefulness of advanced technology was illuminated during the pandemic lockdowns. The ability to work, unwind, socialize, and even order groceries remotely is a result of this advancing technological wave, which the pandemic accelerated by 10 years in a matter of 10 months.

To understand where we are today, we must look back at the road that led us here. To understand the 4th industrial revolution (Industry 4.0), we must examine the prior 3.

The 1st Revolution

The 1st industrial revolution started in the mid to late-1700s with the steam engine, which has been the framework for energy sources since. Mechanization was also an underlying theme, with huge leaps and bounds made in textiles that changed the sale of cloth from small street vendors into a global industry.

This revolution was an enlightenment of innovative thinking that stimulated the next two and a half centuries of prolific advancement in technology.

The 2nd Revolution

The 2nd industrial revolution began in the late 1800s and can be symbolized by modern electricity, the light bulb, and Henry Ford’s assembly line. We all hear about Benjamin Franklin’s discovery of electricity back in 1752, with the kite and key experiment that not only shocked him but the entire world.

Thomas Edison was the first one to be able to harness this power and distribute it with the first coal power station called the Edison Electric Light Station, which opened in 1882 in London. The first power plants were used only to power light bulbs, but as we know, power uses have gone far beyond this.

Nikola Tesla’s invention of alternating currents (AC) in 1888 further revolutionized electricity making it more efficient and allowing it to travel much further distances. AC is the type of electricity that powers almost everything today. Tesla, Inc was named as such to honor Nikola Tesla and his development of the first AC motor, which powers these electric vehicles 130 years later.

The Digital Revolution (The 3rd Revolution)

Electricity was the stepping stone needed for the 3rd industrial revolution, also known as the digital revolution. The shift from analog technology to digital electronics began in the mid-20th century and redefined everything the world thought it knew. This marked the beginning of the information age.

This was the age in which the computer was invented, and the era that the internet was born. We have all been alive through this era and have become accustomed to the rapid evolution of technology, which has only seemed to accelerate with time.

The internet’s ability to obtain, hold and create information has changed the world in which we live. Information is so readily available that whenever a disagreement arises, the phrase “Google it” will generally be mentioned in the first 10 seconds, and the argument can be resolved in the blink of an eye.

The computer and the internet have both laid the groundwork for the next industrial revolution. A revolution that will once again change the world.

Industry 4.0

Industry 4.0 is the next iteration of our advancing global economy in which digital technology connects everything and everyone, optimizing microeconomic business operations by leveraging ubiquitous real-time macroeconomic data. 

This economic acceleration is piggybacking off the Digital Revolution of the late 90s (end of 3rd Industrial Revolution), as hyper-scaling technology reaches an inflection point of prolific growth (Moore’s Law underlining this understanding).

Artificial intelligence (AI) will play an integral role, and we already seeing ubiquitous adoption of the most basic generative AI (Chat GPT), which has proven its ability to effectively augment human labor. In fact, this still nascent technology has the ability to replicate an individual human well enough to fool even close family members with little more than a few audio and video recordings.

The world we live in is changing at a pace that humanity has never seen before and to keep from being obsolete we need to learn to quickly adapt & adopt in this period of digital enlightenment. The future is coming fast and in order to ride this digital tidal wave into prosperity businesses need to stay abreast of the economically disruptive tech coming to market and effectively leverage it to optimize operations.

Key Technologies Involved:

  • Internet of Things (IoT)
    • Digitally connecting everything and everyone
  • Automation
    • Machine Learning (ML) & Artificial Intelligence (AI)
    • Augmenting fallible human labor
  • Highspeed Computing
    • Hyper-scale Data Centers  
    • Quantum Computing
  • Big Data
    • Metadata (uniform online data organization, data within data)
    • Predictive AI
  • Metaverse Tech
    • Augmented Reality (AR)/Virtual Reality (VR)/Extended Reality (XR)
  • Web3 
    • The next iteration of the internet
    • A digitally autonomous environment run by the users and profited from by the users
  • Blockchain
    • The basis of cryptocurrency and smart contracts
    • Making trustless transactions possible, taking the need for a 3rd party intermediary out of the equation
  • Sustainable Clean Energy

Moore’s law underpins Industry 4.0’s economically optimizing ubiquitous digital adhesive that humanity is on the precipitous of. Universal unsiloeing of real-time/historical data, providing digital visibility and foresight, will likely mark the inflection point of this impending technological renaissance.

Moore’s Law

The co-founder of Intel, Gordon Moore, prognosticated that integrated circuits (aka, semiconductors, digital chips, ETC) — which are at the heart of every digital device we touch from your iPhone to your electric toothbrush, would half in price, double in capacity & computability every ~2 years (logarithmic technology advancement). 

This hypothesis of prolific technological development has held true for over 5-decades with boundless competition-fueled chip innovations from industry leaders like NVIDIA, AMD, & TSMC (Taiwan Semi) continuing to support Moore’s Law half a century after it was coined. 

Inflection Point

The inflection point is the point at which growth/adoption of a specific technology becomes prolific as a result of ubiquitous necessity. Mass adoption of technology (25% market penetration) and the years it took to get there (from commercial inception) are illustrated below:

  • Telephone ~1950s (50 years)
  • TV ~1960s (22 years)
  • Internet ~1990s (7 years)
  • iPhone ~2010 (2.5 years)

Connecting Everyone & Everything

Today, there are more than 5 billion active internet users (daily interaction) accounting for roughly 65% of the world’s total population, more than double the number of users in the past decade. At the same time, 6.65 billion people have a smartphone accounting for 83% of the world population (though many don't have the same access to mobile broadband/WiFi networks and digital infrastructure that the US & other developed countries have). People around the world are becoming increasingly reliant on the internet for software and storage, creating a massive market for cloud computing.

There are roughly 14 billion mobile devices, as the exploding reliance on IoT devices connects everyone with everything. IoT devices include any connected tool/devices from smart homes to supply-chain tracking/monitoring tags.

All these internet-enabled devices (working on hyperfast broadband networks) are creating a profusion of new data that is on pace to double in total size every 18 months. Nielsen's Law of Internet Bandwidth (first deposited in 1982) suggests that connection speeds improve by ~50% annually, and this theory has held for over 4 decades now.