Software Industry Business Challenges and Impacts : The Long Process of the Industrial Revolution 4.0
We stand on the edge of the 4.0 industrial revolution that will fundamentally change the way we live, work and relate to one another. In its scale, scope and complexity, the transformation will be unlike anything humanity has experienced before.
We don’t yet know how it will unfold, but one thing is clear: the response to it must be integrated and comprehensive, involving all stakeholders from global governance, from the public and private sectors to academia and civil society.
The First Industrial Revolution used hydropower and steam to mechanize production. The second uses electric power to make mass production. The third uses electronics and information technology to automate production.
Now the Industrial Revolution 4.0 is building on the third, the digital revolution that has occurred since the middle of the last century. It is characterized by a fusion of technologies that blurs the lines between the physical, digital and biological fields.
There are three reasons why the current transformation not only represents an extension of the third industrial revolution, but rather the arrival of the industrial revolution 4.0 is far different: speed, scope, and system impact.
The current breakthrough speed has no historical precedent. When compared to previous industrial revolutions, this revolution is developing at an exponential rather than linear pace. Moreover, it has to be adapted to almost every industry in every country. With the breadth and magnitude of this change, it marks the transformation of the entire production, management and governance system.
The possibilities for billions of people connected with mobile devices, with unprecedented processing power, storage capacity, and access to knowledge, are endless.
And this possibility will be multiplied by emerging technological breakthroughs in areas such as artificial intelligence, robotics, Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing. To find out more about the pillars of the 4.0 industrial revolution in business, you can read about it in this article.
Challenges and Opportunities of the Industrial Revolution 4.0
Like the revolutions that preceded it, the Industrial Revolution 4.0 has the potential to increase global income levels and improve the quality of life for populations around the world. To date, those who have gotten the most out of it are consumers who can afford to buy and access the digital world and services.
Technology has enabled new products and services that increase the efficiency and enjoyment of our personal lives. Order a taxi, book a flight, buy a product, make a payment, listen to music, watch a movie, or play a game — all of this can now be done remotely, even for business matters such as bookkeeping, with the advent of cloud-based accounting software.
In the future, technological innovation will also lead to supply-side wonders, with long-term efficiency and productivity gains. Transportation and communication costs will decrease, global logistics and supply chains will become more effective, and trade costs will decrease, all of which will open up new markets and promote economic growth.
At the same time, as economists Erik Brynjolfsson and Andrew McAfee have pointed out, revolution can result in greater inequality, particularly in its potential to disrupt the labor market.
As a substitute for automation for labor throughout the economy, the replacement of workers by machines can exacerbate the gap between returns on capital and returns on labor. On the other hand, it is also possible that the transfer of workers by technology will, in the aggregate, result in an increase in safe and profitable employment.
In addition to being a major economic concern, inequality represents the largest social gap associated with the Industrial Revolution 4.0. The biggest beneficiaries of innovation tend to be providers of intellectual and physical capital — innovators, shareholders, and investors are responsible for the growing gap in wealth between those who rely on capital versus labor.
Therefore, technology is one of the main reasons why incomes have stagnated, or even declined, for the majority of the population in high-income countries: the demand for high-skilled workers has increased while the demand for low-educated and low-skilled workers has decreased.
This helps explain why so many workers are disillusioned and fearful that their own income and that of their children will continue to stagnate or will not find work.
It also helps explain why the world’s middle class is increasingly experiencing feelings of discontent and injustice.
Dissatisfaction can also be fueled by the spread of digital technology and the information-sharing dynamics that social media characterizes. More than 30 percent of the global population now uses social media platforms to connect, learn and share information.
In an ideal world, these interactions would provide opportunities for cross-cultural understanding and cohesion. However, they can also create and propagate unrealistic expectations of what constitutes success for an individual or group, and offer opportunities to spread extreme ideas and ideologies.
Impact on Business
There is clear evidence that the technology that underpins the Fourth Industrial Revolution is having a huge impact on business. On the supply side, many industries are seeing the introduction of new technologies that create entirely new ways to serve existing needs and significantly improve the value chains of existing industries.
But it also has an impact on your competitors who may be far more innovative thanks to access to global digital platforms for research, development, marketing, sales and distribution, able to overthrow established incumbents faster than ever by increasing quality, speed or price.
A major shift on the demand side is also taking place, along with increased transparency, consumer engagement and consumer behavior patterns that are increasingly built on internet access and mobile data. This is forcing companies to adapt the way they design, market, and deliver products and services.
The main trend is the development of technology-based platforms that combine demand and supply to develop existing industry structures, as we see in “sharing” or “on demand” economies.
This technology platform, made easy to use by smartphones, aggregates people, assets and data, creating a whole new way of consuming goods and services in the process.
In addition, they lower the barriers for businesses and individuals to create wealth, transforming the personal and professional environment of workers. This new platform business is rapidly expanding into many new services, from transportation to shopping, from work to parking, from massage to travel.
Overall, there are four main effects that the Industrial Revolution 4.0 has had on businesses. Namely on customer expectations, on product improvement, on collaborative innovation, and on organizational form.
Whether consumers or businesses, customers are increasingly at the center of the economy, all of which has to do with improving the way customers are served. In addition, physical products and services can now be enhanced with digital capabilities that increase their value.
New technologies are making assets more durable and enduring, while data and analytics are changing the way they look for opportunities.
Customer experience, data-driven services, and asset performance through analytics, require new forms of collaboration, especially given the speed at which innovation and disruption occur. And the emergence of global platforms and other new business models that ultimately means that talent, culture and organizational form must be rethought.
Overall, the inevitable shift from simple digitization (Industrial Revolution 3) to innovation based on a combination of technologies (Industrial Revolution 4.0) is forcing companies to reexamine the way they do business. But the bottom line is the same: business leaders and senior executives need to understand their changing environment, challenge the assumptions of their operating team, and innovate relentlessly and constantly.
Bookkeeping in the Industrial Revolution 4.0
Overall the industrial revolution 4.0 also has an impact on the process of accounting and financial records in businesses. With the advancement of technology and the development of business needs, bookkeeping is no longer just recording transactions and seeking profit and loss in business.
Bookkeeping and accounting in businesses have developed into definite data on the health of a business, parameters that are an indication of whether or not the business is good.
With good bookkeeping, you can also make your business grow quickly, because bookkeeping can map financial problems that occur such as spending efficiency, preventing fraud, and making other important decisions based on available financial reports.
This financial report will also be useful if you collaborate with external parties in investment or you plan to go public for your company.
To make all that easier, you need an easy, safe, fast, and precise bookkeeping system that can accommodate all business needs. You can use accounting software such as Accurate Online which has the most complete features and can be used anytime, anywhere.