Human history has seen three distinct phases of industrial revolutions. The first which covered the period from 1760 to 1840 featured transition to new production processes resulting in a movement away from hand/manual methods of production to machinery driven by coal, water and steam power. The second industrial revolution also called the technological revolution took place between 1840 to the commencement of WW1 and was characterised by a phase of rapid industrialisation, advances in manufacturing and production technologies and processes.  It resulted in the convergence of energy and communications, the emergence of mass production and introduction of assembly line processes.

The third industrial revolution which is also known as the digital revolution saw mechanical and analogue technologies being superseded by digital technology. Covering the period from the late 1950s to the present, it has been characterised by computer technology and automation processes.

Now humanity is said to be on the verge of what is being described as the fourth industrial revolution or Industry 4.0. This revolution is characterised by accelerated automation processes and data exchange manufacturing technologies. The fourth industrial revolution is associated with key attributes such as cyber-physical systems or artificial intelligence, the internet of things, 3D Printing and cloud computing which are all underpinned by the broader dynamics of information and communication technologies (ICTs).

The recently released World Economic Forum report – The Global Information Technology Report 2016 Innovating in the Digital Economy assesses and provides an overview of the state of networked readiness of some 139 economies using the Networked Readiness Index (NRI) and examines the role of ICTs as a driver of innovation. The economies covered by the study account for an impressive 98.1 per cent of global GDP. This column will review Australia’s overall standings and what lessons businesses in the printing and associated industries can draw from the overall themes and findings emanating of the report.

Lessons and pitfalls of the fourth industrial revolution

The report cites the exponential speed of developments; disruption across all major industries; and the impact on entire systems of production, management and governance as what differentiates these developments from previous instances of “industrial revolutions.”

Ominously the report states that while these developments are expected to usher in benefits they also carry certain risks. If the opportunity is managed well they have the potential to foster innovation that will drive economic growth and social impact. If mismanaged the report expresses concerns that the benefits could be derailed due to rising threats of cyberattacks expanding into the physical world, privacy issues and the polarising effects of technologies on labour markets.

Economies and businesses that embrace these developments, anticipate the challenges, and effectively deal with them in a strategic manner are more likely to prosper compared to those who don’t who are expected to lag behind. With ICTs forming the backbone of the new industrial revolution, the Report stresses that the future of national economies and businesses will hinge more than ever on whether they successfully embrace digital technologies. Yet many of those who stand to gain the most from digital technologies are not yet connected – they have not yet joined the ICT revolution.

Key findings

A number of critical messages for policy makers are conveyed by the Report. Firstly, innovation is increasingly based on digital technologies and business models which have the potential to drive economic and social gains from ICTs if channelled in an appropriate way.

Secondly, encouraging businesses to fully embrace digital technologies should become a priority of governments as such an embrace enables businesses to utilise ICTs for their development. Businesses will also face increasing pressure to innovate on continuous basis.

Thirdly there is a need for both the private and public sectors to step up efforts to invest in innovative digital solutions as a means of driving social impact. Businesses and governments are missing out on the opportunities associated with a rapidly growing digital population.

And finally, the achievement of a sustainable digital economy is said to depend on the presence and operation of quickly evolving governance frameworks that will adapt to, anticipate and shape the impact of emerging digital technologies.    

The Networked Readiness Index (NRI)

This index measures the capacity of economies to leverage ICTs to achieve increased competitiveness and prosperity. To derive the NRI for an economy four main categories (subindexes) 10 subcategories (pillars) and 53 individual indicators distributed across the different pillars are considered. The main categories and subcategories include:

A: Environment subindex

             Political and regulatory environment (9 indicators)

             Business and innovation environment (9 indicators)

B: Readiness subindex

             Infrastructure (4 indicators)

             Affordability (3 indicators)

             Skills (4 indicators)

C. Usage subindex

             Individual usage (7 indicators)

             Business usage (6 indicators)

             Government usage (3 indicators)

D. Impact subindex

             Economic impacts

                 (4 indicators)

             Social impacts (4 indicators)

The table below displays the top 10 countries and economies that are best positioned to capitalise on the digital revolution and their overall preparedness to benefit from the emerging fourth industrial revolution. Australia while lying in 18th position in the overall rankings is placed in the table for comparative purposes. It is worthy to note that no new economies have penetrated into the top 10 NRI performers but there have been changes within the top 10 grouping. Significantly, Australia is reported to have slipped two places from the 2015 rankings.

Australia’s rank

When it comes to the main categories and subcategories of the NRI the Australian economy is ranked as follows. For the overall environment subindex Australia is ranked 16th. For the political and regulatory and business and innovation environment pillars it is ranked 9th and 23rd respectively. For the readiness subindex Australia is ranked 10th and for the infrastructure, affordability and skills pillars it is ranked in 7th, 57th and 13th positions.

For the usage subindex Australia is ranked 22nd and for the individual usage, business usage and government usage pillars it occupies 13th, 24th and 22nd places. Finally for the impact subindex Australia is ranked 21st and for the economic impacts and social impacts pillars it occupies 23rd and 9th positions.

The Report notes that while Australia has a stable overall score, it has slipped two places to occupy 18th position in the NRI for 2016. Improvements in terms of environment (up one to 16th) are offset by deterioration to the Australian economies level of readiness, especially in the pillar of affordability, where fixed broadband subscriptions remain relatively expensive (ranked 100th worldwide).

While individual usage has increased and the Australian government and public sector are acknowledged as among the leaders in the world in providing online services and facilitating their citizens e-participation, the Report states there is room for improvement when it comes to the level of business adoption of ICTs (ranked 28th).

Other identified gaps include venture capital availability (where the Australian economy is ranked 40th worldwide) and the creation of new business models via ICTs (ranked 41st).

The radar chart below depicts the performance of the Australian economy compared to the high income economy group average that it belongs to. The indicators below are measured and presented on a 1-to-7 scale basis where 1 and 7 correspond to the worst and best possible outcomes respectively.

Key messages for printing industry

Participants in the printing industry should take a lot of heart from the findings of the Report which finds that the underpinning framework for the fourth industrial revolution is information and communication technologies (ICTs).

Printing is not only an integral part of the ICTs framework but it is also associated with some of the new developments and processes that are helping reshape the technological and industrial landscape such as 3-D Printing.

For a sector that employs more information technology personnel than any other sector in manufacturing, the printing industry is well positioned to reap certain economic benefits from the fourth industrial revolution. Unlike other sectors that have commenced the digitalisation and automation process that process commenced in the printing industry decades ago with the onset of digital printing and automated workflow processes.

The printing industry must continue embracing technological change which will be digital in nature and engage in innovation by embedding new and emerging technologies to help improve existing products, processes and business models as well as create and establish new ones.

The Report stresses that staying ahead of the curve is becoming more and more crucial for business survival and firms are expected to face increasing pressure to innovate on a continuous basis given there are economic benefits to be derived by innovators and early adopters.

Conclusion

Latest issue of The Global Information Technology Report shows the Australian economy has slipped two places to be ranked overall 18th in the Networked Readiness Index (NRI). The NRI is a measure of how well an economy is positioned to economically benefit from the onset of the fourth industrial revolution.

The Report asserts that those economies that are able to foster digital activity will continue to see new industries emerge as well as experience the accelerated development of their traditional sectors.

The importance of having appropriate networks to drive and facilitate innovation and devising appropriate governance frameworks and regulations to manage the impacts of emerging technologies are seen as critical conduits for the fourth industrial revolution – the digital revolution.

Digital technologies have been impacting on the printing industry for decades and the industry has evolved having weathered some of the disruptive elements of the technology.

The printing industry has undergone massive consolidation and rationalisation efforts and while the process is ongoing, the industry finds itself in a reasonably good position to leverage the opportunities that are being created by the digital revolution.  

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