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Finally, could the development of the human cloud merely accelerate the automation of human jobs? The challenge we face is to come up with new forms of social and employment contracts that suit the changing workforce and the evolving nature of work.

We must limit the downside of the human cloud in terms of possible exploitation, while neither curtailing the growth of the labour market nor preventing people from working in the manner they choose.

It entirely depends on the policy and institutional decisions we make. One has to be aware, however, that a regulatory backlash could happen, thereby reasserting the power of policymakers in the process and straining the adaptive forces of a complex system. The importance of purpose We must also keep in mind that it is not only about talent and skills.

Technology enables greater efficiency, which most people want. Yet they also wish to feel that they are not merely part of a process but of something bigger than themselves. This is particularly the case for the younger generation who often feel that corporate jobs constrain their ability to find meaning and purpose in life. In a world where boundaries are disappearing and aspirations are changing, people want not only work-life balance but also harmonious work-life integration.

I am concerned that the future of work will only allow a minority of individuals to achieve such fulfilment. There is no doubt that emerging technologies, almost always powered and enabled by digital capabilities, are increasing the speed and scale of change for businesses. This also reinforces an underlying theme in my conversations with global CEOs and senior business executives; namely, that the deluge of information available today, the velocity of disruption and the acceleration of innovation are hard to comprehend or anticipate.

They constitute a source of constant surprise. Is there evidence of the organization and leadership capacity to learn and change? Is there a track record of prototyping and investment decision-making at a fast pace?

Does the culture accept innovation and failure? Everything I see indicates that the ride will only get faster, the changes will be fundamental, and the journey will therefore require a hard and honest look at the ability of organizations to operate with speed and agility. Sources of disruption Multiple sources of disruption trigger different forms of business impact. Examples abound.

New storage and grid technologies in energy will accelerate the shift towards more decentralized sources. The widespread adoption of 3D printing will make distributed manufacturing and spare-part maintenance easier and cheaper. Real-time information and intelligence will provide unique insights on customers and asset performance that will amplify other technological trends.

Disruption also flows from agile, innovative competitors who, by accessing global digital platforms for research, development, marketing, sales and distribution, can overtake well established incumbents faster than ever by improving the quality, speed or price at which they deliver value.

This is the reason why many business leaders consider their biggest threat to be competitors that are not yet regarded as such. It would be a mistake, however, to think that competitive disruption will come only through start- ups.

Digitization also enables large incumbents to cross industry boundaries by leveraging their customer base, infrastructure or technology. The move of telecommunications companies into healthcare and automotive segments are examples. Size can still be a competitive advantage if smartly leveraged. Major shifts on the demand side are also disrupting business: Increasing transparency, consumer engagement and new patterns of consumer behaviour increasingly built upon access to mobile networks and data force companies to adapt the way they design, market and deliver existing and new products and services.

Overall, I see the impact of the fourth industrial revolution on business as an inexorable shift from the simple digitization that characterized the third industrial revolution to a much more complex form of innovation based on the combination of multiple technologies in novel ways. This is forcing all companies to re-examine the way they do business and takes different forms.

For some companies, capturing new frontiers of value may consist of developing new businesses in adjacent segments, while for others, it is about identifying shifting pockets of value in existing sectors. The bottom line, however, remains the same. Business leaders and senior executives need to understand that disruption affects both the demand and supply sides of their business. In short, they have to innovate continuously. Four major impacts The fourth industrial revolution has four main effects on business across industries: — customer expectations are shifting — products are being enhanced by data, which improves asset productivity — new partnerships are being formed as companies learn the importance of new forms of collaboration, and — operating models are being transformed into new digital models.

Customer expectations are being redefined into experiences. The Apple experience, for example, is not just about how we use the product but also about the packaging, the brand, the shopping and the customer service. Apple is thus redefining expectations to include product experience. Traditional approaches to demographic segmentation are shifting to targeting through digital criteria, where potential customers can be identified based on their willingness to share data and interact.

As the shift from ownership to shared access accelerates particularly in cities , data sharing will be a necessary part of the value proposition. For example, car- sharing schemes will require the integration of personal and financial information across multiple companies in the automotive, utility, communications and banking sectors.

Most companies profess to be customer-centric, but their claims will be tested as real-time data and analytics are applied to the way they target and serve their customers.

Today, data and metrics deliver in quasi-real time critical insights into customer needs and behaviours that drive marketing and sales decisions. This trend of digitization is currently towards more transparency, meaning more data in the supply chain, more data at the fingertips of consumers and hence more peer-to-peer comparisons on the performance of products that shift power to consumers.

As an example, price-comparison websites make it easy to compare prices, the quality of service, and the performance of the product. In a mouse click or finger swipe, consumers instantaneously move away from one brand, service or digital retailer to the next.

Companies are no longer able to shirk accountability for poor performance. Brand equity is a prize hard won and easily lost. This will only be amplified in a more transparent world. To a large extent, the millennial generation is setting consumer trends.

It is a world of the now: a real-time world where traffic directions are instantly provided and groceries are delivered directly to your door. It would be a mistake to assume that this is confined to high-income economies.

Take online shopping in China. Tesla, for example, shows how over-the-air software updates and connectivity can be used to enhance a product a car after purchase, rather than let it depreciate over time.

Not only are new materials making assets more durable and resilient but data and analytics are also transforming the role of maintenance. Analysis provided by sensors placed on assets enables their constant monitoring and proactive maintenance and, in doing so, maximizes their utilization.

It is no longer about finding specific faults but rather about using performance benchmarks based on data supplied by sensors and monitored through algorithms that can highlight when a piece of equipment is moving outside its normal operating window.

On aircrafts, for example, the airline control centres know before the pilots do if an engine is developing a fault on a particular plane. They can therefore instruct the pilot on what to do and mobilize the maintenance crew in advance at the flight destination. In addition to maintenance, the ability to predict the performance of an asset enables new business models to be established.

Asset performance can be measured and monitored over time — analytics provide insights on operational tolerances and provide the basis for outsourcing products that are not core or strategic to the needs of the business.

SAP is an example of a company that is leveraging data from physical products embedded in agriculture to increase uptime and utilization. The ability to predict the performance of an asset also offers new opportunities to price services. Take the example of truck fleets.

Long-distance haulers are interested in propositions where they pay tire manufacturers by the 1, kilometres of road use rather than periodically buying new tires. This is because the combination of sensors and analytics enables tire companies to monitor driver performance, fuel consumption and tire wear to offer a complete end-to-end service.

This is true for incumbents and established businesses but also for young, dynamic firms. The former often lack specific skills and have lower sensitivity to evolving customer needs, while the latter are capital poor and lack the rich data generated by mature operations. This partnership gives Siemens access to a partner that can help solve complex challenges of extracting insights from vast data, while Ayasdi can validate its topological data analysis approach with real-world data, while expanding market presence.

Such collaborations, however, are often far from straightforward. They require significant investment from both parties to develop firm strategy, search for appropriate partners, establish communication channels, align processes, and flexibly respond to changing conditions, both inside and outside the partnership.

This is only as good as the weakest link in the partnership chain. Companies need to go well beyond marketing and sales agreements to understand how to adopt comprehensive collaborative approaches. The fourth industrial revolution forces companies to think about how offline and online worlds work together in practice. Accordingly, strategic planning is being challenged by the need for companies to operate faster and with greater agility.

As mentioned earlier, an important operating model enabled by the network effects of digitization is the platform. While the third industrial revolution saw the emergence of purely digital platforms, a hallmark of the fourth industrial revolution is the appearance of global platforms intimately connected to the physical world.

The platform strategy is both profitable and disruptive. Research by the MIT Sloan School of Management shows that 14 out of the top 30 brands by market capitalization in were platform-oriented companies. An increasing number of consumers no longer purchase and own physical objects, but rather pay for the delivery of the underlying service which they access via a digital platform.

This shift is a powerful one and allows for more transparent, sustainable models of exchanging value in the economy.

But it also creates challenges in how we define ownership, how we curate and engage with unlimited content, and how we interact with the increasingly-powerful platforms that provide these services at scale. Frugal business models use the opportunities afforded by the interaction of digital, physical and human realms to open up new forms of optimization such as efforts by Michelin to provide high- quality services at low cost. Data-powered business models create new revenue sources from their access to valuable information on customers in a broader context and increasingly rely on analytics and software intelligence to unlock insights.

And there are many examples of businesses pivoting towards business models that focus on employing new technologies to make more efficient use of energy and material flows, thereby preserving resources, lowering costs, and having a positive impact on the environment see Box B: Environmental Renewal and Preservation.

These transformations mean that businesses will need to invest heavily in cyber- and data-security systems to avoid direct disruption by criminals, activists or unintentional failures in digital infrastructure. The experiences of companies such as Sony Pictures, TalkTalk, Target and Barclays indicate that losing control of sensitive corporate and customer data has a material negative effect on share prices. As data become central to both decision- making and operating models across industries, workforces require new skills, while processes need to be upgraded for example, to take advantage of the availability of real-time information and cultures need to evolve.

In a world where talent is the dominant form of strategic advantage, the nature of organizational structures will have to be rethought. Flexible hierarchies, new ways of measuring and rewarding performance, new strategies for attracting and retaining skilled talent will all become key for organizational success. A capacity for agility will be as much about employee motivation and communication as it will be about setting business priorities and managing physical assets.

My sense is that successful organizations will increasingly shift from hierarchical structures to more networked and collaborative models. Motivation will be increasingly intrinsic, driven by the collaborative desire of employees and management for mastery, independence and meaning.

This suggests that businesses will become increasingly organized around distributed teams, remote workers and dynamic collectives, with a continuous exchange of data and insights about the things or tasks being worked on.

An emerging workplace scenario that reflects this change builds on the rapid rise of wearable technology when combined with the internet of things, which is progressively enabling companies to blend digital and physical experiences to benefit workers as well as consumers.

For example, workers operating with highly complex equipment or in difficult situations can use wearables to help design and repair components. Downloads and updates to connected machinery ensure that both workers in the field and the capital equipment they use are kept up to date with the latest developments.

In the world of the fourth industrial revolution, where it is standard practice to upgrade cloud-based software and refresh data assets through the cloud, it will be even more important to ensure that humans and their skills keep pace. Combining the digital, physical and biological worlds Companies able to combine multiple dimensions — digital, physical and biological — often succeed in disrupting an entire industry and their related systems of production, distribution and consumption.

The experience has been enhanced and bundled with the physical product transportation of a person from A to B by optimizing the utilization of the asset the car owned by the driver. In such cases, the digital opportunities are often not translated into just a higher price or lower cost but also into a fundamental change of the business model. This is driven by an end-to-end approach, from service acquisition to delivery. These combination-based business models illustrate the extent of the disruption that occurs when digital assets and interesting combinations of existing digital platforms are used to reorganize relationships with physical assets marking a notable shift from ownership to access.

In their markets, neither company owns the assets: a car driver owns the car and makes it available; a homeowner makes his room available. In both cases, the competitive advantage is built on a superior experience, combined with reduced transaction and friction costs.

Also, these companies match demand and supply in a rapid and convenient manner, which side steps the business models of the incumbents. This marketplace approach progressively erodes the long established position of incumbents and dismantles the boundaries between industries.

Many senior executives expect industry convergence to be the primary force impacting their business in the next three to five years. Fast-moving competitors provoke a disaggregation of the more traditional industry silos and value chains, and also disintermediate the existing relationship between businesses and their customers.

New disruptors can rapidly scale at a much lower cost than the incumbents, generating in the process a rapid growth in their financial returns through network effects. It also demonstrates the benefits of scale. In almost all industries, digital technologies have created new, disruptive ways of combining products and services — and in the process, have dissolved the traditional boundaries between industries.

The decision by Apple and Google to enter the automotive market shows that a tech company can now transform into a car company. In the future, as the value shifts towards the electronics, the technology and licensing software may prove more strategically beneficial than manufacturing the car per se. The finance industry is going through a similar period of disruptive change. P2P peer-to-peer platforms are now dismantling barriers to entry and lowering costs.

The healthcare industry is also faced with the challenge of incorporating simultaneous advances in physical, biological and digital technologies, as the development of new diagnostic approaches and therapies coincide with a push to digitize patient records and capitalize on the wealth of information able to be gathered from wearable devices and implantable technologies.

Not all industries are at the same point of disruption, but all are being pushed up a curve of transformation by the forces driving the fourth industrial revolution. There are differences according to industry and demographic profile of the customer base. But in a world characterized by uncertainty, the ability to adapt is critical — if a company is unable to move up the curve, it may be pushed off it.

The companies that survive or thrive will need to maintain and continually sharpen their innovative edge. This suggests that the global number of entrepreneurs and intrapreneurs enterprising company managers will increase. Small and medium-sized enterprises will have the advantages of speed and the agility needed to deal with disruption and innovation. Large organizations, by contrast, will survive by leveraging their scale advantages and investing in their ecosystem of start-ups and SMEs by acquiring and partnering with smaller and more innovative businesses.

This will enable them to maintain autonomy in their respective businesses while also allowing for more efficient and agile operations. Finally, as the next sections detail, the regulatory and legislative landscapes will significantly shape how researchers, businesses and citizens develop, invest in and adopt both emerging technologies and the operating models that enable them to create value for users.

While new technologies and innovative businesses offer new products and services that can improve the lives of many, those same technologies and the systems that support them could also create impacts we wish to avoid. These range from widespread unemployment and increased inequality, which was discussed previously, to the dangers of automated weapons systems and new cyber risks.

While perspectives on what constitutes the right mix of regulation may vary, my conversations with government, business and civil society leaders indicate that they share the same overarching goal: to create agile, responsible regulatory and legislative ecosystems that will allow innovation to thrive while minimizing its risks to ensure the stability and prosperity of society.

Box B: Environmental Renewal and Preservation The convergence of the physical, digital and biological worlds that is at the heart of the fourth industrial revolution offers significant opportunities for the world to achieve huge gains in resource use and efficiency. At the heart of this promise is the opportunity to shift businesses and consumers away from the linear take-make-dispose model of resource use, which relies on large quantities of easily accessible resources, and towards a new industrial model where effective flows of materials, energy, labour and now information interact with each other and promote by design a restorative, regenerative and more productive economic system.

There are four pathways that help take us there. First, thanks to the internet of things IoT and intelligent assets, it is now possible to track materials and energy flows so as to achieve huge new efficiencies all the way along value chains. IoT-enabled solutions could reduce greenhouse gas emissions by 9. Technologies such as blockchain will help make this information more trustworthy, for example by capturing and certifying satellite monitoring data on deforestation in a secure format to hold landholders to account more closely.

Third, new information flows and increasing transparency can help shift citizen behaviour on a large scale, as it becomes the path of least resistance within a new set of business and social norms for a sustainable circular system.

Fruitful convergence between the fields of economics and psychology has been producing insights into how we perceive the world, behave and justify our behaviour, while a number of large-scale randomized control trials by governments, corporations and universities have shown that this can work.

Fourth, as the previous section detailed, new business and organizational models promise innovative ways of creating and sharing value, which in turn lead to whole system changes that can actively benefit the natural world as much as our economies and societies. The fourth industrial revolution will enable firms to extend the use-cycle of assets and resources, increase their utilization and create cascades that recover and repurpose materials and energy for further uses, lowering emissions and resource loads in the process.

In this revolutionary new industrial system, carbon dioxide turns from a greenhouse pollutant into an asset, and the economics of carbon capture and storage move from being cost as well as pollution sinks to becoming profitable carbon-capture and use-production facilities. Even more importantly, it will help companies, governments and citizens become more aware of and engaged with strategies to actively regenerate natural capital, allowing intelligent and regenerative uses of natural capital to guide sustainable production and consumption and give space for biodiversity to recover in threatened areas.

In particular, they compel governments — at the regional, national and local levels - to adapt by reinventing themselves and by finding new ways of collaboration with their citizens and the private sector. They also affect how countries and governments relate to each other. In this section, I explore the role that governments must assume to master the fourth industrial revolution, while recognizing the enduring forces that are changing the traditional perceptions of politicians and their role in society.

With growing citizen empowerment and greater fragmentation and polarization of populations, this could result in political systems that make governing more difficult and governments less effective. This is particularly important as it occurs at a time when governments should be essential partners in shaping the transition to new scientific, technological, economic and societal frameworks.

More intense and innovative use of web technologies can help public administrations modernize their structures and functions to improve overall performance, from strengthening processes of e-governance to fostering greater transparency, accountability and engagement between the government and its citizens.

Governments must also adapt to the fact that power is also shifting from state to non-state actors, and from established institutions to loose networks. New technologies and the social groupings and interactions they foster allow virtually anyone to exercise influence in a way that would have been inconceivable just a few years ago. Governments are among the most impacted by this increasingly transient and evanescent nature of power.

With a few exceptions, policymakers are finding it harder to effect change. They are constrained by rival power centres including the transnational, provincial, local and even the individual. Micro-powers are now capable of constraining macro- powers such as national governments. The digital age undermined many of the barriers that used to protect public authority, rendering governments much less efficient or effective as the governed, or the public, became better informed and increasingly demanding in their expectations.

The WikiLeaks saga — in which a tiny non- state entity confronted a mammoth state — illustrates the asymmetry of the new power paradigm and the erosion of trust that often comes with it.

It would take a book dedicated to the subject alone to explore all the multifaceted impacts of the fourth industrial revolution on governments, but the key point is this: Technology will increasingly enable citizens, providing a new way to voice their opinions, coordinate their efforts and possibly circumvent government supervision.

Parallel structures will be able to broadcast ideologies, recruit followers and coordinate actions against — or in spite of — official governmental systems. Governments, in their current form, will be forced to change as their central role of conducting policy increasingly diminishes due to the growing levels of competition and the redistribution and decentralization of power that new technologies make possible. Increasingly, governments will be seen as public-service centres that are evaluated on their abilities to deliver the expanded service in the most efficient and individualized ways.

Ultimately, it is the ability of governments to adapt that will determine their survival. If they embrace a world of exponentially disruptive change, and if they subject their structures to the levels of transparency and efficiency that can help them maintain their competitive edge, they will endure. In doing so, however, they will be completely transformed into much leaner and more efficient power cells, all within an environment of new and competing power structures.

As in previous industrial revolutions, regulation will play a decisive role in the adaptation and diffusion of new technologies. Tailor your resume by picking relevant responsibilities from the examples below and then add your accomplishments.

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