The Fourth Industrial Revolution: Change, Learning, and Action
“The only way that we can live is if we grow. The only way that we can grow is if we change. The only way that we can change is if we learn. The only way we can learn is if we are exposed. And the only way that we can become exposed is if we throw ourselves out into the open. Do it. Throw yourself.” ― Joy Bell
I like this quote for a number of reasons. First and foremost is the meaning of the message itself: it mentions life, change, learning and being willing to be exposed. But lastly and most importantly, it calls for an action to occur. Reading something and acting upon it can be two different things.
For those keeping score the Third Industrial Revolution – the digital age, occurred in the mid-20th century which primarily was about computerization. The Fourth Industrial Revolution that we are experiencing today builds on this first wave of computerization with the latest, rapidly evolving and disruptive advances in technology. This includes the Internet of Things, robotic processes in automation, autonomous vehicles, 3D printing, cyber-physical systems and connected wearable devices. As these sophisticated tools and technologies begin to converge, the impacts of the Fourth Industrial Revolution are beginning to become more evident across many industries. How about the steel industry?
I spoke, by invitation, at a roundtable discussion in New York hosted by Morgan Stanley a few weeks ago. The topic? The state of the steel industry and what we anticipated in the future. I was the sole West Coast representative at this roundtable, and I realized this: in California, we live with very different circumstances than the rest of the country.
Many of the companies across the country have established themselves in regions and into markets for generations – for example, the auto and appliance industries, huge steel consumers. There are company towns located throughout the country where everyone in the towns works for a company. In California we have more of a diverse manufacturing base also with a workforce that is more transient. It is not generational. So when companies back East or in the Midwest have to close or move their production processes overseas, the effect can be devastating on the entire region.
Speaking at the roundtable, I was amazed at how much the rest of the country was impacted by the economic recession. The Morgan Stanley investors wanted to know “how long” we thought the downturn would last and how the steel industry would fare through it all. Those are both tough questions to answer. In California we don’t rely upon one dominant industry so the effects of the downturn are not as one dimensional as with other regions. Secondly, California is not a large steel producing area as opposed to other parts of the country. So the downturn in the steel industry does not directly affect us as much because due to our location we are more impacted by imports and the global markets.
When we discuss the Fourth Industrial Revolution concept, I think the steel industry is lagging behind. From a manufacturing perspective, there are advances, but in other parts of the globe where steel mills are popping up with great frequency, they incorporate the latest technological advances to provide less expensively made products. This has a disruptive effect on our steel markets – where we now have become uncompetitive. Steel distributors have incorporated advanced technology for traceability and inventory purposes as well as customer usage and predictability. End users in manufacturing are employing automation (robots) in their production processes which will serve to cut labor costs and requires suppliers to play a bigger role in their operations. Information technology provides companies with more and more information to help them improve efficiencies and anticipate needs. The more customers I speak with understand that they must change with the times, or they will ultimately fail.
When I left the roundtable discussion, I thought there were far more questions raised than answers provided. I realized that this Fourth Revolution that we are on the forefront of will be here, ready or not. It does bring me back to my original quote: it is essential to change, to learn, and to be exposed. It’s the throwing myself out into the open that I struggle with. So I chose instead to just board a plane and return to sunny California.