The Big 4 report on global 4.0 progress annually; however, they’re not always leaving readers with the same impressions.
In February 2018, the Deloitte report (as summarised in Forbes magazine) leant towards translating executives’ feelings and perceptions. In contrast, Strategy PwC asked them primarily about their attempts to implement Industry 4.0 and the progress they are making. The Deloitte report collated data from 1,600 executives globally from companies with revenues greater than £1B and conducted in-depth interviews with leaders from mainly industrial companies. The PwC summarised responses from 1,155 executives in 26 countries from mainly manufacturing, equipment and engineering sectors.
Both reports grouped leaders by the three major global regions: Americas, EMEA and APAC.
Forbes summarised the Deloitte report thus; generally speaking, executives in the Americas are confident, believe human input will stay relevant and that technology implementations can deliver key competitive differentiators. In contrast, APAC executives are less optimistic and less ready to act as stewards for their organisations during this time of change (8% versus 33% globally). This may be because Asian executives expect Industry 4.0 to bring about bigger changes in labour markets than their global counterparts as a relatively high proportion, versus other regions, believe that 4.0 will bring about social upheaval.
Finally, EMEA executives are described as “right in the middle” on issues such as the outlook for Industry 4.0, the role of a human in this society and executive readiness to lead their companies through this change. One area where EMEA scores slightly higher than the global average is the “ability to influence delivering strong financial results in the long-term”.
Contrasting these summarised findings with excerpts of the PwC report, it looks like perceptions and reality are similar but different things. What did we find out?
- While Deloitte labels the American executives as the most “confident”, PwC reports that APAC is leading the way to digitisation. In Asia, 19 percent of surveyed manufacturers have achieved ‘digital champion’ status, compared with 11 percent in the Americas. Indeed in 2016, PwC reported that Japan and Germany were furthest along the curve when it came to digitalising their (cost orientated) internal operations, with over 80% of their industrial companies surveyed back then considering themselves ‘digitised’. The French and Swedish companies surveyed felt similarly positive about their digitisation and integration capabilities.
- There is a similar contrast in the reports when it comes to “optimism” for the future. The Deloitte report recounts that APAC executives are “less optimistic”. However, the Strategy PwC research reports that 32 percent of Asian companies plan to have “established mature digital ecosystems” in the next five years, compared with just 15 percent in EMEA and 24 percent in the Americas. The major Asian economies have been ahead of the pack for a while, with PwC reporting in 2016 that, “China’s industrial companies stand out in all aspects of digitising” and that they were expecting above-average cost reductions and increased digital revenues through to 2020.
It may be that for the Asians, being so much further down the digitalisation path means they’re more mindful of what could be around the corner.
These reports will naturally approach topics from varying angles and say slightly different things. Nonetheless, they are great conversation starters especially when compared and contrasted. It would be great to see or hear your views. Feel free in commenting below.
From the 2018 Strategy PwC report:
“From a regional perspective, Asian (APAC) companies are clearly most advanced, with 19 percent of the companies from that region in the Digital Champion category, followed by the Americas, with 11 percent. European companies lag behind, with just 5 percent of companies in the Digital Champion segment.
Asian companies have the advantage of setting up robust digital operations from essentially a blank slate in terms of factory automation, workforce, and even organizational IT networks as a whole — that is, without having numerous complex legacy systems and facilities to upgrade, integrate, or discard. In addition, Asian companies appear to be keener to try new business models and develop innovative products and services.”