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10 Principles for Leading
the Next Industrial Revolution
Illustration by Miguel Montaner
It isn’t often that the broad
infrastructure that underlies industrial
civilization undergoes a dramatic
transformation. But just such a change
appears to be happening now. In a
great wave of technological change,
sensors are spreading through
factories and warehouses, software is
predicting the need for maintenance
before a machine breaks down, power
grids and loading docks are becoming
intelligent, and custom-designed
parts are being produced on demand.
The leaders of the next industrial
revolution are companies making
advances in fields such as robotics,
machine learning, digital fabrication
(including 3D printing), the Industrial
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Internet, the Internet of Things (IoT),
data analytics and blockchain (a
system of decentralized, automated
transaction verification). Because
these technologies all reinforce the
others’ impact, they are leading to a
new level of proficiency, and to new
types of opportunities and challenges
for business and for society at large.
One key indicator is that conventional
boundaries between industries
are eroding. It’s getting harder to
tell the difference between, say,
a telecommunications company
and an entertainment producer, or
between a retail bank and a retail
store. The relationships among
suppliers, producers, and consumers
are also blurring, more rapidly than
many business decision makers are
prepared for.
The foundation of business strategy
has long been the classic value chain,
which links together raw materials
producers, manufacturers, distributors,
and (in the end) consumers through
a well-established commercial
infrastructure characterized by a stable
set of transactions. But the rise of
digital technology enables individuals
to connect outside the value chain
and deliver more efficient, effective
products and services. This will reduce
the importance of economies of scale
and conventional divisions of labor.