TEACHING MACHINES TO THINK

Dubai 2020 | IT & INNOVATION | INTERVIEW

Though Industry 4.0 will define manufacturing everywhere for the years to come, the UAE, and Dubai in particular, could provide the model countries should emulate to adapt to change.

Henrik von Scheel
BIOGRAPHY

Henrik von Scheel is best known as the “originator” of Industry 4.0 and the mastermind of the European digital revolution. He has been named by Financial Times as one of the leading authorities on strategy and competitiveness and was the winner of the prestigious Mohammed bin Rashid Al Maktoum Knowledge Award in 2019. His work is applied to national economies and has triggered global themes, influenced GDP growth, reset policies, and shaped the performance of the fastest-growing Fortune 100 companies. Scheel is a sought-after speaker, prolific writer, and strategic advisor guiding mainstream thinking and practices of organizations today.

As the leading authority on strategy and originator of the Industry 4.0 concept, how do you define Industry 4.0 and differentiate it from previous industrial revolutions?
Industry 4.0 fuses the digital, the physical, and the virtual world and is the biggest structural change in the past 250 years. The fourth industrial revolution began in Germany at the beginning of the 21st century with the combination of the digital, physical, and virtual worlds into what is called cyber-physical systems. Due to its scale, scope, and complexity, this transformation is and will be unlike anything humankind has experienced. It is disrupting every industry and economy in every country. And it fundamentally alters the way we live, work, consume, trade, invest, and relate to one another. This new paradigm marries advanced production and operations techniques with smart digital technologies to create a digital enterprise that will be not only interconnected and autonomous but can communicate and analyze data to drive further intelligent actions in the physical world. Disruption is not a new phenomenon. It is the accelerating frequency of disruption that poses a new challenge. Furthermore, this new revolution creates waves, each unlocking the paradigm shift of the next wave, and so on, as there are certain technological requisites that enable newer technologies at later stages. Currently, we have entered the second wave, defined by radical changes in the manufacturing industry. It alters the way companies operate and the relationship between suppliers, customers, and third parties, with increased interactions between all parties.

What differentiates Dubai as the most equipped to lead the world in terms of Industry 4.0?
Dubai is at a major crossroad that will define the future of growth, prosperity, productivity, and competition. The UAE, and Dubai in particular, is set to be the leader that will show the world the right road to take. In my experience of dealing with G20 countries' strategies, only the UAE has all factors needed: a willingness to lead, capital, and a government that acts like a private organization through its righteous ruler. Dubai's Industry 4.0 has to be carefully designed; if designed successfully, it can offer a model for the world. It requires that government, financial institutes, and businesses work together in a closed-door room to proactively create it—not buy or react to it. In the last 20 years, the UAE has been built on buying the best of the best. But there must be a fundamental shift marking an era characterized by creating new industries. I am dedicating the next four years of my life to enabling the UAE's lead.

What are the main drivers for Dubai companies to adopt Industry 4.0?
Each industry has different drivers. Nevertheless, there are three common stages of adoption. The first stage of adoption is increased operational excellence. All organizations that want to compete focus on operational excellence. Roughly 70% of organizations' operations pertain to non-core activities such as human resources, finances, and procurement. These are areas wherein Industry 4.0 enables enhanced performance and relevance through automation and integration of IoT, AI, cloud, and advanced analytics. From there, we move to stage two, which is improved growth. A company's core competencies represent about 15%, and this is where Industry 4.0 is applied through smart supply chain management, smart products, integrated ecosystems, smart automation, smart contracts, and so on. This brings us to the third stage, increased competitiveness. In the current age of disruption, it is necessary to rethink core differentiation. Differentiation is what you do every day through repeatable activities to serve customers better than the competition. This is the true competitive advantage and is a difficult discipline to master. It takes months to develop and refine, constituting only 5% of an organization. But this is the area where early adopters apply Industry 4.0 to develop next markets, services, products, or business models such as bioinformatics, nanotechnology, or quantum technology, to name a few.