A Strategist's Guide to Industry 4.0

Industrial revolutions are momentous events. By most reckonings, there have been only three. The first was triggered in the 1700s by the commercial steam engine and the mechanical loom. The harnessing of electricity and mass production sparked the second, around the start of the 20th century. The computer set the third in motion after World War II (see "The Man Who Made the Computer Age Possible," by Jeffrey E. Garten). It might seem too soon to proclaim that the fourth industrial revolution, spurred by interconnected digital technology, has begun. But Henning Kagermann, the head of the German National Academy of Science and Engineering (Acatech), did exactly that in 2011, when he used the term Industrie 4.0 to describe a proposed government-sponsored industrial initiative. When you look closely at the rapid pace of digitization in industry today, the name doesn't seem hyperbolic at all. It is a signal of sweeping change that is rapidly transforming many companies and may catch others by surprise.