The Fourth Industrial Revolution matters
The First Industrial Revolution of the 18th century seems far away. Yet, the consequences thereof are still felt and for many in society it improved standards of living and created an entrepreneurial spirit. Things have moved on and we have seen various cycles of great wealth and loss, stock-markets boom and then collapse and retail soar to now find itself in what looks like a steady nose-dive.
The second Industrial Revolution followed in the second half of the 19th century with the emergence of new energy sources, rail, iron and steel production and was soon succeeded by the Third with the rise of nuclear energy and electronics.
Within the blink of an eye, we now find ourselves in the midst of what is considered the Fourth Industrial Revolution, brought on by the dawn of the Internet and digitalisation. No longer is energy the strongest driving force, but communication, speed of information and the power of analytics.
The question we need to ask is, whether this revolution matters to us all? To business, to not-for-profits, to individuals and careers?
In my interview with Richard Askew from Armstrong Watson we ask in which way the 4th Industrial Revolution is impacting and shaping this renowned 150-year old business of accountants and financial advisers:
The recent developments in the market around data and artificial intelligence are part and parcel of what is deemed the 4th Industrial Revolution. Where do you see opportunities in general in the current market as a result of this ‘revolution’? –
“The Fourth Industrial Revolution or Industry 4.0 as it is sometimes referred to, is critical not only on a global scale, but to us all locally right now. Embracing this will be critical for survival and this is not just about big manufacturers and the tech giants, this will affect us all. Having the UK at the forefront of AI and the data revolution is also one of the four grand challenges in the UK’s Industrial strategy and so is clearly high on the agenda of the Department for Business, Energy & Industrial Strategy. The biggest opportunities will come to those who embrace the most innovative cultures. If you are able to adapt your business in a way which makes the best use of it’s data, which looks to opportunities in servitization, prioritizes clean growth and harnesses the power of innovation to meet the needs of an ageing society, you will reap the rewards. Think 3D printed houses and wearable monitoring devices to collect vital signs from our elderly population. This is about digital industrial and physical industrial.
Where do you see the pitfalls? Are there early pitfalls and are there some which might take longer to come to the forefront? –
“One obvious pitfall is reputational risk. We may come up with great new innovations, but some will flop and may cause reputation and legal risk as a consequence. Another early pitfall may be that we fail to re-train and/or develop our people ready to cope with the demands of businesses as they change. AI will impact the businesses before it impacts its employees. Because of this, it is also inevitable that some businesses will fail as a consequence of failing to meet the promises of their new technology and as they struggle with funding the impact of this.”
How have these developments impacted Armstrong Watson’s work? What adjustments have you made or are you making to benefit from the market shift and what are you doing to prepare for any of the negatives? –
“Armstrong Watson are in a profession which will see a huge impact from AI. As automation and efficiencies brought about from AI reduce the need for less time and effort spent on the more mundane (processing) elements of accounting and audit, there will be an even greater emphasis on the business advisory offering. At Armstrong Watson we have been working hard on delivering and improving this offering for a number of years already and are extremely well placed to deal with the digital revolution as we have been early adopters at embracing cloud technology, for both our clients and within our own internal systems.”
Armstrong Watson is clearly a very customer-centric organisation. In which way are you helping your customers grow with you in adopting new technologies while still maintaining a strong focus on personal customer care? –
“Armstrong Watson have spent a long time developing strategic partnerships with the best cloud-based technology providers around in order to embrace the change for the benefit of our clients and our people. Working with the likes of Xero and Figured, for example, have allowed us to provide excellent solutions for our clients which add value to their businesses through more efficient, real-time, and improved financial reporting which frees up time to work on “real” business and to make better informed business decisions more quickly and confidently. This has also allowed us to improve client focus by also allowing us to focus more time on conversations about advice instead of ironing out more mundane accounting and book-keeping matters. The benefits of this continue to push our already world-class levels of client advocacy.”
Finally, a philosophical question. Change is inevitable, nevertheless, people struggle to accept change. This industrial revolution is underway, yet some are struggling to accept the direction it is taking - possibly with good reason. Already, we hear about job losses as a result of the changes. This can create fear. What perspective do you have on the changes and how would you recommend small or large businesses think about the future respectively? What approach would you say will put them in good stead? –
“This revolution will, on the whole, create many more jobs than it removes. As I mentioned with my own profession, the degree and speed with which it affects someone will differ based on what they do. There will have to be an acceptance that people will need to re-train or take a study path which meet the demands of this change. That in itself is nothing new. As we moved into the last industrial revolution we had to find a new generation of computer programmers and technology whizzes to get where we are today. We will do it again. The biggest thing for me in all businesses, regardless of size, is that managing the culture will be key. It’s ok to introduce new strategies which account for all the change, but if you haven’t worked on your culture you will struggle to bring your people with you. Sometimes that will involve losing good people to more suitable employers, but that is a win-win in the long term.”
About Richard Askew:
Richard Askew is partner at Armstrong Watson, a top 30 firm of accountants, business and financial advisers. He has lived and worked in West Cumbria all his life and heads up Armstrong Watson’s West Cumbria office in Workington.
Richard supports and advises clients across a range of industries and those in nuclear, construction, manufacturing and hospitality. He prides himself on providing an accurate, timely and value adding service to his clients. Richard focuses on working with owner managed businesses to help them achieve their business objectives, supporting them in growing and protecting their wealth for the long term, creating lasting relationships built upon honesty and trust.