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Industrial Revolution 4.0 An opportunity for achieving Disruptive Innovation for Nations

iStock 1286943539 - Global Banking | Finance

6 - Global Banking | FinanceBy Dr Vivek Arunachalam Lecturer at Berlin School of Business and Innovation (BSBI) and Hon Economic Advisor, WTC Navi Mumbai

Digital infrastructure is the key investment industries need in order to thrive in the future. Countries that invest in digital technology will have the advantage of implementing a reliable ecosystem in the long run. The industrial evolution, from steam industries to IoT platforms, has seen countries benefit from manufacturing, production, technological, hospitality and services-based value systems. The advanced economies have climbed over the value chain, offering the best services in quality and process-based innovations in factory and factory forward. However, industry rules are changing as are the rule makers.

The Big 3 of the internet, Amazon (AWS), Google and Meta, are becoming more prepared for the battle of the Internet of Things (IoT). As the internet becomes increasingly dominated by the big three, US-based firms (Amazon, Meta and Google) will take the economic advantage by holding the monopoly of data or being the dominant firms in spite of other firms (the competitive fringes) and other Countries trying to build their own value using the internet. The advantage of network externalities in the platform structure of business will, in turn, help American firms to succeed and maximise their existing dominance of market share.

Countries should therefore prioritise investing in digital infrastructure (including required hardware, chips, batteries, connectivity, cloud and the internet infrastructure), education and skill training, supporting universities with Digital Business Incubation Centres, structurally changing all the industries with technology-oriented upgradation (banking sector, medical sector etc. with cloud and digital based operations).

I have designed a framework to show where nations should invest and how this will help maximise their revenue.

7 - Global Banking | Finance

The above framework will help nations maximise their income by investing in the right industries. As shown, nations should invest in education through universities and skill development centres and make them widely accessible to all. Investments in industrial sectors is also vital to generate future talent which can be capitalised on and converted to the creation of power value system of the chosen sectors. Nations should create an ecosystem where clusters of supporting industries and main industries are able to thrive, thereby, helping to achieve the technological superiority of the industrial sectors. This would help in building the value system. The sectors and systems within the sectors should be well supported by capital, government policies, industrial frameworks and a regulated entrepreneurial ecosystem.

Stable infrastructure is very important and is not restricted just to transport, but the digital realm too. High investments should be invested in satellites and digital connectivity. Privatisation of industries in these fields will help create technological competence and growth of the industry. Though most nations do not have all the necessary resources, co-operation could support industries in achieving an advantage. Smaller nations should fund larger nations (since small Nations cannot own the huge infrastructures such as Satellites and Space Stations and thereby supporting with small funds for Research and Development etc- concept of balancing power under powerful nations) and allied nations should support each other in levying high-cost technologies such as space stations and satellite infrastructures for IoT and cybercommunications.

Wealthier nations have the necessary capital, resources and ecosystems and, thereby, they have the advantage of investing in future technology, whereas smaller nations already carry debts, hindering their chances to invest. Inheritance of wealth by larger nations helps these nations invest in digital infrastructure, whereas the lack a financial resources for capital investment paralyses their growth for the future. This leads to an ongoing the inequality between the wealthier nations and creates high inequality with the poorer nations.

Thus, the industrial world of competitiveness is bound to increase exponentially which will be reflected in the future industries with Bots and Cyberphysical systems helping to increase efficiency and productivity from the manufacturing sectors to service sectors . New nations (Nations prepared for this era of industrial dominance like South Korea, Taiwan, Estonia many more nations etc which didn’t have a dominant role in the previous era.) could use this opportunity to create technological expertise and lead in the future within the fields of AI, IoT, AutoTech and cybertechnology, making themselves the centre of growth for other sectors.

Global Banking & Finance Review


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