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368. Fake or Fate? The Next Industrial Revolution

How is the world responding to it?

So, Yi-hyeon, Jang, Min-young, Kim, Ah-young 기자2017.11.16 15:38:40

Current technology is changing at an exponential speed and the world is going through another revolutionary development. Countries worldwide are investing largely in the Fourth Industrial Revolution. South Korea has increased its budget for Research and Development (R&D) in the Fourth Industrial Revolution from 1.2 trillion to 1.5 trillion won. As the importance of this area grows, it is necessary to understand the aims of the Fourth Industrial Revolution and where Korea stands in this field, and to be ready for the future by discussing how the developed world is proceeding.


The 4th Industrial Revolution in Korea

1.    What is the Fourth Industrial Revolution?

The Fourth Industrial Revolution is defined as a fusion of technologies with physical, digital, and biological domains. Technologies such as Artificial Intelligence (AI), the Internet of Things (IoT), Cloud, and Big Data are integrated in this revolution with existing industries, services, and diverse disciplines.

2.    Is the Fourth Industrial Revolution merely a prolongation of the Third?

The characteristics of the First, Second, and Third Industrial Revolutions have been distinctive. The First Industrial Revolution mechanized production using steam power, the Second made mass production possible using electricity, and the Third automated production using Information Technology (IT) and electronics. The Fourth Industrial Revolution, toward which the world is proceeding, is different in that it does not involve completely new features, but builds on top of previous development. Despite this characteristic, the World Economic Forum (WEF) claims that the Fourth is not just an extension of the Third. To make this clear, the WEF states that the Fourth impacts a broader scope at an exponential velocity, as never before. The Fourth Industrial Revolution comes only 50 years after the previous revolution, whereas there always has been a gap of a hundred years from one Industrial Revolution to another.

3.    How well is South Korea prepared for the coming of the Fourth Industrial Revolution?

Current reports fall short of expectations. The Hyundai Research Institute claimed in a 2017 report that fields of technology, patents, investment, and research workforces in South Korea related to the Fourth Industrial Revolution are falling behind those of other leading countries. Moreover, the Korea Institute for Industrial Economics & Trade (KIET) reported that Korea will need about four years to catch up. The material industry and new industries have the lowest index, falling six years behind pioneer countries.


Global Responses

Global Responses to the Fourth Industrial Revolution

The Fourth Industrial Revolution is a worldwide issue. However, agreement on the concept is insufficient, so it is difficult to take proper action. While the Fourth Industrial Revolution is hard to define, we need to look around and respond appropriately to cope with the upcoming situation. Therefore, it will be helpful to see how other countries are responding to this global phenomenon. Let's look at the policies and responses of Germany and the United States, which are the main countries preparing for the Fourth Industrial Revolution.

 

1.    German Responses

As a front runner of the Fourth Industrial Revolution, Germany has implemented “Industrie 4.0,” which is focused on the manufacturing industry. At first, Germany tried to establish abstract concepts, but soon shifted to the practical strategy of developing the technology and solving the errors involved in building a smart factory. Germany has been presenting policies for small and midsize businesses since 2015 and has expanded its policy toward other sectors beyond manufacturing.

1-1.       Adidas Speed Factory

The German sport brand, Adidas, introduced the first sneakers made by its new shoe factory in Ansbach, Germany, in September 2015. Adidas sneakers have not been manufactured in Germany since the last factory closed in 1993. This was because of outsourcing to factories in China or Southeast Asia, due to the burden of labor costs. The Speed Factory is equipped with 100 % robot automation, so it has only about 10 workers. The factory produces 500,000 pairs of sneakers annually, whereas 600 people would be required to produce the same amount of goods in the traditional shoe factories. The Speed Factory is a good example of a smart factory that produces personalized shoes in a shorter time compared to a simple automation factory. The Fourth Industrial Revolution is not just about improving productivity, but also supplying optimal products.

 

2.    American Responses

Global IT companies, including Google, are leading the Fourth Industrial Revolution in the worldwide development of new technologies. In 2011, the Obama administration implemented the “Advanced Manufacturing Partnership” to promote the advanced manufacturing industry. Two years later, in 2013, the government presented the “Smart America Challenge” to develop a testbed integrating nine social sectors, including manufacturing, transportation, healthcare, and defense. Recently, a “Brain Initiative” has been promoted for R&D of AI.

2-2. Amazon’s Logistics Innovation

Amazon is an IT company in America, based on online commerce. The company has been implementing a state-of-the-art automated logistics center using robots. The ‘Kiva’ robot can automatically carry out the delivery of goods and it has increased the utilization of space by more than 50 percent. The robot crane, ‘Robo-Staw’ also lifts up to six tons of objects and places them on a conveyor, thus reducing the accident rate of the logistics center staff. This automation has enabled the logistics center to reduce the amount of time it takes to find and ship customers’ orders by 30 minutes. In addition, a shipping system using drones is currently being tested. A service that delivers less than 2.3kg of goods in a range of 16 km or less in thirty minutes is currently being developed. This drone shipment is called ’Prime Air,’ and is planned to be launched in Britain and the United States. By utilizing Big Data for delivery and inventory management, the products can be analyzed in advance and shipped to nearby logistics centers before the orders. Amazon has invested in developing robots with a subsidiary company called Amazon Robotics.

 

Interview: By prof. Kim, Tae-kyu, Electronics Engineering

1.    What is the overall idea on the Fourth Industrial Revolution? How are the 2018 policies regarding it?

There is no easy explanation for the Fourth Industrial Revolution. It depends on how and where to focus, but some experts state that it is an old form of cottage industry, as distinct from mass production. In China and the USA, they have set up Tech-Shops, which are a playground for future inventors (called Makers) to make brilliant prototypes. An individual with an idea cuts wood, welds, and uses 3D printers to make a trial product, and receives government aid to make a development prototype in the Tech-Shop. For the New Industrial Revolution, what governments should do is to invest in the Makers by holding various idea contests and supporting related experts. There is an obvious deficiency in government policies for the Fourth Revolution in the 2018 report. The technologies that the government is expanding investment in are ones that are already in existence. Increasing investment on R&D does not mean preparation for the overall future. The 2018 policies mostly concentrate on existing technical development rather than on actual social investments. Using Cloud, IoT, and 3D printers to produce something practical is a better way to take a step forward to the future. For example, if a policy appears in the report as ‘Expand Spread of Bus Wi-Fi’ is changed to ‘Bus Wi-Fi devices collect live traffic information and share’, it can said to be developed.


2.    Was there any visible achievement from R&D investments in 2016, and 2017? What industries are we leading in?

There are no clear indications on this subject. It takes time for a new technology to become world class, so that it is difficult to figure out where Korea stands. In general, AI and Automation, which are led by the government, seem to be falling behind, but mobiles, which are supported by large enterprises, seem to be progressing. Germany, home to some of the world’s largest car companies, was the first country in the world to legalize self-driving cars and pioneered the Advanced Driver Assistance System (ADAS). However, Korea has not even established a law for test-driving such cars. Google is the exclusive boss of AI. They invest a specific amount of their profits, which also means a tremendous amount of money for inventing. Samsung has also made laboratories in which researchers can experiment on anything, regardless of their major, once their proposals are approved. One fortunate advantage for Korea is that the field related to IoT is well settled. The Internet and Smart Device distribution rate is high, so that citizens will be ready to react to the next industrial revolution. Futuristic developments are not being magnified yet.

 

3.    Do you think our investment in 2018 will contribute to Korea’s capability for the Fourth Industrial Revolution?

Our investment policy is wrong for a number of reasons. First, the government wants to see results in a very short term. If there is no tangible outcome, they cut funding off immediately. They care for technologies which are related to recent social issues, rather than invest purely in Research and Developments activities. If a corporation tactically invests on a new project to make profits, this might be a faster way to show visible achievement. The other problem is that every time the administration changes, the investment direction also changes. Strategies like the New University for Regional Innovation (NURI) should be made more numerous and more consistent. First of all, the government should define the Fourth Industrial Revolution in clear categories, plan for changes, and develop them, in order to support start-up companies, produce national brands, and establish public maker-spaces. New items in professional fields will lead Korea to the future. According to the 2018 report, there is a lack of attention to education about the future industries. High school students study to go to college, and undergraduate students study to have a job. A good example is a center in our college. There is an Invention Hall, which has carpentry equipment, cutting machines, and 3D printers, and holds regular lectures on how to use them.

 

To achieve the benefits of new technologies, society has to be ready to grasp them. Governments, business and academia all have a responsibility to prepare the current and future workforce for the imminent and dramatic changes to come, and society as a whole has to engage in this new industrial revolution.

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