Article written for the World Economic Forum by Joe Kaeser, President & CEO, Siemens AG
Although we have only seen the beginning, one thing is already clear: the Fourth Industrial Revolution is the greatest transformation human civilization has ever known. As far-reaching as the previous industrial revolutions were, they never set free such enormous transformative power.
The Fourth Industrial Revolution is transforming practically every human activity: the way we make things; the way we use the resources of our planet; the way we communicate and interact with each other as humans; the way we learn; the way we work; the way we govern; and the way we do business. Its scope, speed and reach are unprecedented.
Think of it: Just 10 years ago, there was no such thing as a smartphone. Today, no one leaves home without it.
Just a few decades ago, the internet connected computers at just a few sites. Today, practically every human being can connect to a network that spans the entire globe and provides access to the greatest repository of information and knowledge ever created by humankind.
Enormous power entails enormous risk. Yes, the stakes are high. If we get the revolution right, digitalization will benefit the nearly 10 billion humans inhabiting our planet in the year 2050. If we get it wrong, societies will be divided into winners and losers, social unrest and anarchy will arise, the glue that holds societies and communities together will disintegrate, and citizens will no longer believe that governments are able to fulfill their purpose of enforcing the rule of law and providing security.
That's why the Fourth Industrial Revolution is not just about technology or business; it's about society. It is fascinating when a computer beats the best human GO player, when bots write texts, and machines "talk" to each other. Nevertheless, we humans define the algorithms that govern machines and not the other way around. And make no mistake about it: we are now writing the code that will shape our collective future.
That's happening in manufacturing right now. What we call Industrie 4.0 enables manufacturers to create a "digital twin" of the entire manufacturing environment – from lab to factory floor, from showroom to service. Manufacturers can design, simulate, and test sophisticated products in the virtual domain before making the first physical prototype, before setting up production lines, and before starting actual production.
Software helps optimize every process and every task, whether performed by humans or machines. Once everything works in the virtual world, the results are transferred to the physical world, the machines, and they close the loop by reporting back to the virtual world.
This seamless integration of the virtual and the physical worlds in so-called cyber-physical systems – that is the giant leap we see today. It eclipses everything that has happened in industry so far. As in previous industrial revolutions but on a much larger scale, the Fourth Industrial Revolution will eliminate millions of jobs and create millions of new jobs. And because manufacturing accounts for 70% of global trade, this really is about "the wealth of nations", to quote Adam Smith. That raises the question: what can we do to make sure as many citizens as possible benefit from the Fourth Industrial Revolution?
First, we can learn from the past and lay the conceptual foundation for an inclusive society. In the middle of the 20th century, thought leaders such as the economist Alfred Müller-Armack developed the so-called social market economy, Germany's model of success to this day.
He envisioned an open society that aims to "unite the principle of the free market with that of the fair distribution of prosperity". This vision is more relevant today than ever before because it points the way to an inclusive form of capitalism and to a sustainable model of economic and social well-being. I believe that the next step on the path to inclusiveness is to significantly raise standards for business as far as social responsibility and sustainability are concerned.
Contrary to Milton Friedman's maxim, the business of business should not just be business. Shareholder value alone should not be the yardstick. Instead, we should make stakeholder value, or better yet, social value, the benchmark for a company’s performance.
Today, stakeholders – customers, shareholders, suppliers, employees, political leaders, society as a whole – rightfully expect companies to assume greater social responsibility, for example, by protecting the climate, fighting for social justice, aiding refugees, and training and educating workers. The business of business should be to create value for society. At Siemens, we call this "business to society".
Second, because the Fourth Industrial Revolution runs on knowledge, we need a concurrent revolution in training and education. Here, both government and business must join forces to provide workers with the skills and qualifications they need to participate in the digital economy, for instance, by being able to tap the opportunities created by artificial intelligence. If the workforce doesn't keep up with advances in knowledge throughout their lives, how will the millions of new jobs be filled?
Third, we must encourage innovation and the ability to adapt. Digitalization has demonstrated its disruptive power in the past; it has turned entire industries upside down. You know the saying, "The internet cuts out the middleman". Digital technologies enable completely new business models – and now we see that they enable new social models. One of these is the sharing economy. It challenges one of the fundamental precepts of our economic order: the prominent role of property. Whether you consider this good or bad, it’s reality.
Fourth, as leaders we must summon the courage to address the tough questions. And there are plenty of them. How can we secure the future of those whose jobs will be eliminated by machines? Do we need a guaranteed basic income? Should we impose taxes on software and robots? Do companies that provide global IT platforms have to comply with national rules and regulations? If so, how can they be enforced? What freedoms and rights should individuals have in the digital age?
These are the tough questions we face today. And I don't think longing for the alleged "good old days" will yield good answers. In his book "Retrotopia", the Polish sociologist and philosopher Zygmunt Bauman maintains that many have lost all faith in the idea of building a future society and turn to the ideas of the past, buried but not dead.
Instead, we should look forward, point out both the opportunities and risks of the Fourth Industrial Revolution, and then roll up our sleeves and create answers that really work for us and future generations.
Many of us do not trust giant corporates and modern institutions to protect our personal data – even as we frequently neglect cybersecurity best practices in our own personal lives. Don't get hacked! It's time to get serious about password safety. We present a few top tips for locking down your online security because when it comes to safeguarding passwords, especially in a family and academic setting, people often choose convenience over safety.
As families manage their digital information and online accounts, many end up opting for that less secure and casual key-under-the-doormat solution. People are already sharing passwords, and their methods of sharing are not always the best. Some 41 percent of adults with online accounts admit to sharing passwords with friends and family, according to a cybersecurity survey by Pew Research Center. Yet, 90.8 percent of respondents say they know that having strong passwords helps them better protect their families.
Consider the number of security breaches that continue to make national news:
* In 2016, the Yahoo data breach compromised 1 billion accounts.
* In that same month, 167 million email addresses and passwords were stolen from LinkedIn.
* In September 2017, a security breach at Equifax in the US was reported, exposing Social Security numbers and other personal data of 143 million users, which is nearly half the U.S. population.
Now more than ever, it's clear how important it is to protect our personal information online. According to a Verizon 2017 Data Breach Investigations Report, 81 percent of data breaches involve weak, reused or stolen credentials. That's significantly higher than the 63 percent it was in 2016.
"If you were to dig into the reasons behind these repeated, overly simple, shared passwords, it's actually pretty understandable as to how this happens," according to a cybersecurity expert Steve Schult. "The average person has some 200-plus logins. If you were to give each its own strong, unique password, that's way too many for one person to keep track of and remember, let alone all the other family members that might also use some of those accounts."
But there's no need to trade security for the convenience of digital access. With a password manager designed for individual or family use, you can create those strong passwords for all the accounts you and your family use, and store them within a secure vault that's accessed by a single master password only you know. These digital lockboxes protect your information under multiple layers of security, making it impossible for digital thieves to hack and access.
If you're debating whether to make the switch to a digital password manager, here's a few ways it can improve your family's online security and help stop the struggle with passwords.
Create rock-solid passwords: Most password managers offer a secure password generator that allows you to set and create a long, strong and unique password for every online account. You can create a password up to 100 characters long, including numbers and symbols. Another way to do it is by using the "passphrase" approach, meaning string together words that create a phrase. Be sure to steer clear of birthdays, anniversaries, street names and other specific personal details that can be found through a simple social media search.
Secure more than just passwords: There's an endless number of passwords and sensitive information you can store in your password manager, including banking logins, passport and license numbers, shopping accounts, email and social media passwords and more. By storing all of this information in your secure vault, you'll always have access to the information whenever and wherever you may need it.
Safely share passwords with family members: One benefit of a password manager that's designed for family use is that it lets you safely and conveniently store passwords and valuable documents in folders for flexible sharing with others in the family. There are security software available that includes unlimited shared folders, which means you can create multiple folders and store an endless number of passwords and share with those in your family. For example, you could put your banking account password into one folder and share access with your spouse, have another folder for your favorite streaming services and securely share access with the whole family. All the while, you can keep your personal accounts private.
Use it as a teaching moment: Have a talk with the younger members of the family and seniors about how passwords are the keys to our digital lives, and how good password habits help protect everything from personal details to finances. Show them how to build a good password, and how tools like a password manager can create a safe way to access and share accounts. It's an important life skill that will help them protect themselves for years to come.
Plan for the digital afterlife: When there's a death or serious emergency, it turns out that in many countries state and federal laws, along with service agreements, can block your family from getting access to your online accounts. With a password manager that allows emergency access, family members can get into your password vault and have access to whatever they need.
Locking doors and windows and leaving a light on used to deter criminals from breaking into homes when you were away on vacation, but our obsession with sharing photos and experiences in real time on social media has created a whole new security risk for travelers. According to US insurance major Mercury Insurance, burglaries involving social media have become all too common these days.
"Instead of looking for physical signs that a home is unoccupied, burglars can simply scan Instagram posts, monitor Twitter feeds and check Facebook for signs that someone isn't home. Posted photos can also show them exactly what to look for when they break in," says Mercury Insurance Vice President of Claims Kevin Quinn. "Oversharing on social media is commonplace and built-in smartphone features like geotagging, which share the user's exact location when they post, are only making things easier for thieves."
One example is a Mercury claimant who took his family on vacation to Cancun, Mexico. The family was very active on social media, publicizing their upcoming vacation and continuing to post updates throughout the trip. Thieves used this information to break into the claimant's home and steal nearly $200,000 worth of personal property, along with a Mercedes-Benz parked in the driveway. Many of the items stolen were pictured on the family's social media accounts, so the thieves knew exactly what to target.
"It's important to make sure no one in your family is posting your travel plans. Facebook posts checking into restaurants or Instagram photos of your family's vacation blatantly advertise that you're away from home and put your property at risk," adds Quinn.
Quinn offers the following social media tips to consider before taking off on your vacation:
* Never share photos of your belongings. Be careful about displaying any expensive belongings on social media that might entice thieves. Steer clear of posting pictures of expensive jewelry, cash, designer clothing and accessories, and electronics.
* Don't tag your location. Disable the geotagging feature on your smartphone and resist the urge to check in at locations while you're away.
* Avoid uploading photos during your vacation. Wait until you're home to share your family's trip.
* Be selective about what and with whom you share. Limit your following or friend base on your personal accounts and adjust your privacy settings so that others have a limited view of your profiles. You never know if a friend of a friend is looking at your photos or other posts.
* Never announce your vacation plans on your social media channels. If you plan to go out of town, consider having a neighbor check on your home, or hiring a trusted friend or family member to housesit.
* Verify friend requests. It's easy for people to pretend to be someone they're not online, so don't get "catfished." Be wary of connecting with people you don't know.
* Power down your PC. Disable the internet connection to cut off access to any personal information stored on your computer, because unattended machines are easy marks for hackers.
"Live in the moment and enjoy your time with your family. The purpose of vacation is to relax, recharge and experience things in person, not just on a screen. Save the photo sharing and status updates for when you return home - it could make the difference between whether you need to file an insurance claim after your well-deserved time away or not," adds Quinn.
Do you think you could live without your mobile phone? What about the navigation and backup camera in your car? Could you drive as well without them? Could you get by without your smartwatch reminding you how often to get up from your desk to keep healthy or weather conditions for the day so you know how to dress?
Our obsession with technology and the information it delivers daily has progressed beyond the point of external mobile phones and smartwatches to implanted heart monitors and Fitbits. At one time, Indian consumers were too paranoid to enter their bank account & credit card number online, but now, they are willing to implant sensors and other wearable technologies into their bodies. In turn, companies are leveraging these devices to collect as much data about their potential customers as possible.
The latest fashion: Wearing data
Think about it: You're carrying (and generating) large amounts of data everywhere you go with wearable and implanted technologies. This means 24/7 data collection for the companies that manufacture those devices, which in turn helps them create a 360-degree view of the patients, athletes or customers they serve with the appropriate products, services and marketing campaigns.
According to research by Talend, a cloud and big data integration software company, 33 percent of consumers already own wearables like the Apple Watch or smart clothing, and another 30 percent are expected to make a purchase within the next three years. That's a lot of new sources of data for companies to utilize - and a plethora of information companies can use to more accurately define the preferences and needs of its customers.
How we're using wearables
Topping the list of today's most common consumer-use cases for embedded wearables is healthcare (57 percent), privacy (28 percent) and convenience (20 percent), all contributing to the rapid dissemination and uptake of these devices.
Healthcare is the leading use for implanted technologies, with the introduction of advanced-tracking devices such as Medtronic's FDA-approved Reveal LINQ Insertable Cardiac Monitor with TruRhythm Detection, introduced in March of this year, which is designed to accurately identify abnormal heartbeats. This life-saving device is implanted just beneath the skin and communicates wirelessly with the patient's bedside monitor, which uploads device data to the Medtronic CareLink network. Once the data is loaded, algorithms can be run to determine if the patient is experiencing slower than average heart rate, which can deprive the brain and other organs from getting enough oxygen. This advanced use of embedded wearables and machine learning helps physicians find answers for patients at risk of cardiac arrhythmias to better manage a range of patient populations.
Outside of healthcare, the second biggest use for embedded wearables is physical security. Several companies have started utilizing biochip implants to replace card keys and manual entry codes for employees. For example, US-based Three Square Market offered employees implanted chips in to make purchases in their cafeteria and break rooms, open doors, log in to computers and use the copy machine. Approximately 50 employees underwent the minimally invasive procedure, many of whom believe the chip is worth any potential discomfort, as it helps to streamline their daily processes. Though this may seem like a massive invasion of privacy for many, for others, biochip implants present a way to make life easier.
Establishing trust: Should you be worried about privacy of information?
While the results of Talend's survey seem to point to the fact that consumers are getting more digitally comfortable, with greater trust from consumers comes greater responsibility for companies to understand the many ways they need to protect customer data.
According to Talend's survey, the most likely scenario that would drive consumers to break up with a brand and take their business elsewhere is a breach of personal data. In fact, 78 percent of consumers want to be assured they have full visibility into what companies are doing with their data. But as implanted and wearable technology becomes increasingly common and technology improves, the trade-off between data privacy and convenience will only increase.
Consider a future of augmented reality where implanted contacts could allow you to visualize and interact with the world around you in practical ways, or a future with implanted audio wearables that translate languages in real time. Would that convenience and experience move you to adopt wearable technology even if it means relinquishing more of your personal information and privacy? At what point of technology adoption do we all essentially become cyborgs, guided each day by the obvious and subliminal information being fed to us via embedded and external devices? The day of total automation may be here sooner than you think.
