Overview of the industrial revolution 4.0 and some impacts on sustainable business

Nội dung text: Overview of the industrial revolution 4.0 and some impacts on sustainable business

1. OVERVIEW OF THE INDUSTRIAL REVOLUTION 4.0 AND SOME IMPACTS ON SUSTAINABLE BUSINESS Truong Thi Thuy Lien Thai Nguyen University of Technology Abstract The fourth industrial revolution (abbreviated as the industrial revolution 4.0) is in the evolution phase and will affect all socio-economic sectors. This is an unprecedented revolution in human history, and this new production revolution is expected to have a powerful impact on all nations, governments, businesses and citizens around the globe, and at the same time alter completely production and administration systems, including sustainable business. Keywords: the industrial revolution, sustainable business, global 1. Overview of the industrial revolution 4.0 The first industrial revolution appeared in the UK, breaking out around 1784. The characteristic of this first industrial revolution was the use of water, steam and mechanized production. This industrial revolution was marked by the milestone that James Watt invented the steam engine in 1784. This great invention sparked the outbreak of the 19th century industrialism spreading from England to Europe and the United States. The first industrial revolution opened a new era in human history - the era of mechanical engineering. The first industrial revolution replaced the traditional old agricultural technique (lasted for 17 centuries), mainly based on wood, muscular strength (manual labor), water power, wind power and animal traction on a new technical system with the power of steam engines and new sources of energy, fuel and material, iron and coal. It powers the production force to develop strongly, creating a great development of the industry and the economy. This is the transition period from agricultural production to mechanized production based on science. The main economic premise of this transition stage was the victory of capitalist production relations, and the scientific premise was the creation of a new, experimental science through the revolution in science in the seventeenth century. The second industrial revolution came about from around 1870 until World War I broke out. The hallmark of the industrial revolution was the use of electrical power and the introduction of large-scale production lines. The second industrial revolution took place with the development of the electricity, transport, chemical, steel production, and especially mass production and consumption. The second industrial revolution has created new premises and a solid foundation to develop the industry at a higher level. This revolution was prepared by the 100-year development of productive forces on the basis of the mechanical engineering and by the development of science on a technical basis. The decisive factor of this revolution was the transition to electro-mechanical production and to the local automation stage of production, creating new industries on the basis of pure science, changing science into a 245
2. special labor force. This has opened the era of mass production, driven by the advent of electrical and assembly lines. Industrialization was even more widespread in Japan after the Meiji Restoration, and penetrated into Russia, which boomed in the beginning of World War I. In terms of socio-economic ideology, this revolution creates the successful premise of socialism on a world scale. The third industrial revolution came about in 1969, with the advent of information technology, the use of electronics and information technology to automate production. This revolution is often referred to as the computer revolution or digital revolution because it was catalyzed by the development of semiconductors, supercomputers, personal computers (1970s and 1980s) and the Internet (1990s). This revolution has facilitated the saving of natural resources and social resources, allowing fairly less cost than the means of production to produce the same amount of consumer goods. As a result, it changed the structure of social production as well as the correlations between the sector I (agriculture - forestry - fishery), II (industry and construction) and III (services) of the social production. Radically altering production forces, the modern scientific and technological revolution has affected all aspects of human social life, especially in developed capitalist countries, because this is the birthplace of this revolution. Also known as the digital revolution with the emergence of technologies such as the Internet (IoT), artificial intelligence (AI), virtual reality (VR), augmented reality (AR), social network, cloud computing, etc., the fourth revolution began in the early 2000s. It was to transform the whole real world into a digital world. The term "Industrie 4.0" emerged in Germany in 2013. It was then talked about high-tech strategy, computerized manufacturing without human participation. Currently, Industrie 4.0 has gone beyond the scope of the German project. It has the participation of many countries. Now, it has become an important part of the fourth Industrial Revolution. This revolution is expected to affect all aspects of the economic and social life such as textile and garment, footwear, services, health care, transportation even agriculture. So what is the industrial revolution 4.0? According to Gartner, the Industry Revolution 4.0 derives from the "Industrie 4.0" concept in a German government report in 2013. "Industrie 4.0" connects embedded systems and intelligent manufacturing facilities to generate a digital convergence between industry, business and internal functions and processes. On January 20, 2016, the 46th World Economic Forum (WEF) officially opened in the Swiss city of Davos-Klosters, under the theme "The Fourth Industrial Revolution". The President of the World Economic Forum has come up with a new definition, which extends beyond the concept of Industrie 4.0 of Germany. Mankind is facing a new industrial revolution, which can completely alter the way we live, work and relate to each other. Its scale, scope and complexity is not the same as anything the humanity has ever experienced. "The first industrial revolution used water and steam power to mechanize production. The second revolution took place through the application of electricity to mass production. The third revolution used electronics and information technology to automate production. Now, the 246
3. Fourth Industrial Revolution is flourishing from the third revolution. It combines the technologies together, blurring the boundaries between physics, digital and biology." This is the concept of Klaus Schwab. That is to say, the Industry Revolution 4.0 will take place in three main areas, including Biotechnology, Digital and Physics. The core elements of Digital in the industrial revolution 4.0 will be: Artificial intelligence, Internet of Things (IoT) and Big Data. In the field of biotechnology, the Industrial Revolution 4.0 focuses on research to create leaps in Agriculture, Fishery, Medicine, food processing, environmental protection, renewable energy, chemistry and materials. Finally, it is the field of physics with new generation robots, 3D printers, self-driving cars, new materials (grapheme, skyrmions ) and nanotechnology. Four industrial revolutions in human history The nature of the 4th industrial revolution is based on digital technology and integrates all smart technologies to optimize production processes and methods; highlight the technologies that have and will have the greatest impact such as the 3D printing technology, biotechnology, new materials technology, automation technology, robots, etc. The 4th industrial revolution or Industry 4.0, is the current trend of automation and data exchange in manufacturing technology. It includes physical networking, internet connectivity and cloud computing. The Fourth Industrial Revolution is not only about machines, smart and connected systems, but also of a much broader scope. At the same time, there are waves of further breakthroughs in different fields from genetic code to nanotechnology, from renewable energy to quantum computing. Currently, the Industry Revolution 4.0 is taking place in developed countries such as USA, Europe, part of Asia. In addition to the new opportunities, the industrial revolution 4.0 also poses challenges for mankind to face, especially for those with a developing economy, including Vietnam. 2. Some impacts of the industrial revolution 4.0 on sustainable business Sustainable business is considered a model of future development. If the business goals pursued by businesses are profits as before, now sustainability and stability are key factors, because more than 200 years have passed since the invention of the steam engine, the habitat 247
4. becomes heavily polluted and increasingly threatened by unpredictable hazards. Therefore, in the world, countries are increasingly interested in green growth and sustainable development, in which sustainable business is a nuclear factor. In the context of globalization today, building a sustainable business model is one of the preconditions for businesses to create and maintain their competitive advantage. To achieve sustainable business results combined with high profit growth requires businesses to have a long-term strategy. Business is now diversified and developed by the integration and development of society and the economy of the world. A long-term, sustainable development that businesses are always looking for is interested by a lot of people and is always the first approach that businesses turn to before deciding to carry out their business. Every business wants to go to the sustainable business, it is the choice of many units and businesses for their successful development strategy. It can be cooperation from many units, agencies, organizations together to become close, sustainable partners, and bring them the best work. The products of this business direction are always oriented towards the quality, high efficiency, safety of consumer health, price stability, ease of use and environmental protection, life quality improvement of the workers Getting these things, the brand new business is supported by the authorities as well as customers to grow more and more. Sustainable business has emerged and developed around the world, bringing positive effects for businesses. However, in Vietnam, this issue has just been noticed, paid attention and implemented by prestige big businesses, but not been multiplied because of many factors such as lack of knowledge, lack of capital, lack of implementation and management mechanism, confusion In the 4.0 era, the development of sustainable business in Vietnam needs the support from the government or the key agencies to guide step by step for small and medium businesses to be done. At the same time, each business must have its own direction, development for its business with the connection with its partners or specifically it can carry out this business strategy in an independent way. The fourth industrial revolution has come. It affects all socio-economic sectors, including sustainable business. In my opinion, the industrial revolution 4.0 affects sustainable business in the following key areas: First, this industrial revolution 4.0 will have a direct impact on the production and labor force structure in the future when a robot can replace several hundreds or even thousands of workers. If the first industrial revolution was marked by the use of water and steam power to mechanize production, then using internal combustion engines, coal fuels and the construction of open rail lines to widen trade; the second industrial revolution with a prominent feature is the use of electricity to serve industrial production; the third industrial revolution - the era when people invented computers to carry out the work of mind for human, the fourth industrial revolution is the combination of technologies to blur the boundary between the physics, digital and biotechnology. In particular, the level of influence and spillover of this revolution takes place on a global scale, at a faster rate than what has 248
5. occurred so far and is forecasted to change the entire production, management and administration system worldwide. Like previous industrial revolutions, the industrial revolution 4.0 will increase income and improve the quality of life for the global population. Calling a taxi, booking air tickets, ordering goods, paying bills, listening to music, watching movies can be done remotely. Technological innovation will also improve the productivity and efficiency of the supply chain. Transportation and communication costs will be reduced, logistic services and global supply chains will become more efficient and commercial costs will decrease. However, this revolution could also break the labor market, as automation replaces manual labor in the economy, as robots replace human beings in many areas, millions of workers will fall into unemployment, especially in the field of insurance, real estate brokerage, financial consulting and transportation. Prior to the launch of Industrial Revolution 4.0, Vietnam had an economic geography advantage and a young plentiful labour force, engaging in many global value chains at the assembly stage. At the same time, the world was also moving the centre of global economic gravity from west to east, from north to south. However, that the Industrial Revolution 4.0 landed would change these things, reducing the advantage of cheap labour as well as the geo- economic advantage when bringing the manufacturing industry back to developed countries close to consuming market. Given that situation, Vietnam will be under pressure to lag behind but still have to integrate into the high-tech world and compete in it. Unemployment and inflation are the two most difficult issues of our country before the impact of the Industrial Revolution 4.0, which has a great impact on socio-political economy stability, sustainable development in general and sustainable business in particular. This greatly impacts to people and families in society, cutting off the main or only source of income, cutting off the means of living of workers and their families, pushing these people into distress situation that they have no ability to pay for daily expenses. In addition, this increases homelessness, mental and physical harm to workers, etc. For Vietnam, the industrial revolution 4.0 is clearly a global trend that we will be caught in. It brings many prospects but also poses challenges when the factors that Vietnam has been considered as dominant as the young, abundant manual labour force will no longer be strengths, even seriously threatened by the robot technology development. When a worker loses his job, the life quality of the unemployed person is not guaranteed. This cannot be called a sustainable business. According to the General Statistics Office, the total population of working age in our country (aged 15 and above) is 72.20 million people, of whom more than 80% have not received technical training. Highly qualified human resources (from universities and above) are of small quantity, quality generally does not meet the rapid changes of modern technology. Specifically, the university and post-graduate level have 5.37 million people (accounting for 7.43% of the labor force); There are 1.9 million (accounting for 2.63% of the labor force) people for college, 1.87 million people (accounting for 2.6% of the labor force)for primary training. Thus, the labor force of our country today is mainly simple labor at low level. With the quality of such human resources, access to industry 4.0 will be a big challenge for Vietnam. 249
6. In view of the fact that Vietnam's trained labour still is lacking and weak in soft skills such as teamwork, foreign languages, critical thinking, creativity, technology adherence, etc. Especially, although the technical, technological and research skills that modern thinking needs, educational institutions have not yet included in the curriculum so that it can be applied immediately when under graduating. With such a situation, the low labour cost advantage in Vietnam is gradually losing its attractiveness to foreign investors. If not corrected in time, Vietnam is difficult to catch the opportunity from the industrial revolution 4.0 in economic development. Therefore, now the State must have synchronized policies to improve the education quality, enhance the labour quality to meet the demand of the times. Second, the industrial revolution 4.0 forced businesses to increase applying science and technology in production, improve product quality and competitiveness. In today's integrated economy, productivity and product quality are the key factors that figure the competitiveness and long-term viability of a business. Therefore, it is necessary for production and business enterprises to apply, improve, innovate technology, and consider technology as a strategic tool to develop enterprises quickly and sustainably. Vietnam is positioning itself in the race for global competitiveness. In particular, the business community must play an important role, even as the centre of the sustainable development goal and enhance national competitiveness. The essence of the application of science and technology is to increase research and application of automation in production, because we realize that automation of production processes allows cost reduction and high labor productivity, improved production conditions, ensuring stable productivity, product quality. At the same time, automation also allows for specialization, production swap. Production processes that use too much human labor are very time-consuming, affecting work quality and labor productivity, making it difficult to operate and manage production. Automated production processes allow the removal of above disadvantages. At the same time, automation has changed the nature of labor, improving the working conditions of workers, especially in the stages of toxicity, heavy work, tedious tasks, gradually overcoming the difference between mental labor and manual labor. Automation in the production process allows to meet the intensity of modern production labor. With large quantities of products (billions of items in a year) such as nails, electric bulbs, zippers, etc., manual production processes can not be used to meet the required yields with smallest costs. Moreover, automation allows for competitive performance and production conditions. Demand for the product will determine the level of automation required in the production process. Examples of products such as electric bulbs, automobiles, household electrical appliances often have very high market potential, but are made by a lot of manufacturers. Only large quantities of production on automatic production lines can produce low cost and high economic efficiency. The use of highly automated production processes in these cases is essential. This factor is a good stimulus for competition in the market economy. Competition eliminates the producers of low-quality, high-cost products. Competition forced manufacturers to innovate, applying automation to produce better 250
7. products at cheaper prices. In fact, many manufacturers are unable or unwilling to innovate and apply production automation, leading to market failures. In fact, some Vietnamese enterprises have initially approached the achievements in science and technology both in the country and internationally, etc. through which a number of enterprises have promoted investment in technology innovation, produced high-quality products and innovated management by applying quality management systems under international standards and Vietnamese standards to create quality products with competitiveness in the market. However, many countries in the world have stepped into the industry 4.0 while many Vietnamese companies are using out-dated technology. Therefore, people have to "go one step ahead" with policies such as the Government should have policies orienting labour market, enterprises should invest in machinery to automate in production, apply technology solutions to improve productivity. In terms of resolving technology problems, technological reasons in backward factories are that enterprises do not pay much attention to technological innovation due to limited financial resources (96% are small and medium enterprises, among them, direct manufacturing enterprises account for a low proportion). Enterprises also do not pay attention to research and development of science and technology to enhance competitiveness and promote development. In addition, the state policies on supporting technology innovation and renovation are not attractive, conditions are still strict, not enough legal basis to promote and attract investment business to innovate technology. Therefore, it is necessary that policies to encourage and support enterprises to innovate technology must be synchronous and easy to carry out; Organizing training on management, technology administration and updating new technologies for enterprises, etc. In addition, the State should support enterprises to research, trial production, application of advanced technology; training, hiring design experts, producing new products and changing technological processes; help enterprises to use national key laboratories to research, design and manufacture new products. At the same time, the State needs to create favourable conditions for Vietnamese enterprises to cooperate with foreign organizations on science and technology exchange and application to improve the technology management ability in each enterprise. Third, businesses need to pay more attention to environmental protection, avoid environmental pollution affecting the health and life of people. At present, awareness of enterprises on environmental protection activities is constantly improving; many businesses consider environmental protection activities as an effective channel to promote their reputation and brand. Many enterprises have constantly improved, invested in environmental friendly modern technology, invested in research and improvement of appearance and quality to produce environmentally friendly products. Environmental experts said that the current global trend is the green economy and low-carbon economy. This also confirms the relationship between the economy, social welfare and environmental protection. It is time to be aware of which development model has little impact on the environment, which model brings real happiness for the Vietnamese people. In developed 251
8. countries, the general trend in technology innovation has been identified as a trend in research and development investment to bring more advanced, more efficient, cleaner, environmentally friendly technologies towards green growth – emission decrease and energy savings such as companies in Germany, South Korea, Japan, etc. The fact in other countries also shows that promoting green growth or the transition to a green economy creates enormous potential for achieving sustainable development and poverty reduction at a high rate for all countries. Recently, the tendency of sustainable economic development that less pollute environment is more and more attention and becomes one of the priorities of many countries in the world. To do this, there should be coordination between competent state agencies and the business community. Enterprises should seriously carry out the impact assessment and environmental protection commitments when planning their investment projects. Companies need to run the equipment continuously when going into production, avoiding the operation situation for dealing when the management agencies check. At the same time, it is necessary to improve the corporate social responsibility for environmental protection. The important point in the environmental protection of enterprises today is the harmonious settlement between environmental protection and maximizing the interests of enterprises in business. Therefore, it is necessary to change the awareness to protecting the environment of enterprises and it is necessary to consider environmental protection as not only a legal responsibility but also a moral responsibility of an enterprise for the commune. We are in the era of industrial revolution 4.0, the era of development based on endless energy - that is the man creation. And it is time to change to keep up with the times. Moreover, in the business of businesses, it is not only the exploitation and use of resources but also the high technology application to protect the environment, creating new sources of energy and materials to replace the naturally exhausted resources to meet future long-term development. REFFERENCES 1. National Institute of Scientific and Technological Information (2017): Industrial Revolution 4.0 - Opportunities and Challenges, Financial Journal, June 1, 2017; 2. Nguyen Ngoc Thuong: Industrial Revolution 4.0 and Issues with Vietnam, People's Police Journal, December 18, 2017. 3. General Statistics Office: Census table of population aged 15 and above by professional qualification, 4Q / 2017. 4. Dr. Nguyen Ngoc Khanh: Vietnamese private enterprise before the industrial revolution 4.0, Finance Journal, August 6, 2017. 5. Dr. Le Tuan Ngoc, MSc. Hoang Thi Kim Oanh (2017): The 4.0 Industry and the Challenges for Vietnamese Workers, Finance Journal Vol.1, June 1, 2017 6. Vietnam Academy of Social Sciences, Fourth Industrial Revolution: Some Characteristics, Impacts and Policy Implications for Vietnam. 252