The first green industrial revolution
Winter in Finland is spectacular. Bright sunshine, t-shirt warmth, sunbeds on every balcony.
Well, perhaps not quite. But it is getting there.
Finland’s warming rate is approximately double the global average, an acceleration that is melting snow, disrupting tourism and threatening indigenous wildlife.
Similar changes are happening everywhere.
More sandstorms in Algeria.
Infernos in California.
And here in Davos, the Alps are already being reshaped, through thawing ice, greater rainfall and more rock slides.
Climate change is a reality. And because of this, we are compelled to act.
Some progress has been made. For example, over 200 cities across the world have individual emissions-reduction plans.
But the truth is that a piecemeal approach is not sufficient.
Global crises require global responses.
And what spark exists, capable of galvanizing all of us, together, at a time of social, economic and geopolitical uncertainty? A time when the political will for multilateralism seems thin on the ground?
The answer is Industry 4.0.
Powered by 5G.
It has the power to make our society far more sustainable through a triple whammy of revolutions: in our economies, our industries and our connectivity.
The economic revolution
Recent estimates suggest that “greening” the world’s cities, which produce the majority of CO2 emissions, would cost approximately 2% of global GDP.
That is a huge ask, particularly when economies remain fragile.
You change that by increasing productivity.
Previously, leaps in productivity have been powered by physical technologies reaching a new level in diffusion or efficiency.
Look at the early 1950s, when health care, transportation, energy and communications all went up a notch at roughly the same time.
This was followed by a golden decade in which annual productivity growth jumped by 33%, and living standards and life expectancy went through the roof.
Today, we can see those same technologies – health, transportation, energy and communications – reaching new standards of efficiency through digitalization.
Think about digital health, with AI-driven diagnostics. Or digital energy, with smart grids.
We also see the arrival of a fifth changing technology: advanced industry, characterized by networked robots and intelligent control systems.
Together, these digitalized networks will underpin a new era of productivity. Beginning, data suggests, around 2028 in the US, then in China, India and elsewhere.
When it happens, we predict that productivity will jump by 30 to 35%, adding trillions of dollars to the global economy and more than offsetting the cost of “greening.”
The industry revolution
The second revolution is industrial. Simply, making entire sectors simultaneously more productive and less wasteful.
The Fourth Industrial Revolution allows us to make sure farms use as much as they need – no more, no less.
For example, Nokia worked with a peach farmer in Algeria to bury probes just beneath his irrigation lines.
The probes collected information on soil temperature, humidity and other metrics. These readings were analyzed by machine learning, cross-referenced against historical rainfall data and fed to the irrigation pipes, which then let out just enough water to optimize soil nutrition.
After one month, the farmer was able to reduce water consumption by 40% per irrigation line, while increasing revenues by 5%.
Similar solutions proliferate in almost every sector – particularly physical industries that have been somewhat left behind by previous leaps forward in technology.
Mining, for example. The WEF suggests that the Fourth Industrial Revolution could unlock over $425 billion of value in the mining sector by 2025. While at the same time reducing CO2 emissions by the small matter of 610 million tons.
Or manufacturing, one of the most obvious beneficiaries of the Fourth Industrial Revolution, with a potential added value of almost $2.7 trillion every year.
A 2014 study estimated that by 2025 manufacturers could cut CO2 emissions by up to 525.5 megatonnes solely by utilizing 3D printing.
Huge gains. Across all sectors.
The connectivity revolution
And that brings me onto the third coming revolution – connectivity.
This revolution, with 5G at its core, is already taking root.
5G is natively green. Its “lean carrier” feature improves spectral efficiency, meaning energy consumption per bit is reduced by up to 60%.
But power consumption is not the only thing that will change. Operators will too.
The Fourth Industrial Revolution will put them on a journey towards providing more – and better – services to businesses. These will be bespoke, fast-changing solutions that can support the new efficiencies that I mentioned earlier, while opening up a new potential market for operators of around $1 trillion.
That is the path to growth for those operators, and to greater productivity and sustainability for enterprises.
And that is the coming trio of revolutions: in economies, industries and connectivity.
There is a lot to be gained, but also a lot that needs to be done.
Governments should support Industry 4.0-friendly policies. They must see spectrum auctions as enablers for infrastructure, rather than cash cows. They must back public–private partnerships.
As must enterprises, which need to be bold and try new things.
They should explore how the Fourth Industrial Revolution can unlock cost savings and productivity gains through automation, edge cloud and better security. There is huge potential for businesses willing to connect assets and be ambitious.
And operators need to invest in 5G, mobilize to sell services to enterprises and grab first-mover advantage.
And one more thing, for all of us: for once, let us not just talk. Let us act.
We only get one shot at this.
Yes, it will require investment.
Yes, it will require upheaval.
But I firmly believe – and the data clearly shows – that Industry 4.0, cultivated in the right way, can, for the first time in human history, boost economic growth while diminishing our environmental impact.
Do that, and we give our communities, our businesses and our planet the best possible future.
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