The business trend towards automation, machine learning, and artificial intelligence gives a notion of job losses. But the latest number in Germany, for instance, shows up to 90% of companies are looking for people. There is caveat, however. Digital skills are necessary to qualify.

“We are seeing a gradual and evolutionary transition to digital business models. Naturally, businesses want to improve their efficiencies. The human capital is viewed as the limiting factor to this growth,” said Christian Blobner, Head of International Research Networks at Fraunhofer Institute for Factory Operation and Automation, a research institute in Magdeburg, Germany. “The current challenge now is investing in staff qualification at multiple levels. For the government, it means the promotion of lifelong learning,” he added.

The fourth industrial revolution, or what is dubbed as Industry 4.0 is defined as the networking of machines through extensive use of data. The session on Industrial 4.0 at the Jeju Forum on 27 June 2019 in South Korea attracted a room full of locals. South Korea is ranked as the most automated country in the world, while Germany is recognized as the architect of Industry 4.0.

“Industrial manufacturing plays an important role for the economies of Korea and Germany. With almost no natural resources, innovation is key for the success of our two economies,” said German Ambassador to Korea Stephan Auer. “Industry value chains have stopped ending at national borders. Therefore, if we want to remain globally competitive, we need international cooperation,” he stressed.

Auer mentioned the close cooperation between the German and Korean government in the areas of innovation and support for small and medium enterprises. “We’re expecting big changes in the industrial, but also social and political landscape. I40 will change the way we live and work,” remarked Auer.

“We’re in an era where massive amount of data analysis together with automation and artificial intelligence can potentially become general purpose technologies,” commented Dr. Yong Suk Lee of Stanford University, USA. Lee shared how coding is taught as early as middle school in the US. “Digital skills have to be learned at an early stage. Then we can explore how to incorporate technology to solve social issues as well,” advised Lee.

Understanding the ecosystem approach to data is imperative with the rise of smart factories. According to Francis Fong, Honorary President of Hong Kong Information Technology Federation, SMEs have yet to adapt to changes in industry processes. New business models like Uber and Airbnb are also restricted to grow due to stringent government regulations. “Innovation always outpaces regulation,” observed Blobner.

“Today, a piece of regional legislation influences how the world sees the use of data.

GDPR is a prime example,” analyzed Blobner. The General Data Protection Regulation was passed by the European Parliament on 24 May 2016. It guarantees the right to protection of personal data and regulates the processing and movement of such data. The GDPR came into force on 25 May 2018. “This levels the playing field for the data economy,” stated Blobner.

The discussion was facilitated by Karena Belin, co-founder of Hong Kong-based startup community online platform WHub.

The Jeju Forum is considered the Davos of East Asia. World leaders gathered for the event. The session on Industry 4.0 was organized by the Friedrich Naumann Foundation for Freedom (FNF) and the Economic Freedom Network (EFN) Asia.