Never mind manufacturing, here's Service 4.0

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The past year has seen much attention on the notion that technology such as artificial intelligence, human-machine interfacing and the Internet of Things is transforming the nature of employment.

Most of that attention has focused on changes in the manufacturing sector, or what has been dubbed 'Industry 4.0', but University of South Australia's Dean of Research and Innovation, Professor Andrew Beer, says the latest research suggests Australia should reconsider this emphasis.

"Industry 4.0 will fundamentally transform manufacturing globally," he says, "but the direct impact of that transformation on the local economy will be minimal, mainly because less than nine per cent of the Australian workforce is employed in manufacturing."

Prof Beer's research into which sectors of society are most likely to be impacted by technological change indicates the most significant outcomes for the Australian industrial landscape will occur far beyond the factory floor, as the nation's extensive service sector embraces new ways of interacting with clients and customers.

"These new technologies and new approaches to business are already having a big impact on the services sector, and that is only going to increase," Prof Beer says.

"What you will see is a growth in manufacturing-associated industries, chiefly professional services providing the support and knowledge needed to sustain the advanced manufacturing of the future."

While Prof Beer acknowledges advances in data processing and machine learning will change many service operations over coming years, he also predicts this will be more evolutionary, and far less disruptive than similar changes may be in the manufacturing sector.

"In Australia, we're an open competitive economy with a reasonable social welfare support system and we have embedded adjustment into our economic structure," he says.

"We're continuously changing, which means we don't experience those enormous shocks you see in some economies where an entire industry closes or where something else happens and leads to mass job losses."

While transitional programs, such as the establishment of an advanced Testlab at UniSA, have been initiated to assist manufacturing businesses adjust to the changes of Industry 4.0, Prof Beer believes the accompanying Service 4.0 transformation should be easier to manage internally for most firms.

"Directors who bury their heads in the sand may face the kind of disruption that wipes out their enterprise," Prof Beer says.

"But a computer can't make all the empathetic, nuanced decisions that a human can in response to human needs, and ultimately, that is what the service sector is built around – people.

"AI might be able to help a service business, but we are a very long way off AI being able to run one, so directors and their teams need to see the current and coming changes as opportunities to improve their services, not threats that can replace them." 

 
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