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How the shrinking digital-physical divide in "Industry 4.0" impacts your innovation process

Many have started observing that The Fourth Industrial Revolution might bring yet another shift in the way companies do business, empower their people and ultimately bring valuable products and services to their customers. It's no doubt that emerging technologies such as IoT, 3D Printing, AI, genetic engineering, unmanned vehicles and others have steadily climbed the adoption curve and will be mainstream before the decade is out.

These valid observations raise some important questions around the boundary between the digital and physical worlds.  My bet is that the boundary has started to blur and in a few years it will stop existing all together. There are some important implications for this on how companies, both big and small,  bring products and services to market. In a world where the physical and digital boundaries don't exist here are our top-5 implications for your innovation process:

1) Evolving early prototypes beyond wireframes

We're not saying ditch the tried and tested wireframe, but keep in mind that it doesn't fully cater for the prototype where thinking about the physical aspects in customer experience is hugely important. For example if you're creating the next generation in-branch banking experience, ensure your early prototypes consider flow through a physical space, ergonomics of the various hardware devices and how these interact with the various digital UIs on devices. 

2) New seats around the innovation table

Tesla, who in our opinion has revolutionised the innovation process, famously places top designers not just at the start of the process, but throughout the lifecycle of their products. In other words, the designers have a seat at the table alongside engineers, always. The result is a beautiful customer experience from buying, through to servicing your new Tesla, and the product is always being improved, even when the vehicle is sitting in your garage.  In the world where the digital-physical boundary blurs, companies will look for new skills around the innovation table.  It won't be uncommon to see top innovators employing architects, urban planners, psychologists and other experts to better understand and deliver the holy grail -  holistic sensory responses in their customers' minds. 

3) Commercialisation at the point of research

Technologies like 3d printing and robotics have the potential to substantially lower the cost of research in major R&D programmes.  This will invariably drive companies to commercialise physical products early and even at times do so before the technology is fully proven. It'll be up to the market to decide what succeeds and what doesn't rather than a company second guessing what its customers really want.

4) A/B tests across entire supply chains

Sensor enabled 'smart products' will be a game changer across supply chains.  Companies will be able to run A/B tests in real time at various stages of the product supply chain with the help of embedded sensors on the product, and other off-product sensors. Imagine your favourite breakfast cereal company bringing a new cereal to market.  With smart sensor technology, they'd be able to tell how effective their manufacturing process is for the new cereal, how effectively can their distributors sell it, how do customers engage with the packaging while it's on the shelf, and exactly how much do they consume each morning.  Top innovators will embrace the sensor to seek quantitative feedback as they scale their products.

5) Delivering world class customer experience by relying more on other people's tech

Companies have come to realise that their customers create their own experience by stitching together products and services from a number of providers.  For example, when I last flew to Sydney, I got an Uber to the airport, used Outlook on my iPhone feverishly to plan out my day, kicked back in the lounge reading the Herald and then enjoyed a iTunes movie whilst I flew AirNZ. The point being all of these products provided me utility, and wow in making my experience enjoyable.  In the new world, winning innovations will come from companies who proactively stitch together these experiences.  The day when the AirNZ app orders my Uber, let's the person i'm meeting on the otherside know that my flight is delayed while i'm in the air,  and allows me to access my Netflix account on the flight isn't far away. In short, the blurring lines between the physical and digital worlds mean that game changing experiences will come from companies that best connect their world to other worlds.

I sure am excited about this new era, where everything is digital, when the word 'digital' stops being relevant.

Economies and people worldwide are starting to feel the first effects of the dawning fourth industrial revolution, a convergence of technologies that is blurring the lines between the physical, digital, and biological in ways that promise to disrupt almost every industry in every country.

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