15 May, 2017
Businesses need help to improve their adoption of new technologies, materials and processes to take advantage of the productivity gains these can bring, the Organisation for Economic Co-operation and Development (OECD) has said.
The development and implementation of new technology is mainly being undertaken by larger firms, and even these are underusing it, the OECD said in a report on the next productivity revolution or 'Industry 4.0'.
The OECD report looks at the potential effects of a range of technological development, from the internet of things and advanced robotics, the environmental impact of 3D printing to autonomous digital systems to advances in biotechnology and nanotechnology, and at what policymakers can do to promote their use and manage the related risks.
"Some of these technologies are already used in production, while others will be available in the near future. All are developing rapidly. As these technologies transform the production and the distribution of goods and services, they will have far-reaching consequences for productivity, skills, income distribution, well-being and the environment. The more that governments and firms understand how production could develop in the near future, the better placed they will be to address the risks and reap the benefits," the OECD said.
Governments must recognise the potential of technological advances to boost economic growth, living standards and environmental sustainability, but at the same time manage the risks and disruption this next revolution will cause, it said.
Policy makers can create the right conditions for the adoption of new technologies and knowledge, particularly among smaller businesses, by encouraging skills development and greater interaction between industry and education, the OECD said.
Munich-based technology expert Eike Fietz of Pinsent Masons, the law firm behind Out-Law.com said: "We are talking about extremely complex technologies which bring along truly disruptive changes. The OECD report may be a little bold in suggesting that businesses ‘underuse’ 'industry 4.0' technologies. Businesses not only have to cope with the technological challenges and the impacts on supply chains and processes, but have to adopt a holistic approach and to review their entire way of doing business."
"The report covers topics as wide ranging as knowledge and skills as well as public trust. In reality, just as one example, businesses in developed countries have to cope with aging work forces and populations in which they recruit. The older part of that population is, if not computer-illiterate, certainly not digital native. It is one thing to train a 50-year-old welder to use a laptop, but it is another to make him embrace new technologies when he knows that his employer monitors his very movements, including the coffee break. So it is no surprise when the OECD report summarises that ‘long term thinking is essential’ and calls on governments ‘to prepare for developments beyond typical election life-cycles'," Fietz said.
For further information, please contact:
Ian Laing, Partner, Pinsent Masons
ian.laing@pinsentmasons.com
