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The Journey Ahead

The global economy is on a time-constrained path to (re-)industrialisation.  Development of entire new, net zero carbon industrial supply chains that span the globe is being fast-tracked.  The 4th industrial revolution is proceeding with scope, at scale and speed.

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Scope

“The fourth industrial revolution…is not only about smart and connected machines and systems. Its scope is much wider. Occurring simultaneously are waves of further breakthroughs in areas ranging from gene sequencing to nanotechnology, from renewables to quantum computing. It is the fusion of these technologies and their interaction across the physical, digital and biological domains that make the fourth industrial revolution fundamentally different from previous revolutions.”—The Fourth Industrial Revolution by Professor Dr-Ing Klaus Schwab

The wider scope of the 4th industrial revolution will lead to technology-led disruption impacting a broader array of economic sectors, many of which are capital intensive, requiring technology-led disruptors to undertake more capital investment upfront and in larger amounts to realise meaningful economies of scale.  New technologies and business models being applied to more traditional, capital-intensive industrial sectors can necessitate significant up-front investment in new production capacity.  The capital-light operational scalability of the 3rd industrial revolution’s technology-led, venture-backed start-ups will be replaced with traditional capital-heavy economies of scale as the principal driver of shareholder returns.

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Scale

Metro

Speed

Climate change and the need to meet net zero targets by 2050 will accelerate the pace of investment compared with previous industrial revolutions, leading technology-led disruptors to undertake more capital investment earlier in their business evolution.  Climate change is expected to accelerate technology and business model adoption, catalysed by a combination of regulatory push from governments eager to meet CO2 reduction targets and demand pull from consumers eager to purchase products and services consistent with climate adaptation and sustainability goals.

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