White Paper January 2019 In collaboration with McKinsey innovation is long overdue. Organizations that have taken Fourth Industrial Revolution innovation to scale beyond the pilot phase have experienced unprecedented increases in efficiency with minimal displacement of workers. However, most companies appear to be stuck in “pilot purgatory”. Widespread adoption of Fourth Industrial Revolution technology at scale, through the combined efforts of companies and governments, can lead to a sizeable increase in global wealth production, benefiting people throughout society. The Fourth Industrial Revolution in manufacturing remains a top priority for many leaders of private and public organizations. It is having an enormous disruptive impact on value chains, industries and business models. With one-third of the total economic value of the internet of things (IoT) coming from production, 1factories are the centre of gravity of the ongoing revolution. While manufacturing represents 16% of global GDP , 2manufacturing industries account for 64% of global R rather, they can complement each other: Innovate the production system: expand competitive advantage through operational excellence. Innovate the end-to-end value chain: create new businesses by changing the economics of operations. Lighthouses have employed five value drivers to create impact at scale using Fourth Industrial Revolution technologies. They demonstrate four distinct capabilities that serve as scale-up enablers. The annex of this white paper provides perspectives from lighthouses that exemplify these value drivers or enablers. The value drivers are: Big data decision-making Democratized technology on the shop floor Agile working models Minimal incremental cost to add use-cases New business models The four scale-up enablers are: Fourth Industrial Revolution strategy and business case IoT architecture built for scale-up Capability-building through acquiring new skills Workforce engagement In addition to the perspectives offered in the annex, this white paper offers an in-depth look at two lighthouses operated by two companies that differ substantially in size. The first, Procter & Gambles Rakona plant, represents 7 Fourth Industrial Revolution: Beacons of Technology and Innovation in Manufacturing a large multinational. The other, Rold Cerro Maggiore, is operated by a small SME headquartered in Italy. The story of change at each of these sites offers valuable insights into the broad transformation occurring in the manufacturing environment. The World Economic Forum issues a call to action to break out of productivity stagnation and address the significant challenges such as climate change, resource scarcity and an ageing workforce the world is facing. The Forum suggests six principle-based actions to ensure the Fourth Industrial Revolution in manufacturing delivers the maximum positive benefit for society: Augment, instead of replace, the operator. Invest in capability-building and lifelong learning. Diffuse technologies throughout geographical areas and include SMEs. Protect organizations and society through cybersecurity. Collaborate on open Fourth Industrial Revolution platforms and handle data carefully. Address the challenge of climate change using Fourth Industrial Revolution technologies. The responsibility for action lies with both the public and private sectors, and the Forum encourages them to engage the network of lighthouses to be part of a unique learning journey. By engaging the findings and example of the lighthouse network, organizations and governments can realize the great potential that lies with the Fourth Industrial Revolution in production. Coupling this knowledge and technology with a commitment to environmental stewardship and social responsibility can play a role in driving the next economic growth engine towards a brighter future for all of society.