The fourth industrial revolution, often referred to as Industry 4.0: these words have been appearing lately on the agendas of industry conferences, round tables, and in the media. Nothing about these developments is necessarily surprising since the world has slowly but steadily entered a new format of economic and industrial activities, characterized as the fourth pattern.
What is to come of the next industrial revolution? When thinking of the answer, we are primarily talking about the cyberization of industrial production and the subsequent erasure of physical, biological, and digital boundaries.
This concept was first formulated in 2011 at the Hannover Fair, and the primary visionary who outlined the main contours of the beginning of the change of milestones was the founder and chairman of the World Economic Forum, Klaus Schwab. According to Schwab, at the new stage of development, cyber-physical systems (systems that combine physical objects and cybernetic, such as digital) will begin merging and integrating into a single network. They will be able to tune themselves and self-train, introducing new patterns of behavior and response. These activities will have a high degree of autonomy from humans.
Schwab described each of the prospects for any forthcoming changes: the possibilities of billions of people connected by mobile devices with enormous power and memory, providing access to all the knowledge of humanity, are truly limitless. These possibilities will be multiplied by new breakthroughs in artificial intelligence, robotics, the internet, autonomous transportation, nanotechnology, materials science, and quantum computers. Artificial intelligence is already here in the form of autonomous cars, drones, virtual assistants, and software translators, yet it still has a large amount of room to grow.
Experts have spoken about several of the fourth revolution’s most critical drivers of change. Among them, they distinguish the development of cloud technologies, a set of approaches to the formation and analysis of Big Data, biotechnology, and, in the consumer sphere, crowdsourcing and sharing economy.
Undoubtedly, these changes do not arise by themselves. The fourth industrial revolution directly continues the changes defined by the third revolution, which began in the middle of the last century with the automation of production and the development of digital computer technology. Despite the profound continuity, the new wave of renewal may bring dramatic changes that will not be limited to industrial production. We are talking about possible changes in the social structure and everyday life of billions of people living on Earth.
One of the main threats associated with the described economic transition is rising unemployment. According to some experts, millions of jobs have disappeared in the past few years due to robotics and digitalization. The downward trend in employment is expected to continue soon, with office and administrative workers particularly likely to be hit hard.
However, this will be partly offset by the emergence of new or rapid growth in previously narrow, niche occupations, including engineering, finance, and computer science. However, this growth will be uneven; developed countries will benefit from it more than developing ones. Moreover, some states where low labor costs compensate for the lack of modern technology will face serious problems.
Experts are in unanimous standings that the primary beneficiaries will be countries, companies, people representing intellectual capital, and, to a lesser extent, financial capital. Those that do not benefit from these changes are bound to be low-skilled workers, as are their geographical centers of localization.
Areas of economic activity in which the processes of the 4th industrial revolution are already intensively developing (according to the World Economic Forum 2019):
- Autonomous robots in logistics, manufacturing
- Precision farming using drones and sensors
- Digital twins in business
Who Can Squeeze the World Leaders?
Of course, the predictions above do not belong to all of the self-fulfilling. The world and individual states still have room for maneuvering, enabling the ability to smooth out the adverse effects of the beginning changes.
It is no coincidence that the Hannover exhibition was the first presentation of Industry 4.0; Germany is the country that is the most advanced in introducing new industrial production practices. German industrialists and officials have secured investments of about 40 billion euros annually. This money then goes into developing Internet infrastructure to merge digital and manufacturing agendas and creating global standards for industries emerging from the 4th generation of the industry.
Similar initiatives are being introduced in other countries around the world. Among the pioneers are China and South Korea. In the U.S., a non-profit association called Industrial Internet coordinates the interests of some technological giants in the industry, including Intel, AT&T, IBM, and General Electric.
Elsewhere, other countries that could potentially compete with the established leaders in the technology race are lagging. This includes Russia, which could take advantage of the shift in the industrial structure to realize its intellectual potential fully within the economy.
It cannot be said that the authorities in the Russian Federation are not aware of the industrial and digital renewal processes that are taking over the world. On the contrary, they are very aware of it, and measures are being taken to act on them. Last fall, for example, the Russian government signed an agreement with the leadership of the World Economic Forum on creating the Center of the Fourth Industrial Revolution in the country. The plans for the center were comprehensive, including the active involvement of leaders of the global IT industry in the Russian economy and their cooperation with the national government in introducing modern developments into the country’s life.
It is clear that a sharp change in political circumstances, which occurred in early 2022, buried these hopes. To put it in more optimistic terms, it forced them to postpone their realization to a much more distant perspective. However, does this mean that Russia was excluded from the number of active participants in the transition to the new industrial model? Personally, we don’t think so. This conclusion was found because the banner that fell out of the hands of government structures turned out to be ready to be picked up by local businessmen, not all of which having to happen on a grandios scale.
A Leap from the Second Echelon
It is no secret that the industrial sector of the Russian economy resembles the industry of South Korea 20-30 years ago. Carbonization, once born in the slang of specialists in Seoul investment projects, is now quite applicable to Moscow’s industrial policy. However, the country’s industrial renewal locomotives are not Russian chaebol giants but entrepreneurs of the second or third row.
A striking example is executives of the investment company Euroinvest, Andrey Berezin and Yuri Vasiliev. Obviously we cannot say that industry experts and the public at large do not know them; they are known primarily for their construction activity, which was the main occupation of the holding not so long ago.
Then, quite imperceptibly, there was a change in the priorities of the company’s owners and in its daily work, which made the same Berezin the main speaker on the subjects of the fourth industrial revolution in Russia.
Here is just one example of his statements on this topic, which caused a noticeable public response: “For the fourth industrial revolution, markets do not mean much anymore. This is the time of the knowledge economy… If you know, you don’t need machines or markets. You come up with the product, and the rest of your product will be brought to your production and sales. Only human capital, the country’s intellectual potential, matters. In the world, only what you can invent yourself is valued. There is a division between those who can create something and those who are useless to the world, even as consumers. This is happening everywhere. And the main thing for us is not to fall by the wayside at all.” This is how the co-owner of Euroinvest outlined the problem of how the current changes affect the domestic economy in his interview with one of the media outlets this summer.
If Berezin had merely said so, it would hardly have been worth much. Instead, he and Evroinvest have become agents of the country’s economic and intellectual renewal.
Just look at the latest decision of the holding’s management to create in St. Petersburg, the motherland of Euroinvest and its founders, a completely new educational institution capable of training future specialists for breakthrough technical professions.
It is an academy designed for gifted children, predominantly those with a mathematical orientation. The head of the holding intends to invest significant resources in its creation. It will begin with constructing a complex of buildings will include classrooms, living quarters (the latter are necessary because the academy is planned as a boarding school), sports, laboratories, and creative units. Following the constructions, serious investments are expected in the staff; according to Berezin, only the best teachers can provide a decent education. Moreover, some teachers have already been found; according to the information announced by Berezin, some staff members of physics and mathematics school No. 45 in St. Petersburg will take the job.
Even such a large and ambitious project would not solely make Euroinvest and its director the standard-bearer of technological modernization in Russia. More importantly, the holding managed to build a real, full-fledged chain of transformation of intellectual capital into innovation developments, which in turn became promising sources of replenishment of financial means.
The initial part of this process (the intellectual capital block) includes several components. One is a network of contracts between Euroinvest and leading technical universities of St. Petersburg and the North-West of the country. These contracts help the holding to find promising future employees from the students’ bench. The second block is a set of initiatives to support young talents, implemented in-house or in partnership. The company independently launched a scholarship project for the city’s best undergraduate and graduate students. In addition, a joint effort with the Leonard Euler Mathematical Foundation helped to hold some educational platforms for young scientists.
At the center of the design are Euroinvest’s innovation and technical facilities. Several enterprises in the city have been bought in recent years. The new owners could achieve profound results simply by ensuring a deep technological renovation of their facilities and employing professional staff. Today, the production base of the holding will lead to the production of breakthrough projects in various fields.
Some of these projects are related to medicine, including a new generation of biochips which will help accelerate the procedures for analyzing the genome of any living creature ranging from viruses to humans. The microfluidic analytical chips currently being developed by the holding companies are based on nanotechnology. They can provide a qualitative leap in power for polymerase chain reactions, which are now used to detect the COVID-19 virus. despite this, they will help create resources for personalized genetic diagnostics.
The project of a medical robot to treat lung cancer is no less interesting. The apparatus affects tumors using X-rays, and its design features allow it to be used directly during surgical operations. This results in precise treatment with low side effects and a qualitative increase in efficiency. Soon the first customers will have to receive and test the new device, and then it will enter the international market.
Other projects in the holding’s piggy bank include developing traction batteries for domestic electric vehicles, creating a new generation of microstrip boards, and location sensors for estimating ice cover thickness. This list is truly expansive, ranging from a large array of improvements that will influence many industries moving towards the fourth industrial revolution.
The implementation of such innovative developments is already yielding financial results. A few years ago, housing construction was the main and only source of Euroinvest’s income. This summer, in an interview with a mass media station, Berezin said that development projects makes up half of the money earned by the holding. Considering the holding assets structure, it is clear that the second half of the income is dominated by industrial and innovative money. In other words, the example of Euroinvest and its manager proves that even a small business can find resources to turn itself into a center of industrial modernization. If such centers become sufficiently numerous in Russia, it will be able to enter a number of countries – they will become leaders in implementing the fourth generation of the industry.
Press Portrait:
Andrey Berezin was born in 1967 in Leningrad.
He graduated from high school № 239 with an advanced study of mathematics. In 1990 he graduated with honors from Leningrad Ustinov Mechanical Institute with a degree in automatic control systems engineering. In 1990, he enrolled in postgraduate studies at LMI and started a similar business.
In 2017 he was awarded a certificate of honor by the Ministry of Industry and Trade of Russia for his significant contribution to the development of Russian industry and many years of diligent work.
Euroinvest Investment Company is a multi-profile holding company that has been carrying out investment activities in St. Petersburg, the Leningrad Region, and other regions of Russia for several decades. The range of Euroinvest investment interests includes high-tech industry and innovative developments to real estate development and comfortable housing construction.
One of the critical elements in the structure of Euroinvest Group is its construction division, Euroinvest Development, which builds housing and other facilities, thus forming a full-cycle development business.
