Insurers don’t like to cover cattle, and that complicates life for farmers.
To understand why, consider that insurers can see what happens when cattle are in a feedlot, at stud, or in a truck. Those observations make it possible to price risk.
However cattle roaming across enormous stations can end up in all sorts of situations that defy actuarial interpretation. The result is that cattle are low-value assets until they’re under human gaze and lenders don’t think farmers deserve their lowest interest rates.
If a cow can be monitored and its behaviours predicted, or the watering troughs on which they rely checked to ensure they’re full and clean, a cow faces fewer risks. Perhaps so few risks that insurers will offer cover and banks decide farms are more worthy of investment at lower interest rates. Better access to capital lets a farm invest in further improvements … and the rest of the story tells itself.
How to start that virtuous cycle by de-risking cattle?
Piers Hogarth-Scott, KPMG Digital Delta’s National Leader for the Internet of Things, believes the tools of the fourth industrial revolution (4IR) - monitoring devices, ubiquitous connectivity, 3D printing and advanced analytics – can propel farms and other businesses to new levels of prosperity
“The fourth industrial revolution is the convergence of the physical, digital and biological worlds,” explains Hogarth-Scott. Convergence is critical because previous industrial revolutions relied on one technology at a time – the steam engine, electricity, and the rise of computers and IT.
With many technologies now combining to drive change, Hogarth-Scott feels the results will be more profound.
But he also feels that attempting to predict the impact of the fourth industrial revolution is a “delusional” exercise, whilst recognising it will be all encompassing and fundamentally transformational. For now he’s more comfortable sharing some business scenarios that show the power of the monitoring, connectivity and analytics working in harness.
The cow-tracking scenario outlined above is one. Another changes the way water is managed.
“Drinking water and sewage uses many kilometres of underground pipes and it is very hard to know when you've got a leak,” Hogarth-Scott explains. “By instrumenting those networks, what we're seeing is that the ability to use artificial intelligence machine learning for predictive maintenance that offers accurate estimates of when a pipe will break.” Such modelling leads to preventative maintenance that is cheaper, faster, and less disruptive than emergency repairs.
Hogarth-Scott goes on to say “The combination of Artificial Intelligence and the Internet of Things, for example, has the potential to dramatically accelerate the benefits of digital transformation for consumer, enterprise, industrial, and government market segments.
AI adds value to IoT through machine learning and decision making; and IoT adds value to AI through connectivity and data exchange”.
Another one of the multiple the scenarios he feels have a tangible effect involves changes to education.
“Augmented reality and virtual reality have a role in healthcare. Today students read a textbook to learn anatomy. Apps already exist that use augmented reality to effectively let you peer through the exoskeleton of a three dimensional figure to actually understand all the different parts.”
“It is a completely different learning experience” and will change the way education is conducted.
Dr Peter Layton, a Visiting Fellow at the Griffith Asia Institute, Griffith University, recently suggested that the fourth industrial revolution has the potential to change the way Australia defends itself.
Writing for The Lowy Institute’s Interpreter web site in March 2019, Layton pointed out that military equipment is very specialised, is often available only from very few sources but is most in demand when defence forces are active.
Defence forces stockpile supplies to avoid dependence on supply chains made fragile by conflict, Layton wrote, before suggesting that distributing designs over the internet to micro-manufacturing plants offers a better solution.
“Parts could be produced quickly when needed years after the initial product development and production, especially if the parts are designed under 4IR principles allowing use of commercial general-purpose advanced manufacturing facilities not solely defence-specialised plants. Importantly the 4IR PDP loop means deployed products can be continually monitored and have maintenance components and logistic support items made and delivered to the user just-in-time,” he wrote.
“All this would sharply improve Australia’s defence self-reliance. The Australian Defence Force’s operational dependence on timely deliveries by overseas suppliers of equipment and spares would significantly reduce.”
Governments will also need to change policy settings as the 4IR gathers pace. Australia has already convened a Prime Minister's Industry 4.0 Taskforce to assess the impact of the 4IR on industry. The World Economic Forum, whose founder executive chairman Klaus Schwab coined the phrase Fourth Industrial Revolution, recently offered its view on how infrastructure policy should evolve to harness the 4IR’s potential.
In a November 2019 “Guidebook”, the Forum suggested how governments can ensure the 4IR better serves society.
One idea the Forum advanced is new thinking about infrastructure, by “focusing on community outcomes, not physical assets: It is tempting to define future infrastructure requirements in terms of specific assets: “this city needs light rail” or “we must expand our motorway” are some examples. Defining projects in terms of social outcomes … leaves an opening for technological innovation to deliver those outcomes.”
Another called for “The necessity of recognizing and respecting infrastructure’s ‘data layer’,” because the data produced by infrastructure can better inform its use and future planning.
“Much like traditional infrastructure assets such as airports, utilities and community facilities, these data pools will become highly valuable and highly sensitive assets, requiring owners with the right character operating under the right oversight.”
KPMG Digital Delta’s Hogarth-Scott feels other considerations must include the ethical implications of 4IR technologies becoming commonplace: it is uncertain who would be liable if a self-driving car informed by a carelessly-collected data model injured people in an accident.
Ethics also means organisations need to consider how 4IR will impact employees, to protect both their businesses and their people.
Looking ahead, Hogarth-Scott envisons that “the future that my children will enter as adults will be fundamentally different from today.
"Within the next ten years they will have access to perfect knowledge, three billion more people online to interact with, may choose not to own a car, can get a genome sequenced for less than $10 and will be able to buy a $1,000 PC with equal processing power to their brain.”
“And in the next 20 years they will have a personal AI ‘shadow brain’, will not be permitted to drive on the freeway, AI for their GP, will be completely in charge of their own health, and the bathroom (or lavatory to be more specific) will be the most connected device at home.”
“There are lots of roles that are changing accordingly. Most organisations will not go untouched by this change. Any organisation that is not thinking about how the fourth industrial revolution will impact them is in danger. This revolution is going to impact every operating model.”
