Fourth Industrial Revolution: the Adoption of Cyber-physical Systems and Impact on the Corporate Compliances

Razia Sultana

The digital technology is an indispensable part of today’s social, professional as well as biological life. More specifically, the connected devices are capable to make communication easier in every aspect like office work / attend academic classes through video conferencing / Skype, catch a cab, online shopping, health check up and so on. Currently, businesses are strongly influenced to invest on latest information strategies in order to boost efficiency. Several researches reported that by 2019 maximum number of multinational companies (MNCs) will sponsor the utilization of the wearable fitness tracking devices for better corporate performance. Here it has to be noted that with the fast moving technological development the data protection regulations should also a prime concern to protect the risk of data misuse. Alternatively, after high profile data security breaches at AOL Inc., Sony, Yahoo, etc. the General Data Protection Regulation (GDPR) is now the first requirement of both business houses as well as existing and potential consumers. In order to enter into the GDPR, the European Commission already have issued the new laws and enforced from May, 2018 and all companies are now required to comply the processing of data for the EU citizens. On the other hand, over 11 states of the United Sates (US) have been introduced 21 privacy laws since constituents have failed to introduce federal rules and regulations. Fortunately, good news is that Companies have been taken considerable initiatives to adopt privacy laws in order to secure data through digital transformation. Besides data security, several changes of the fourth industrial revolution will be challenging and a snap of those are –

Effect on the scope of employment – due to increase of automation there will be a significant effect on employment numbers and it will be inevitable that the nature of job and required skills to perform those jobs will change radically. A recent research reported that 60% of the existing job nature will become automated soon. Consequently, a large number of jobholder will have a need of finding new job along with to learn new job skills and it will significantly effect on social inequality as well as unemployment. Moreover, legal reformation and its combination while partnerships with the government agencies, academia along with business houses will be required to ensure new scope of job opportunities and insufficient resources will harnessing those opportunities.

New compliance challenges due to technological

and commercial advancements – this has the potential risk to expose businesses because a particular role to contribute efficiently through automated modes but violation of anti-discrimination laws at workplace shall require human-based decisions. Conversely, with the advancement of first industrial revolution the Intellectual Property patronized innovation significantly and now at the commencement of a new industrial revolution protection of both the innovators along with the users of innovation is essential to ensure its successful growth.

Challenges to protect the fundamental right to privacy –

the new revolution in the law is in need of new developments in order to ensure the primary law and regulations and their effect on the companies to protect entire employees as well as companies data and what would be the stiff penalties for the non-compliant companies. Moreover, a uniform legislation system would be beneficial for a specific geographical area like EU. For example, in South Africa, the data protection law is enacted as the Protection of Personal Information Act (POPIA) and motto of the law is to – i) protect personal information of the common people, ii) ensure fundamental right to privacy in order to stop being hacking of individual ID as well as money from the bank account, etc. The prime objective of any legal reformation should be enough competitive so that the legislative framework would capable to take into account the changes brought by the new industrial revolution. Additionally, the newly developed markets as a result of the fourth industrial revolution should have sufficient scope to meet the increased need for the services of the legal as well as compliance profession.

Effect of the Bulk Data – though already there have few solution regarding bulk data-related challenges a sound legal outline is till in need. Elaborately, the existing legal framework is not adequate capable to adopt the new data mining technology where better, cleaner and richer data therefore, specific areas of the existing law would not be user friendly during tracking the broad industry trends related to the strategic planning, business development along with mass data mining.

Challenges and remedies for the Bangladeshi

Industries– Compare to the earlier industrial revolutions, the fourth industrial has facilitated rapid changes in the intelligent automation, robotization, etc. Therefore, it will notably impact on the exiting as well as future job market. A research report by the World Economic Forum (WEF) stated that by 2030 globally approximate 800 million people could lose their jobs where about 5.70 million unskilled Bangladeshi labour / people are under threat since one machine / automated process alone is capable to beat more than 10 people / workers. So, lack of technological skills is a great threat for the Bangladeshi industries and manufacturing concerns at the same time by adoption of technology-focused employment opportunities would create a skilled workforce and hence relevant corporate compliance issues could able to take place to establish good governance along with adoption of a safer artificial intelligence. Now, it has to be noted that key business areas of Bangladesh those patronize the national economy for the last three decades are – a) knitwear and oven (readymade garment), b) plastics products, c) leather and goods made by leather, d) light engineering, e) export of human resource, f) pharmaceuticals, g) ship building, h) tourism, i) ceramics, j) agro-processing, k) IT and ITES related outsourcing, l) personal effects through small and medium-sized enterprises (SMEs) and so on where readymade garment is the second export earning sector as well as global competitor. In order to adopt the cyber physical systems and outline probable corporate compliances with privacy issues first of all the strong demographic dividend along with densely population of Bangladesh is required to provide both technical and vocational training on a variety of skill development programs. Though major portion of this huge population is young, government and the private sector in together have golden opportunity create numerous platforms. On the other hand, international global online portals namely, Alibaba, Amazon, etc. can promote and patronize the e-commerce in the small and medium-sized enterprises (SMEs) to overcome the upcoming challenges in Bangladesh.

Last of all, in order to manage probable disruption along with seize the opportunities over the next couple of years the Chief Executives of top branded Companies shall have key concentrate on – a) consumer oriented, b) innovation of newly customized products, c) invest in the disruptive technologies, d) involvement with external entities, e) visible transformation into different outlook and so on. On the other hand, the Chief Executives specially, the Compliance Officers should have concentrated on the regulations in attachment with probable tax compliances. Moreover, the MNCs have to pay attention on their global operations as well as restructure their supply chain management in order to minimize the reputational risks. Conversely, legal and compliance have to focus on value-added services through peer network communities that might be ensure knowledge sharing with best practices though the technological advancement would be a threat for the legal and compliance profession. Additionally, the upcoming super technology has strong potentiality to be empowered by an augmented intelligence hence the legal and compliance profession will in need to grasp sharper insights then before. In conclusion, though machines are tactical but the human being is strategic to guide the processes speed up as well as make onerous tasks easier by machines.

Sources –1. The power of trust and values in the Fourth Industrial

Revolution; available at: < https://www.weforum.org/agenda/2018/10/power-trust -and-values-fourth-industrial-revolution/ > [Accessed on October 18, 2018] 2. Risk & Regulation in the Fourth Industrial Revolution; available at: < https://www.ghy.com/trade-compliance/risk-regulation -in-the-fourth-industrial-revolution/ > [Accessed on

October 18, 2018]

» About the Author

Student of ICSB