Technological and economic stages are theoretical concepts used to describe and analyze the evolution of society and economy at different stages of development. At the same time, different researchers and experts may interpret them in different ways.
The fourth industrial revolution (4IR or Industry 4.0) is related to information technology, automation, digitalization and globalization. One of its key elements is the creation of proprietary software solutions, i.e. specialized digital products designed for specific tasks and companies. These solutions often become an important part of the IT infrastructure, but they are poorly scalable without additional modifications.
The Fifth Industrial Revolution (5IR) is now at an earlier stage of conceptualization and development than 4IR. Its core principles include increased personalization of products and services. 5IR is a movement towards more adaptable, flexible and personalized economic activity with a focus on personalization, consulting and service-oriented models. A key aspect of the fifth economic mode is the use of data for decision-making, which is virtually impossible without the use of open data and open tools (Fig. 2.1-12).
Fig. 2.1-12 The fourth pattern focuses on solutions, while the fifth pattern focuses on personalization and data.
Creating an application for companies in the construction industry for use in ten or one hundred organizations does not guarantee its successful scaling to other companies, regions or countries without significant modifications and enhancements. The likelihood of successfully scaling such solutions remains low, as each organization has unique processes, requirements and conditions that may require personalized adaptations.
It is important to understand that already today successful integration of technological solutions implies a deeply personalized approach to each process, project and company. This means that even after developing a universal framework, tool or program, it will require detailed adaptation and customization to meet the unique requirements and conditions of each specific company and project.
According to the PwC report “Decoding the Fifth Industrial Revolution“ (ZCS, “Decoding the Fifth Industrial Revolution,”), about 50% of senior executives in various industries this year rely on the integration of advanced technologies and human expertise. This approach allows them to quickly adapt to changes in product design or customer requirements, creating personalized production.
Each process requires the development of a unique function or application, which, given the size of the global construction industry and the diversity of projects, leads to the existence of a huge number of business cases, representing each time a unique Pipeline logic (Fig. 2.1-13). Each such case has its own peculiarities and requires a customized approach. We will look in more detail at the variety of possible solutions to the same analytical problem in the context of different approaches in the chapter devoted to machine learning and the parsing of the Titanic dataset (Fig. 9.2-9).
Pipeline in the context of digital processes is a sequence of activities, processes and tools that enable an automated or structured flow of data and work through the different phases of the project lifecycle.
Fig. 2.1-13 The individuality and variability of business cases makes attempts to create scalable closed platforms and tools impossible.
Our lives have already changed in many ways under the influence of digital transformation, and today we can talk about the advent of a new stage in the economic development of the construction industry. In this “new economy”, competition will be organized according to different rules: the one who is able to efficiently turn public knowledge and open data into demanded products and services gains a key advantage in the conditions of the fifth industrial revolution.
As noted by economist Kate Maskus in the book “Private Rights and Public Problems: The Global Intellectual Property Economy in the 21st Century” 2012(M. K, Private Rights and Public Problems: The Global Economics of, Peterson Inst. for Intern. Economics,, 2012), “we live in a global knowledge economy, and the future belongs to those who know how to turn scientific discoveries into commodities”.
The transition to the fifth economic mode implies a shift in focus from closed IT solutions to open standards and platforms. Companies will begin to move away from traditional software products in favor of service-oriented models, where data, rather than proprietary technologies, will become the main asset.
Harvard Business School 2024 study (F. N. a. Y. Z. Harvard Business School: Manuel Hoffmann, “The Value of Open Source Software,” 24 Jan. 2024)shows the huge economic value of open source software (Open Source Software, OSS). According to the study, OSS is present in 96% of all software codes, and some commercial software consists of 99.9% OSS components. Without OSS, companies would spend 3.5 times more on software.
Building company ecosystems, following global trends, will gradually shift to the fifth economic paradigm, where data-centric analytics and consulting services will become a higher priority than isolated closed solutions with rigidly defined use cases.
The digitalization era will change the balance of power in the industry: instead of relying on vendor solutions, companies will base their competitiveness on their ability to leverage data. As a result, the construction industry will move from legacy rigid systems to flexible, adaptive ecosystems where open standards and interoperable tools will be the foundation of project management. The end of the era of application vendor dominance will create a new environment where value will not be defined by possession of closed source code and specialized connectors, but by the ability to turn data into a strategic advantage.
