Governance of Technologies in Industrie 4.0 and Society 5.0

By Azhar Zia-ur-Rehman

This book is the sequel to the author’s previous book titled “Technology Governance – Concepts and Practices” (ISBN 978-1-5246-7815-9) – which was a pioneering book on the subject. Technology governance has during these years become even more important due to the introduction of new technologies and the proliferation of artificial intelligence. This book takes the concept further in the context of the fourth industrial revolution (Industrie 4.0) and Society 5.0. The emerging domain of governance of ethics has been introduced considering concerns in the use of artificial intelligence. New methodologies have been introduced for transformation, technology governance, data governance, and process documentation. These are all based on international standards and are enhancements to accepted methodologies.
This book is expected to take the domain of technology governance further towards maturity.

Let me express my appreciation for your accomplishment in writing a book on the Fourth Industrial Revolution and Society 5.0

I am confident that the book will contribute to the contemporary debate on how to succeed and sustain in the era of a technological revolution that is fundamentally altering the way we exist, operate, and interact with each other, and is a manifestation of the dedication on your part.

Dr. Arif Alvi
President of Pakistan

• Language: English
• Publisher: AuthorHouse UK
• Release date: May 29, 2024
• ISBN: 9798823086783

Azhar Zia-ur-Rehman

Azhar Zia-ur-Rehman is a seasoned technology professional with a very rich and wide background in a variety of industries and domains. His expertise spans the domains of IT, governance, compliance, risk management, security management, enterprise transformation, building information modelling (BIM) and 3D printing. He has worked on systems from the lowest level to large business systems for conglomerates. As a consultant, therefore, he can very comfortably mix and match these domains for the benefit of his customers and provide them with a solution that few other consultants can. Azhar Zia-ur-Rehman has been based in the GCC for more than 20 years working for prestigious companies and as a consultant. This book is the result of more than 36 years of experience in a variety of industries including telecommunications, petroleum, manufacturing, real estate, construction, heavy engineering, health, legal, facilities management, retail, government and utilities. Most of the ideas presented in this book are original and new and can form the basis of a very new domain of ‘technology governance’ – a domain that will soon become vital due to the increasing use of technology in enterprises.

Book preview

© 2024 Azhar Zia-ur-Rehman. All rights reserved.

No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means without the written permission of the author.

Published by AuthorHouse  05/29/2024

ISBN: 979-8-8230-8679-0 (sc)

ISBN: 979-8-8230-8680-6 (hc)

ISBN: 979-8-8230-8678-3 (e)

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Because of the dynamic nature of the Internet, any web addresses or links contained in this book may have changed since publication and may no longer be valid. The views expressed in this work are solely those of the author and do not necessarily reflect the views of the publisher, and the publisher hereby disclaims any responsibility for them.

Contents

Foreword

Preface

Chapter 1The Industrial & Social Revolutions

Chapter 2What is Technology?

Chapter 3What is Corporate Governance?

Chapter 4What is Technology Governance

Chapter 5What is Information Governance?

Chapter 6What is Data Governance?

Chapter 7Governance of Ethics

Chapter 8PENTRIUM©

Chapter 9Digital Transformation & Beyond

Chapter 10The FOURAMEWORK©

Chapter 11The DIGI4MATION© Methodology

Chapter 12Agile Governance

Chapter 13Quality in the Fourth Industrial Revolution & Society 5.0

Chapter 14Vertical & Horizontal Integration

Chapter 15Governance of Information Security & Cybersecurity

Chapter 16Governance of Information & Technology

Chapter 17Principles for the Governance of Technologies

Chapter 18Technology Governance Process Reference Model

Chapter 19GRC, ESG & Society 5.0

Chapter 20Implementing AGILE Technology Governance

Chapter 21Assessing Technology Governance

Chapter 22Assessing Digital Readiness

Conclusion

Foreword

I t is with great pleasure that I am writing this Foreword to the book Governance of Technologies in Industrie 4.0 and Society 5.0 by Mr. Azhar Zia-ur-Rehman. I understand that this is the sequel to his previous book titled Technology Governance – Concepts and Practices that he had got published in 2017. This original book was, I believe, a pioneering book on the subject of technology governance and had formalised this domain for the first time. While the concepts presented in that book are still valid and unchallenged, there arose the need for a sequel because of the changing requirements and the maturity of the fourth industrial revolution and the onset of Society 5.0. This sequel very nicely fulfils this need.

I find this book timely and necessary. Timely, because it addresses the very current challenges faced worldwide because of the fourth industrial revolution and Society 5.0. Necessary, because many of the issues discussed in this book are faced by every organisation, be it in the public domain or the private. Necessary, also because the solutions provided herein are practical and understandably, tested.

I am pleased to see the all-encompassing definition of industry here. It sets the tone for the book and makes the concepts and solutions presented here relevant for all types of industries. Similarly, the definition of technology governance makes one realize that the host of technologies employed in an organization can be useful to the full extent only if they are governed and the synergy between them identified and utilised.

I find the concept of Pentrium very useful in understanding, at a very high level, what is actually needed to be done to bring about successful transformation in an organization. The definitions of digitization, digitalization, and digital transformation will certain help remove the confusion about these terms and justify the gap that the author has very successfully filled by inventing the concept and methodology of DigI4mation.

The DigI4mation methodology is a very original and needed concept and will certainly help organizations move beyond digital transformation towards transformation of the complete ecosystem.

Organizations are often at a loss to understand what to transform. This issue is solved by the concept of FOURAMEWORK invented by the author. I am sure that this framework will help organizations determine gaps in their systems and plan their transformation accordingly.

The introduction of Agile Governance is important being a rather new concept. This is true also about vertical integration and horizontal integration without which the transformation of the entire ecosystem is not possible.

The chapter on governance of information security and Cybersecurity is of special interest to me. I find the ideas expressed therein very relevant, practical, and useful.

The complete set of chapters on different domains of governance covers corporate governance, technology governance, information governance, data governance, governance of ethics, and governance of information and Cybersecurity. In my view, such a comprehensive coverage of governance is difficult to see elsewhere.

The author has given a logical set of principles for technology governance and related process reference model. This the most unique offering of this book.

The last two chapters lay down the methodologies for assessing the maturity of technology governance and of digital readiness of an organization. Organizations should adopt these to assess their respective readiness in these areas.

I find this book very relevant in today’s world. It can be very useful for us in the UAE as we strive to bring the latest technologies to this country and utilize them fully under the able leaderships of our President and our Prime Minister.

I would like to commend Mr. Azhar Zia-ur-Rehman for this immense effort. I am sure that this work will be useful in forwarding our efforts in the UAE.

H.E. Dr. Mohamed Al Kuwaiti

Head of Cybersecurity

Government of the United Arab Emirates

May 17, 2024

Preface

T he title of this book comprises two often misunderstood and misinterpreted terms – ‘technologies’ and ‘governance’. ‘Technology’ is misunderstood mostly to mean what is called ‘information technology’ – computers, smart phones, etc. Instead, ‘technologies’ refers to a collection of knowledge, techniques, methods, or processes that may be needed to accomplish something. ‘Governance’ is often misunderstood to mean only the control that people at the top of an organization exercise over their organization. This book does not deal with the governance of information technology only. On the contrary, it builds up on the revolutionary concepts on technology governance that were introduced by me in my previous book ¹. These concepts have since become critical for success in the industrial revolutions. The ‘governance of technologies’ is critical in the modern times because every organization today depends on a set of technologies not only for its success, but for its very survival. Optimum benefit can be derived from this set of technologies only if they are governed synergistically through proper governance structures following defined processes. This is what this book lays down.

This book is meant for those who want to transform organizations beyond ‘digital transformation’ to compete and succeed in the fourth industrial revolution and Society 5.0. They will find herein not only a proven methodology for this transformation, but also a framework to define what to transform to. The methodology is called DIGI4MATION (digital transformation for the 4th industrial revolution), and the framework is called FOURAMEWORK (process framework for the fourth industrial revolution).

This book comes at the right time because the World Economic Forum recognized Failure of Technology Governance as a major risk in its Reports in 2021² and again in 2022³. They defined this risk as lack of globally accepted frameworks, institutions or regulations for the use of critical digital networks and technology, as a result of different states or groups of states adopting incompatible digital infrastructure, protocols and/or standards. This book aims at laying down frameworks that will mitigate this risk.

The foundations for the concepts presented herein were laid early in my career. I was working in a company that was manufacturing sophisticated telecommunications equipment and was using state of the art technologies of that time. These technologies included at least three sets – firstly, those related to the conception, design, and development of telecommunications equipment, secondly those dealing with the design, development and use of manufacturing and testing equipment for these telecommunications’ equipment, and, thirdly, technologies that helped manage the financial, material, and human resources of the company. These three sets of technologies were managed without much synergy between them and no formal coordination except at the highest level. The fourth set of technologies that should have been there, but was not, relates to information. The term information technology had not become common yet – data processing in glass houses was the norm. With time, personal computers started becoming common and were used all over the company – design and development, production planning and control, manufacturing, testing, etc. Although there were PCs all over, there was no central control to make their use efficient and coordinated. I always wondered why all technologies in an organization are not managed in a synergetic and coordinated manner. That was the world of the third industrial revolution.

As I gained familiarity with more industries and got involved in the use of computers in industries as diverse as telecommunications, electronics, heavy engineering, manufacturing, health, yarn, textiles, retail, real estate, petroleum, construction, banking, government, and municipal administration, I witnessed the same situation everywhere. Then I saw some method appear in the madness of the telecommunications industry. The Telemanagement Forum⁴ was formed to view technology from a higher perspective and define best practices for its use. No other industry I know of, has been able to bring a similar method into its respective madness.

I was lucky to have got interested and involved in corporate governance, a domain still dominated by lawyers and accounting professionals. I saw corporate governance from the IT governance aspect and noticed the narrow view that governing bodies have on technology. While they understand the legal and the financial aspects, they rely heavily on the technology managers on technology aspects. The other issue in corporate governance is weak oversight. This is due to reliance on chartered accountants in the internal audit departments. Chartered accountants are good at counting beans and indicating how many of them are missing, but not trained in auditing the use of technology. As a result, I witnessed technology decisions in many companies that served more to enrich the curriculum vitae of technology personnel than the business of the company. Other technology decisions were taken under influence of fads started by multinationals to boost their sales. Most of the technology decisions were taken in silos of technology domains, resulting in duplicated investments and mutually contradicting projects.

Digital transformation also started as a fad and became the way to go in the first decade of the new century. The second decade of the century saw emerging technologies become employable and affordable. This brought about new services that were not possible earlier, most mentionable of them being car-hailing services like Uber and Careem. Such services became possible because they used a set of technologies synergistically and governed them consciously. For rendering such services, mere digital transformation was proving to be inadequate. Another degree of transformation was needed – ‘digi4mation’ – transformation to meet the needs of the fourth industrial revolution and beyond.

The rush for digital transformation intensified towards the end of the second decade of the new century. I have been lucky to be involved in digital transformation exercises for a variety of organizations, including governments. Driven by the need for accomplishing these assignments to the best of my abilities, I designed, developed, practiced, and proved my own methodology for transformation beyond the typical. I coined the term digi4mation for the final stage of transformation and the term DIGI4MATION for the entire methodology of transformation for success in the fourth industrial revolution. This methodology makes sure that organizations satisfy the five essentials of the fourth industrial revolution. I have named these essentials as I4R PENTRIUM.

Organizations needing to transform must decide what they want to transform to. I felt the need for a framework that can help organizations define their to-be state. Taking guidance from Frameworx⁵, I defined such a framework and named it FOURAMEWORK – the framework for the fourth industrial revolution and beyond.

Governance of technologies is a new vertical in the domain of governance. A body of knowledge is required for it. I have laid the foundations of this body of knowledge in the form of my previous book and this one by defining some basic concepts, definitions, terms, methodologies, and frameworks. In doing so, I have tried to remain as close as possible to the concepts, definitions and terms already recognized by the International Standards Organization and other similar bodies.

Another new vertical in governance is governance of ethics. This has arisen due to the extensive use, and misuse, of technologies. The issue of ethics in the use of technologies has intensified due to the recent advancements in technologies like artificial intelligence, robotics, and biotechnology. There is a chapter introducing this new vertical in governance.

This book is based on more than four decades⁶ of my experience in about twenty countries. I have written this book in the hope that it will be useful to organizations wishing to be successful through the fourth industrial revolution and the corresponding social revolution and beyond. I hope also that it will be only a matter of time that the governance of technologies will become a recognized and vehemently practiced aspect of governance.

I am extremely thankful to His Excellency Dr. Mohamed Al Kuwaiti, Head of Cybersecurity, Government of the UAE, for kindly writing the Foreword for this book. Only a person of his vision can appreciate the necessity of the governance of technologies in these times.

I hope readers find this book useful and write back to me with suggestions for improvement.

I dedicate this work to my parents and my teachers who instilled the belief into me that he dieth not who giveth life to learning, and to my especially talented daughter, Khadija, who happens to be my most valuable asset.

Azhar Zia-ur-Rehman

May 17, 2024.

Abu Dhabi,

United Arab Emirates.

[e-mail]

1

The Industrial & Social Revolutions

M uch has been written on the industrial revolutions and why the one we are experiencing now in the second and third decades of the 21 st century is the fourth -- 4IR or Industrie 4.0. Despite this, sadly, the concept remains misunderstood.

Dr. Klaus Schwab writes in the very first paragraph in the Introduction to his book⁷, We are at the beginning of a revolution that is fundamentally changing the way we live, work, and relate to one another. In its scale, scope, and complexity, what I consider to be the fourth industrial revolution is unlike anything humankind has experienced before. The question is that if the revolution is fundamentally changing the way we live, work, …, why is it an industrial revolution and not a social revolution or an economic revolution?

The answer, in my view, lies in the definition of the concept of industry herein.

Dr. Schwab goes on to say, We have yet to grasp fully the speed and breadth of this new revolution. Consider the unlimited possibilities of having billions of people connected by mobile devices, giving rise to unprecedented processing power, storage capabilities and knowledge access. Or think about the staggering confluence of emerging technology breakthroughs, covering wide-ranging fields such as artificial intelligence (AI), robotics, the internet of things (IoT), autonomous vehicles, 3D printing, nanotechnology, biotechnology, materials science, energy storage and quantum computing, to name a few. Many of these innovations are in their infancy, but they are already reaching an inflection point in their development as they build on and amplify each other in a fusion of technologies across the physical, digital, and biological worlds⁸.

This seems to imply that 4IR is about technology, or rather the use of technology. I define 4IR as follows.

Industrious employment of technology means a use-case of technology that is characterized by a steady, earnest, and energetic effort. Synergetic employment of technology means the inter-related and inter-dependent use of multiple technologies to create a product or offer a service that could not have been possible without this inter-relationship or this inter-dependence. This industrious and synergetic employment of technology had not been the norm before 4IR.

Dr. Schwab goes on to say⁹, The changes are so profound that, from the perspective of human history, there has never been a time of greater promise or potential peril. My concern, however, is that decision-makers are too often caught in traditional, linear (and non-disruptive) thinking or too absorbed by immediate concerns to think strategically about the forces of disruption and innovation shaping our future.

The challenge of 4IR is, therefore twofold – to make the best of the great promise and to keep safe from the potential peril. My effort in this book is therefore also twofold. First, to help enterprises identify the potential peril that looms ahead for them and to prepare to keep safe from it. Second, to identify the unique great promise that lies hidden for them and how to realize it. I have devised and proved my own methodology and framework to help organizations in this regard.

Dr. Schwab raises two primary concerns about factors that may limit the potential of the fourth industrial revolution to be effectively and cohesively realized. The first is that the requisite institutional framework to govern the diffusion of innovation and mitigate the disruption is inadequate at best and, at worst, absent altogether. The second is that the world lacks a consistent, positive and common narrative that outlines the opportunities and challenges of the fourth industrial revolution. I have tried herein to provide initial answers to both concerns.

The Secretary-General’s Note¹⁰ on Strategic Orientations for the 2023-24 Biennium issued after the Meeting of the OECD Council at Ministerial Level Paris, 9-10 June 2022, sets out Strategic Orientations on priorities for the Organisation over the coming biennium. It lists the third priority as seizing the opportunities of the digital transformation while better managing some of the associated risks, challenges and disruptions. This note stresses the need for broad reflection on models of digital and technology governance to ensure they are fit-for-purpose.

While it has become fashionable to count industrial revolutions, different people have come up with the concept of a fifth industrial revolution but there is no agreement yet on its direction. Some link it to robotics inside human bodies¹¹, while others consider it just a refinement of the fourth¹². Yet another expectation is that the fifth industrial revolution sees humans working alongside advanced technology and AI-powered robots to enhance workplace processes. This is coupled with a more human-centric focus as well as increased resilience and an improved focus on sustainability. Another related concept is that of ESG -- Environmental, Social and Governance -- a framework to define business practices and performance on various sustainability and ethical issues.

Industry 5.0 is a forethoughtful concept on the future of industry towards a human-centric, sustainable, and resilient manufacturing system, which provides a flourishing development vision of industry. The Industry 5.0 paradigm promotes systems’ agility and resiliency with the utilization of flexible and adaptable technologies. Furthermore, attempts to lead action on sustainability and respects planetary boundaries and promotes talents, diversity, and empowerment¹³.

Better developed that the concept of the fifth industrial revolution is that of Society 5.0, a Japanese concept. This has been forwarded officially by the Japanese Government and their plans are based on it.

Society 5.0 is a vision of a future society guided by scientific and technological innovation, aiming to create a human-centred, super-smart, and lean society, which was initiated by the Japanese government in January 2016. The concept of Society 5.0 was proposed to balance economic advancement with the resolution of social problems (e.g. aged tendency, low birth rates and lack of competitiveness) in Japan. The goal of Society 5.0 is a human-centric super-smart society to ensure all citizens can access high-quality lives full of comfort and vitality by providing necessary goods and services for individual people at the necessary level when needed through merging between cyberspace and physical space with 5G, Big data, artificial intelligence, etc¹⁴.

Society 5.0 represents Japan’s primary and nation-wide effort to combine social and ecological imperatives with the wealth and employment generating capabilities of the innovation economy. The initiative does not abandon the profit motive, for the engagement of Japanese business is integral to Society 5.0. For several decades, the Government of Japan understood and supported, albeit sporadically, the social and environmental benefits of emerging technologies. But the capacity of Japanese innovations to address the primary challenges of an ageing population, energy shortages, environmental degradation, the changing nature of work, and many others remained substantially unrealized. Society 5.0 seeks to refocus the innovation effort in Japan by placing societal needs at the centre of an integrated approach to scientific and technological transformation¹⁵.

Society 1.0 has been described¹⁶ to be the Hunting Society – the hunter-gatherer stage of human development in which co-existence with nature was the norm.

Society 2.0 was the Agrarian Society that saw the development of irrigation techniques and the firm establishment of settlements.

Society 3.0 was the Industrial Society that saw the invention and use of the steam engine and mass production. This corresponds with the first industrial revolution.

Society 4.0 is the Information Society in which computers began to be used and the formal distribution of information started.

Society 5.0 aims at balancing economic development with the resolution of social problems utilizing all the technologies discovered so far. This is a society that is sustainable and resilient against threats and unpredictable and uncertain situations, that ensures the safety and security of the people, and that individual to realize diverse well-being.¹⁷

Individual companies including Panasonic, NEC, Toyota, Fujitsu and Hitachi have also begun integrating Society 5.0 into their corporate strategies¹⁸.

This balancing of economic development utilizing the available technologies is possible only through a proper governance of the technologies being employed.

The industrial and the social revolutions therefore raise questions that relate to technology and technology governance. What are these? This is answered in the following chapters.

2

What is Technology?

T he term technology brings immediately to mind what is today called information technology – computers, robots, automation, smart phones, etc. However, this term is said to have been derived from Greek τέχνη , techne, (art, skill, cunning of hand) and – λογία ( -logia ).

Recent scholarship has shown that the present-day meanings of the term technology are relatively recent. In nineteenth-century English, technology referred principally to a field of study concerned with the practical arts; it did not refer to industrial processes or artefacts, except in anomalous usage. In German-speaking regions, a new discourse emerged around die Technik in the second half of the nineteenth century. This German term referred to the practical arts as a whole, especially those associated with engineers and modern industry. When Thorstein Veblen encountered this term after 1900 in German social theory, he incorporated its meanings into technology, thereby transforming the English word into a sophisticated concept for analysing industrial societies. Most scholars who drew on Veblen’s concept missed its subtleties, however, among them the historian Charles A. Beard. In the late 1920s, Beard embraced a deterministic understanding of technology that linked it firmly to the idea of progress¹⁹.

An interesting definition of the term is given in The Free Dictionary²⁰ – The body of knowledge available to a society that is of use in fashioning implements, practicing manual arts and skills, and extracting or collecting materials.

The Business Dictionary defines the term as "the purposeful application of information in the design, production, and utilization of goods and services, and in the organization of human activities"²¹.

For the purposes of this book, we will adopt the following definition of technology.

This definition of technology covers a wide range of knowledge and practice and therefore it is important to further categorize technology. The following is a model that divides technology into three streams and can thus be called the Streams Model of Technology. The purpose of this model is to categorize technology into three distinct domains, each depending on a separate body of knowledge and managed by a separate set of experts. The streams depend and rely on each other and need to be managed and governed at a higher-level ensuring synergies and tight coupling.

These three streams of technology can be visualized simply by observing the small corner grocery store. The basic knowledge required in running the business of the grocery store is that of procuring goods that are to be carried in the store, and of making sales. The business cannot be carried out without this set of knowledge. This is the core technology in the grocery business. It is the industrial technology of the grocery store business. As the grocery store grows and develops into a chain of departmental stores, this set of knowledge also grows.

However, to efficiently procure goods and sell them, the grocery store needs processes, procedures, and rules. This set of processes, procedures and rules is specific to the industrial technology of the grocery store and changes and grows with the size and complexity of the business. These processes, procedures and rules may be generic but are customized and formalized for use in every different type of industry. We term them as the business technology for that specific industrial technology.

As these processes, procedures and rules grow more complex, they generate, and use increasing volumes of data and need to process it to create information and knowledge, and extract wisdom therefrom, to run the enterprise better. The enterprise ends up with no choice but to employ information technology.

As