If the third industrial revolution was about using electronics and information technology to change economic systems and the way we live, the fourth will be characterized by disruptions stemming from a merger of the digital and physical worlds.

Much of the focus this week at the World Economic Forum’s Annual Meeting in Davos has been on how the breakthroughs we are seeing today in artificial intelligence, robotics, the Internet of Things, biotechnology and other fields are disrupting industry, and ushering changes in systems of production, management and governance. But the changes and disruptions we are seeing are about so much more than economic systems and industry. AI and robotics are transforming the way we live.

Consider our homes. The home has developed from pre-industrial buildings that provided shelter and insulation, to industrial-era buildings that added water and waste disposal along with energy systems, to more recently adding simple sensors and networking during the electronic era with the third industrial revolution.

What we are seeing now with the emergence of the fourth industrial revolution is the development of cognitive architecture, which enables our living spaces to be tailored for personal and family preferences. This is set to have a profound effect on our quality of life.

The home will become a natural, intuitive, extension of you. Rather than the occupant adapting to the home, we’ve entered an exciting new phase where the home works for those who live inside it.

Development of AI, robotics and other advanced technologies for applications within the living space has been underway for some time, but are gaining increased attention. Facebook founder Mark Zuckerberg, for instance, recently highlighted the potential of AI within the home and has set himself the challenge of creating a personal, voice-activated, intelligent home control and monitoring system. Meanwhile, companies such as Nest are creating connected products that recognize homeowners’ preferences and adjust settings like temperature automatically or via an app.

In the same way that primary energy use in the home shifted from lighting to more complex devices and appliances, Internet traffic is following a similar pattern. Professor Klaus Schwab’s report on the Fourth Industrial Revolution predicts that the tipping point will be when over 50% of internet traffic delivered to homes is for appliances and devices as opposed to entertainment and communication, and that we can expect this tipping point to have occurred by 2025.

The social benefits stand to be immense. At LIXIL, a Japan headquartered building and housing products and materials company, we are very close to the issues surrounding Japan’s rapidly aging society. Better connectivity in the home and caregiving technologies are some of the most effective ways to enable aging in place and maintain quality of life.

Sensors can already detect movement throughout the home and body temperature, but the introduction of AI and machine learning will make it possible to assess with increasing accuracy when patterns of activity may be abnormal, allowing remote care providers or family to be alerted. Toilets, for example, will be able to monitor the body’s health, providing an early warning on potential medical issues and when a trip to the doctor may be necessary.

In similar ways, increased connectivity and the use of sensors will provide enhanced security for those with young children. Parents who are out at work would have far greater peace of mind being able to know when their children safely returned home, while exterior sensors on the house also make it possible to make the home more secure. The list of potential applications is endless.

The accrual of incremental improvements in the home also has the potential to bring enormous benefits to global issues such as water conservation and climate change. The U.S. Energy Information Administration reported that in 41% of total U.S. energy consumption in 2014 was consumed in residential and commercial buildings.

Connected thermostats coupled with sensors on windows and housing exteriors, for example, will make it possible to place automatic controls over temperature to help save energy, while more efficient toilets and plumbing systems are already enabling significant savings in water use.

There are of course significant challenges. Increased connectivity in today’s world is, not surprisingly, bringing with it increased concerns around privacy and vulnerability to cyber crimes. Do we really want our homes, where we spend our private time, to be connected and “always on”? In addition, how do we ensure that new solutions are scalable and can benefit all including those in emerging markets, instead of just the privileged few?

For the “smart” connected home to realize its potential, these are all critical issues that need to be addressed. At LIXIL, we stand at a unique intersection of the movement to integrate the physical and digital worlds. We aim to bring together people, ideas and technologies in unexpected ways to enhance the lives of people and society. Over the coming years, developments we are now seeing with the fourth industrial revolution will dramatically impact how these enhancements to our quality of life and society occur, including in the home.

Author: Yoshiaki Fujimori is the President & CEO of the LIXIL Group Corporation.