Recently there has been a lot of talking and writing about “The Fourth Industrial Revolution”. This term was made popular by Klaus Schwab - Founder and Executive Chairman of the World Economic Forum. He said “We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before.” Others have made similar observations and no matter what you call it, something dramatic is happening at an increasingly rapid pace.
It is commonly accepted that the “First Industrial Revolution” occurred in the middle of the 19th century and was driven by the use of “water and steam power to mechanize production”. The “Second Industrial Revolution” starting in the early 20th century was driven by “electric power to create mass production”. Most consider the “Third Industrial Revolution” to be started in the middle of the 20th century driven by the use of “electronics and information technology to automate production”. Now, claims Schwab, “a Fourth Industrial Revolution is building on the … digital revolution … characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.” He claims that this revolution is distinct because of its “… velocity, scope, and systems impact. The speed of current breakthroughs has no historical precedent. When compared with previous industrial revolutions, the Fourth is evolving at an exponential rather than a linear pace. Moreover, it is disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance. … emerging technology breakthroughs in fields such as artificial intelligence/AI, robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing.”
These changes are starting to have an impact on our society. Leading edge consumer products and services have already emerged, which will be followed by significant improvements in the efficiency and productivity of industry – driven by “… innovation based on combinations of technologies”. But radical changes can cause disruptions – including:
· Labor – people will be displaced by automation and AI. It’s already happening. Some speculate that there will be a significant loss of jobs, with the middle-class being especially hit hard. “This will give rise to a job market increasingly segregated into ‘low-skill/low-pay’ and ‘high-skill/high-pay’ segments, which in turn will lead to an increase in social tensions.” In the past industrial revolutions there was also significant labor displacement, but new jobs were created to replace them. Let’s hope this is true this time as well.
· Business – will face competitive challenges from innovation. “… many industries are seeing the introduction of new technologies that create entirely new ways of serving existing needs and significantly disrupt existing industry value chains.” And new, agile companies that embrace and exploit the new technologies will be able to implement innovation faster than their established competitors.
· Government – will need to change as new technologies empower their constituents and challenge their efficiency and relevance. “… legislators and regulators are being challenged to an unprecedented degree and for the most part are proving unable to cope … governments and regulatory agencies will need to collaborate closely with business and civil society.” Some of the challenges faced by the public sector include data security, surveillance systems, cyber warfare, and autonomous weapons.
· People – “… will change not only what we do but also who we are.” Our privacy is already at risk. And the constant connection facilitated by smart phones is already affecting how a whole generation communicates interpersonally.
So, what are the implications of all of these coming changes? “There has never been a time of greater promise, or one of greater potential peril.” For those in and about to enter the workforce, education, training and learning new skills will be key to survival. Business and government leaders need to think and act strategically considering all of these disruptive forces. As machines approach the capabilities of humans, we need to exploit them to our benefit and empower people to innovate.
All Rights Reserved © 2019 Henry P. Mitchell