The Fourth Industrial Revolution – Broad Implications
We’re overloaded by so much, often unsettling, news of social, economic and political change that it’s hard to separate out what is important from sensationalistic click bait. In a previous Insights post, I wrote about the future of manufacturing. But that’s just one component of a sweeping fourth industrial revolution that will change everything, including the very fabric of our sense of self, even our physical natures.
The Scope And Depth Of The Fourth Industrial Revolution
The Fourth Industrial Revolution is emerging out of the Third (Digital) Industrial Revolution that began in the mid-20th century. At its heart is the rapid integration of breakthrough digital, physical and biological technologies. Related changes are developing at an exponential rate with unprecedented breadth and depth–transforming not only production but private enterprise, government and our personal lives, as well.
According To A Recent WSJ Article–
- “Engineers, designers, and architects are combining computational design, additive manufacturing, materials engineering, and synthetic biology to pioneer a symbiosis between microorganisms, our bodies, the products we consume, and even the buildings we inhabit.”
The Broad Implications–
- Easier, faster access to the Internet has already greatly enhanced the efficiency of our ordering products and services. We can now do virtually anything remotely.
- Look for a continued decrease in transportation and communication costs, more effective supply chains and reduced trade costs, all of which should help to open new markets and help accelerate economic growth.
- But there’s a catch–the trend towards jobs requiring high levels of talent will increase, while Artificial Intelligence will eliminate many mid-level positions Providers of intellectual and physical property, spearheaded by those with high levels of talent, will be the big winners. Low paying jobs will also increase, deepening the divide between the rich and everyone else.
- This ‘winner takes all’ bottom line is already creating profound middle-class dissatisfaction. We can see this in the growing appeal of political candidates and parties that used to be considered too extreme/marginal to be taken seriously. This is happening throughout the Developed World.
- Finally, more than 30% of the world’s population now uses the Internet, creating unprecedented opportunity to connect with others, to learn and share information. Ideally, this would lead to broader social understanding and tolerance. Unfortunately, the dark side of this development, outlined in previous OWDT posts, is clearly evident in the spread of calculated disinformation. The most dramatic example of this is the role of social media in catalyzing the rise of ISIS and other terrorist networks. As with all revolutions, it’s often the rise in unrealistic expectations and, in this case–fantastical beliefs– that fuel conflict, even more than what’s actually happening.
Next, I’ll specify how the Fourth Industrial Revolution will impact business, government, and our everyday lives.
The impact on business
There was a somber mood among industrial and political leaders at the World Economic Forum in Davos, Switzerland last week. Those in attendance were worried about the sharp drop in oil prices, China’s economic slowdown, the volatile, chaotic Middle East, the growing political instability in Europe and the coming US elections. All of these developments, including an eroding Developed World middle class, are connected to the emerging Fourth Industrial Revolution.
Will ‘the center’ hold in the next few years or will things unravel? That depends on whether there’s another global recession, whether the Trans Pacific Partnership is approved, whether moderate European and American leaders are voted out of office, etc.
On the brighter side, the percentage of the global population living in absolute poverty has decreased dramatically in recent years. Along with that, Fourth Industrial Revolution tech breakthroughs continue to offer hope of an improving quality of life for billions.
The Impact On Business
- Global CEOs and senior executives have been pushed off balance by hard-to-predict business disruptions that are emerging with the Fourth Industrial Revolution. This has been especially the case for established corporations, increasingly vulnerable to new, more agile and innovative competitors.
- These new, innovative early adopters are providing faster delivery, better quality and lower prices for products and services.
- This new dynamic is making it easier for talented, innovative entrepreneurs to create wealth. Their new generation platform-based businesses have expanded into a wide range of specialized services ranging from TaskRabbit-delivered chores, to travel/transportation, to shopping.
- On the demand side, businesses have had to recalibrate their marketing platforms to take greater advantage of mobile device dominance.
- Most businesses must now also meet the challenges related to the rapid integration of people, resources and big data in the new ‘sharing economy.’ This has resulted in an accelerated transformation away from hierarchical to flatter, more streamlined and collaborative organizational structures.
- New digital technologies are creating more dependable, resilient products and services. At the same time, big data and analytics are transforming both delivery and maintenance.
Next, I’ll discuss how these changes will affect government and everyday life.
The impact on government and people
The private and public sectors need to adapt quickly to the sweeping Fourth Industrial Revolution transformation. Unfortunately, ideology/belief systems and policies most always lag behind real world developments. Delayed reform is inevitable.
The Impact On Government
We’re experiencing a growing polarization between those who believe we need much less government contrasted with those who want stronger government to counter the growing global influence of the super rich. Above all, government needs to be more responsive to the needs and expectations of citizens. In other words, it needs to develop qualities it’s seldom been recognized for–agility, policy customization and rapid response to challenges. To achieve that transformation, governments need to learn to collaborate better with business and civil society.
There are two counterposing developments–First, growing tech-driven power, including new surveillance systems, giving government the potential to control their populations. For example, the Russian and Chinese governments are among those moving to create a segmented internet, where their citizens see only what they want them to see. Second, new social media platforms are making it easier for citizens to voice their opinions and circumvent government authorities, thereby threatening to undermine government authority.
The Impact On People
The Fourth Industrial Revolution will transform what it means to be human. Issues of privacy, consumption patterns, careers, personal relationships and even ownership are in rapid flux.
Will related changes undermine our ability to cooperate with and feel compassion towards others? The evidence thus far supports the conclusion that a (largely false) sense of Internet anonymity is one of the factors resulting in our having less empathy towards others. There’s also concerning research evidence that our attention span is diminishing with the constant barrage of Internet stimuli.
Other Changes To Personal Life
- On the positive side, advances in biotech promise to increase lifespan, improve health, and cognition. Yet these changes will increasingly expand moral and ethical boundaries, leading to new debates over issues like genetic enhancement, AI physical implantation and inequalities in health care delivery.
- According to a recent release, developments in the fields of AI, robotics, genetics, 3D printing and nanotechnology will result in the loss of as many as 7.1 million jobs. That estimate needs to be reduced, however, by 2.1 million because of jobs emerging with the Fourth Industrial Revolution.
- Where jobs can’t be outsourced to machines, prospects are much better. This accounts for the rapid rise in jobs related to senior care, education, coaching and in-person (as opposed to Internet) translation. Higher paid job opportunities in IT, communication, media and entertainment will also increase.
- Industries projected to experience initial job loss include financial, industry and health care. The latter is a turnabout from recent trends.
“A growing polarization between those who believe we need much less government contrasted with those who want stronger government to counter the growing global influence of the super rich.”