The Fourth Industrial Revolution

Impact And How to Respond

Overview

The world is witnessing a wave of technological renaissance with the capacity of altering the course of humanity forever. Technology has been at the fore of development through the First to Third Industrial Revolution and will take a dimension never conceived as we approach the Fourth. We must consider ourselves privileged to be in this age which offers more opportunities and renewed hope.

With the rapid spring up of economies that are mostly dependent on technology, it is imperative for developing economies to pay more attention to the value and growth a technology driven economy offers. When deployed in critical sectors of the economy, it can boost productivity and output levels, thereby increasing aggregate supply which will cause price to fall and wages to go up. Thus, there is a fierce competition among Western countries in creating new inventions and making ground breaking discoveries. The goal is to use technology to solve complex problems and make life much easier and stress free.

Countries that fail to move with the current wave of technological advances will find themselves at the bottom of the ocean – lost and forgotten. As the world is gradually moving away from fossil fuels to renewable energy, oil rich nations are staring at a major problem. This is a call for developing countries to see beyond crude and start investing in other areas especially science and technology. For example, Haiti used to be the most prosperous nation in the world but by the time of the First Industrial Revolution, it lost its position when it failed to adopt trending technology at the time. 

Think about some of the inventions made in the last century and how for instance, many thought the possibility of moving people from one point to another by air could only be achieved through ''witchcraft'' and not science. While the invention of television and computers caused a massive change in the dissemination of information, the subsequent invention of mobile phones with innovations on them have completely revolutionize the way we send and receive information. Today, mobile phones have become very smart tools performing several functions like recording, translating languages, taking quality pictures, watch videos, play games, do research and so on. Their processing power, storage capacity and appealing interface make for a responsive and pleasant experience.

Yet, with all of these achievements made with phones and other electronic gadgets, we have only scratched the surface of what they can do. The coming of superior technologies like Artificial Intelligence (AI), Robotics, Internet of Things (IOT),  Nanotechnology, Biotechnology, Material Science, Energy Storage and Quantum Computing will launch a greater dimension and far reaching possibilities never envisaged. It will cause a paradigm shift in the way we relate with one another and possibly lay the groundwork for the entry of the Fifth Industrial Revolution (if this is not happening already.

Historical Perspective

The First Industrial Revolution

This is also known as the Industrial Revolution and occurred in Europe and the United States between the years 1760 and 1820, though the exact time is still contended by various economic scholars. It involved the transition from manual to mechanical manufacturing processes. Machines were adopted in place of the traditional means of using the hands in production. The period also witnessed the development of new chemical manufacturing and iron production processes, the use of steam and water powered engines, production of machine tools and the growth of a mechanised factory system.

The Industrial Revolution started in Britain thus making them the world's leading commercial nation. With its impact, they were able to control global trade using their vast empire to boost trade operations. This newly found means of production had a major impact on the daily lives of people. As such, the average income and population grew at an unprecedented rate, though many economists allude this to be due to the improved standard of living.

With rapid growth experienced in the British economy, other countries quickly embraced the revolution and improved on existing technologies to suit their system and cultural orientation.

 

The Second Industrial Revolution

The Second Industrial Revolution,  also known as the Technological Revolution was a period of rapid industrialization and standardization of industrial processes. It took place between 1870 and 1914 – before the start of World War II. Advancements in manufacturing and production led to the creation of systems such as railroad networks, water supply, telegraph and sewage systems.

Gradual expansion of railway and telegraph lines enabled the large movement of people and ideas from one point to another thus starting the process of globalisation. The period also witnessed the introduction of new technologies like electricity, combustion engine, petroleum, and telephones. The invention of  electricity played a pivotal role in manufacturing and production as it ensured that machines were continually in operation, thus improving efficiency and output, while also being cheaper than other forms of energy.

The Second Industrial Revolution saw the greatest impact on economic growth in the short period it existed. Living standards increased significantly while the price of goods fell drastically. This was majorly possible due to increase in productivity. However, this period also witnessed high unemployment and uncertainties as industries and factories deployed more machines over human skills.

 

The Third Industrial Revolution

This is also called the Digital Revolution and saw the introduction of personal computers, mainframe computers, semiconductors, and the internet. Starting from the 1950s, the world gradually moved from analogue operations to a more computerized approach.  These new technologies disrupted commerce and industry with the biggest impact being in communications, computing and energy. With the new technologies came a possibility of reaching better heights in biotechnology, space exploration and energy. Efforts were made by countries to invest in research and development in the field of science and technology.  

The rapid growth made in digital infrastructure has brought more economic players into the scene, with the market becoming more productive and competitive, reducing the price of goods and services and creating a new economic model known as the sharing economy. The advent of social media and the internet has impacted the lives of many people as they can now build online based companies and reach out to customers on social media platforms like Facebook, Twitter, and Instagram.

A key component of the Third Industrial Revolution has been the move to smart technologies like nanotechnology, 3D printing and intelligent systems. Thus, there’s been a significant change in the way and manner business operations are carried out from payments and transactions done with a mobile device to booking a ride. We have witnessed (or currently witnessing) a world where limits are constantly changing and it behooves us to keep pushing.

 

The Fourth Industrial Revolution

This is sometimes called Industry 4.0. It is the automation of traditional manufacturing and industrial processes, using smart technologies. In this period, we are witnessing large scale machine to machine communication (M2M) fused with internet of things (IOT)  for enhanced automation, improved communication and performance. Emphasis are made on the production of smart machines that can analyze and understand certain issues without human involvement.

Industry 4.0 will see the rise of advanced computing and automation, which means that people and businesses will be able to achieve more with little effort. For example, artificial intelligence is on the steady rise and can be seen in self-driving cars to software that can translate or assist you in doing literally anything!

Digital fabrication technologies are also interacting with the biological sciences in proffering smart solutions and discovering new drugs. In commerce and industry, block chain is gaining momentum in creating transparency, enhanced security, improved traceability and speed of transactions.

 

Prospect and impact

One of the main effects of the Fourth Industrial Revolution is increased productivity and reduction in the price of goods and services. Businesses and entrepreneurs can now achieve more with smart machines doing things faster and at a lower cost. Smart machines are becoming even smarter by the day, with manufacturers making machines anticipate human next line of action and reasoning.

The effect of this is an increase in income level and better standard of living for people all over the world. However, there are some moral, ethical or critical issues that come with these innovation which in some cases leave us with more questions than answers. Let us look at some of the implications below:

  • Increased Expectation

Everybody expects quick solutions when we are faced with a puzzle. We seek answers on any channel or resource available, either via tweets, blog posts, search engines, calling others, or chatting with them. Before now, we were contented with the traditional options available but with the introduction of superior technology, we have become accustomed to the new way and have sidelined the old means.

The truth is technology has grown better and keeps improving with respect to meeting our expectations. A few years ago, platforms like Facebook, Twitter, Google, Airbnb, Spotify, YouTube and others did not exist and customers were left with little choice in reaching people and getting services they wanted. These platforms afford wider reach, multiple options on a particular thing, quick response and a faster way of getting information and finding opportunities.

Also, we should take note of the fact that a lot of young people grew up in the digital age and are used to these innovations. They make up a sizeable amount of the work force and constantly seek improvements in the efficiency and design of products.

  • Increased Data Consumption

Countries will have to do more to ensure fast connectivity for everyone. In recent times, we have witnessed the growth of connection speed from 1G to the now much talked about 5G, which is designed to connect everyone and everything together, from devices to machines. Every organization and business require internet connection in one way or the other for day to day operations. Schools and students use the internet for study purposes while others use the internet for daily transactions, reviews and for entertainment.

With more than a billion people sharing content online from images to videos and tweets or comments, the demand for data is on the rise. We can think of data as fuel for machines because internet enabled services very much rely on data today. In fact, it is now an essential commodity that is tied to the price of other products.

Data acts like food for artificial intelligence, which is a driving innovation across a growing number of businesses and services. This means that the more data you have the better the predictions become. Machine learning algorithms are built to analyze billions of transactions and figures to make businesses smarter. They help businesses anticipate trends in consumer needs, personalize promotions for individual customers and optimize pricing.

  • Transportation

These days you don’t need to own a car to have a comfortable ride. With car-sharing platforms, people can book for cars online with their mobile devices, hence offering seamless experience from accessibility to convenient payment options. This model of transportation will reduce the number of cars on the road, thus reducing the amount of CO (Carbon II Oxide) as people would prefer to use private cars only when necessary. Also people can move conveniently using Uber, Bolt or Lyft when there’s just one car available to a household.  

Advances in artificial intelligence, internet of things, and clean energy can improve safety for drivers and passengers as well as pedestrians. This means with fewer cars on the road, movement from one place to another will become faster and cheaper and safer with people gaining employment as drivers.

  • Retail

In retail, personalization is fast becoming the norm. Sales, marketing and services are intertwined and necessary for the  growth of any business. Online service agents can perform daily transactions and make smart recommendations to customers. Machine learning algorithms analyze billions of patterns to direct customer service calls to the most appropriate agent.

Currently, artificial intelligence is improving and becoming more and more accurate that soon enough, e-commerce giants might be able to tell what customers need before they realize they need it.

  • Improved Finance

Many financial institutions use artificial intelligence to enhance transparency and to detect fraud in their system. This is made possible through insight from machine learning designed to manage client relationships. Artificial intelligence can also help financial advisors predict the stocks that are most reliable in the market and the action that should follow. It can also help create personalized customer experience based on customers financial goals and life events.

Banks are undergoing a massive change with digital apps making it easy and seamless for customers to carry out transactions without visiting the banking premises. Branches are being shut with more ATM points opened for smart banking. While this may be a move in the right direction, it will reduce the workforce and send many in uncertainty.

  • Agriculture

New technologies powered by artificial intelligence can measure crop population and detect weed and pest while robotic sprayers can precisely apply herbicides . Bioengineered plants are leading to greater and healthy crop yield, with new medicines such as antimalarial and antifungal drugs produced from genetically modified plants.

Modern technologies like drones, robots, satellite imagery, temperature and motion sensors and GPS technology are improving agricultural production and making it cost effective, smart, sustainable and profitable.

Farmers can also get updated with their smart phones. For example, Crop Monitoring is a platform that employs satellite monitoring to assist farmers in decision-making processes and to update them on things like weather analytics, chlorophyll level in plants, field performance comparison, etc.

  • Health

The past few years has seen a rise in applications that help people reach out to doctors and order for drugs. Precision medicine helps doctors analyse a patient’s medical history. The information in addition to demographic data of people with similar conditions help doctors create treatments and preventive therapies.

Also, new technologies like trackers, wearables and sensors will give people the ability to monitor themselves and take control of their health. For example Fitbit Ionic can help monitor sleep and workout while Polar H10 can help fine-tune workout routines so as to find the exercises best suited to achieve a particular purpose.

More recently, Google’s DeepMind created an AI for breast cancer analysis. The algorithm outperformed all the predictions done by radiologists on preselected data sets to identify breast cancer with an average of 11.5%.

 

Impact on Individuals and Societies

The innovations that come with the Fourth Industrial Revolution are in no doubt highly beneficial to businesses and individuals, connecting like minds together and making the world a global market that offers boundless opportunities. However, as with the previous Industrial Revolutions (that preceded this), there will always be negative impacts.

This industrial revolution could create inequality, especially in its ability to disrupt labour markets. With automation gradually replacing labour across the economy, the overall displacement by machines may further increase the gap between returns to capital and returns to labour.

Also, it is possible that the displacement of workers could lead to an increase in safe and rewarding jobs. Some of the impacts of The Fourth Industrial Revolution on individuals and society include:

  • Positive Changes

Information is very important to finding opportunities and staying updated with the latest trend and news. Access to information can improve the lives of billions of people. With more powerful computing devices and networks, mobile devices and digital services, information can be made easily accessible to everyone.

Social media applications like Facebook, Twitter, and Instagram have given a voice to many people and a means to network and communicate with people from all parts of the world. These innovations are bringing people together and creating business communities open to everyone.

For example, well-known retail stores are going online and are rapidly gaining ground with the population. Customers can now shop for wears and other accessories with their phones. Several entrepreneurs are also building market place websites that offer a variety of products and services and helping to kick-start economies of low income communications while also providing jobs to many.

Also, social media has become an effective tool in raising concerns about issues affecting a country. For example, social vices like rape, domestic violence, kidnapping, and drug abuse are most times picked upon and brought to the notice of the relevant authorities through Facebook and Twitter. Civil groups and human activists are also using these platform to call the government to order whenever it enacts questionable laws.

With increased digitization in automobile safety, we will record lower road accidents and the corresponding insurance cost that comes with it. There will also be reduction in carbon emissions, with countries working to phase out fossil fuel to cleaner forms of energy. Digital technology can also reduce the number of hours workers spend on work that can be automated, affording workers the time to focus on more complex issues and increased productivity.

  • Negative Changes

Social media has changed the narrative of sending and receiving information as well as marketing and branding. It has sparked a wave of creatively among young people while also serving a platform for personal promotion. However, it has a negative side that can cause harm to people and businesses.

A lot of people use social media to promote false news with an attempt to mislead and deceive people while some are using the platform to spread hate about a government, people, culture, race, ethnicity, and religion. It is also being used as a medium to recruit and lure people into criminal organizations and secret societies.

We are also witnessing an unprecedented increase in cyber bullying,  internet fraud, hacking, and security breach, with criminal minded people pulling every trick and format to dupe unsuspecting people and businesses of their money. If used by criminals, AI, robotics, and programming tools can be used to destroy systems and create deadly weapons that can hart people on a large scale.

  • Changes in Employment

Technology driven by artificial intelligence is unleashing a whole new level of productivity, thereby improving the lives of people in a lot of ways. It is inevitable that jobs will be grossly impacted as artificial intelligence automates a variety of tasks. However, just like the internet threatened jobs several years ago, AI will transform many jobs and give rise to new kinds of jobs.

Workers can improve themselves on being creative in solving tasks that machine automation aren’t designed to do. Also, a major challenge will be the fact that many workers with less education and fewer skills will be affected by the revolution.

Government and businesses will need a trained and skillful workforce to drive their development agenda, thus, leaving workers to either Improve themselves or do something else. The need to train and re-train  workers will be very important for organizations and government agencies moving forward.

  • Changes in Equality

Many people are hoping that the new technologies and innovations will lead to a better future for both men and women. Advances in technology is fast improving and leading to extraordinary levels of connectivity and internet penetration. However, this does not necessarily translate to a more diverse and inclusive society.

According to the World Economic Forum Global Risk Report “the Fourth Industrial Revolution has the potential to raise income and improve the quality of life for all people”. Unfortunately, this is not the reality today with only a small amount of people benefiting from the impact of the revolution. In fact, many people around the world have not benefited from the previous revolutions.

Recent data by World Bank Group indicates that in 2015, 10% of the world’s population or 734 million people lived on less than $1.90 a day and with the entry of COVID-19, economic fortunes of many countries have dwindled due to economic uncertainties in the international market.

Also, there are at least 600 million people who own smallholder farms but are without access to mechanized tools, thus, it is safe to say they have not even experienced the First Industrial Revolution yet (in the 21st century). Around one-third (2.4 billion) of the world’s population do not have access to clean water and safe sanitation while one-sixth (1.2biilion) have no electricity – a system developed during the Second Industrial Revolution. Lastly, as we applaud the fact that more than 3 billion people have access to the internet, we must also remember that over 4 billion people are currently left out of the Third Industrial Revolution.

  • Changes in Privacy

Everyone limits what they make known to the public but we live in an era where businesses, mobile devices and internet applications request for our personal information to create a smart, intelligent and personalized experience. For example, Facebook and Instagram track what you do and like and based on that gives you content and ads that will be relevant to you.

Also, smartphones can track your location, you can also share your location with other applications that require your location like Uber and to Google Map  that recommend places to shop, eat, and relax. Online stores can analyze your purchase history and recommend products and deals that will appeal to you.

In the nearest future, people will be able to walk into a store and find that their name, credit rating and past purchases are all known by the store keeper. 

 

Impact on Work and Labour

The Fourth Industrial Revolution is largely driven by four technological developments.

  1. High speed mobile internet
  2. AI and automation
  3. Data analysis
  4. Cloud technology.

 

Of these four, AI and automation are expected to have the most significant in the business world. Recently, a study by McKinsey Global Institute shows that roughly one-fifth of global workforce will be affected by the entry of AI and automation, with the most significant impact to be witnessed in developed nations. By 2020, 50% of companies believe automation will decrease the number of full-time staff and by 2030, robots will replace over 800 million workers across the world.

While this may not be cheering news, it could represent a change within the workforce as affected workers could improve themselves and take up more new and beneficial roles.

  • Remote Working

New technologies will enable companies employ experts and freelance contractors. The recent pandemic has forced companies to adopt remote working to reduce the number of people in a workspace, thus reducing the risk of spreading the virus.

This approach will give workers enough time to complete their tasks , flexibility and a better work-life balance. It also allows companies to expand without building physical structures, this increasing worker’s loyalty and commitment, scale quicker and reach new levels of productivity.

  • Jobs Most Likely to be Impacted

The Economist predicts that 50% of jobs might be lost to automation. Some industries are more likely to be automated than others especially the manufacturing and agricultural sectors.

In the nearest future, we will see more robots taking up active roles thereby displacing humans in the workplace. Apart from manufacturing and agricultural sectors, automation will also affect shipping, delivery and service industry.

  • Jobs Least Likely to be Impacted

Though robots may do things quickly, accurately, and efficiently, they cannot do everything. For example, most robots lack social and cognitive skills. They can work as chatbot and answer questions and complaints but lack the ability to show empathy to support or care for customers, or patients.

As a result, roles involving sensitivity, care or complex reasoning are unlikely to be very much affected by automation.

 

Role of Government

The Fourth Industrial Revolution presents governments with both good and bad news. The good news is that governments will be able to foster a flexible, knowledge and skill based economy, thus promoting trade while improving efficiency and effectiveness of health and social systems. It also offers an advantage in defense and weaponry for countries that know how to best use technologies.

On the downside, governments could find themselves powerless against multinational corporations that will be deploying new innovations to boost productivity. Regulating their activities may become difficult to achieve. Also, individuals or groups of individuals with a particular interest can leverage on the power of new technologies to seek greater autonomy which will challenge and undermine the government and its institutions.

For example, block chain technology is fostering new approaches to banking and personal finance. People can choose to do business with one another in unofficial currencies like Bitcoin rather than the legal tender issued by the central banks. If government agencies and institutions do not embrace new technologies, they will both fail in their quest to generate the capacity needed to keep the economy in check as well as the efficiency needed in sustaining public services, thus damaging the reputation of government.

When the impacts of technology becomes too rapid and causes massive disruptions, an unprepared government will have no response in dealing with it, this can lead to unemployment and inequality which in turn can lead to social unrest. For example, the loss of jobs caused by robots in the 1980s could resurface with a much bigger jobs displacement by artificial intelligence in the next few years. A lot of workers especially those in the middle class will most likely be affected and when they find that a system in which they have invested so much in, turns against them, they will also turn against the government and this can lead to massive social troubles.

 

How Governments Should Respond

Government must be on top of their game to ensure the impact of the revolution brings more prosperity than hardship for people and in order to make that happen, it must do these four things:

  1. Governments must have a strong understanding of future occurrences, knowing the risks and opportunities that are involved, as well as its implication on the nation, and the workings of the government. Governments must be smart and must always keep an eye on current trend and future innovations along with possible disruptions.

 

  1. Governments must put the necessary infrastructure in place to benefit from the advantages of technological innovations and a strong mechanism to deal with cyber security – be it criminal or politically motivated. They must be an enabler of positive change and refrain from managing the market.

 

  1. They must develop a deep understanding of the potential impact of change on the role of government, their relationship with businesses as well as that between citizens and businesses. Governments must upgrade themselves and develop a mechanism of generating revenue through tax from multinationals. They must be a digital government equipped for a digital age.

 

  1. They must maintain a strong cohesion in the eventuality of potential major disruptions, such as huge displacement of workers and inequality in wealth distribution. Government must be able to properly manage the situation by protecting employees, maintaining flexible taxation and regulation policies in order to enable technologies thrive.

 

Cue for Developing Countries

Developing countries must focus on the basic needs of people. First and foremost, governments must initiate a robust infrastructural and developmental plan that will create good hospitals, durable roads, stable electricity, security, affordable education and social programs for the disadvantaged population. This will serve as the foundation for businesses to grow and a means to attract foreign investments.

Secondly it must invest in creating jobs, and to achieve this, governments must improve the ease of doing business index. They must also support large scale enterprises by putting policies that will support their rapid growth and expansion.

Thirdly, they must invest in education and other forms of vocational training. Governments must seek to actively reduce the level of illiteracy among citizens. Of utmost significance is the investment in science and technology. 

Lastly, they must lay the foundation for a knowledge based economy and one way to actually do this is by investing in internet access. With this, people will begin to explore their creative side and even come up with internet based solutions to social and business issues.

 

Shaping the Future

In the nearest future, advances in computing system, artificial intelligence, robotics, and material science will accelerate the shift towards more environmental friendly products. Digital fabrication techniques, including 3D printing can bring manufacturing closer to customers as well as make spare parts easily available and cheaper to get.

Breakthrough in biotechnology can allow for replacement bones and transplantable organs to be grown from 3D printed patient’s stem cells. As more discoveries emerge about the human brain, we can look towards neural impacts and brain-medicine interface that can help against cognitive diseases.

New energy technologies can also create low-cost, sufficient and sustainable sources of power and power storage – to replace fossil fuels created by innovations of the First Industrial Revolution.

Robots will be instrumental in performing domestic tasks, assisting caregivers and even creating dynamic solutions themselves.

In the end, for the impact of the Fourth Industrial Revolution to be fully harnessed, governments must rise and put its citizens first in all its programs and policies. They must step out of the traditional and linear method of thinking and doing things.

Governments must be strategic while showing foresight in anticipating any form of economic or social disruption, in order to either key into available advantages or mitigate agaisnt potential losses. 

 

 By Uwemedimoh Sampson

 

 

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