The First Industrial Revolution used water and steam power to mechanize production. The Second used electric power to create mass production. The Third used electronics and information technology to automate production. Now a Fourth Industrial Revolution is building on the Third, the digital revolution that has been occurring since the middle of the last century. It is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.
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. We do not yet know just how it will unfold, but one thing is clear: the response to it must be integrated and comprehensive, involving all stakeholders of the global polity, from the public and private sectors to academia and civil society.
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.
Economists Erik Brynjolfsson and Andrew McAfee have pointed out, the revolution could yield greater inequality, particularly in its potential to disrupt labor markets. As automation substitutes for labor across the entire economy, the net displacement of workers by machines might exacerbate the gap between returns to capital and returns to labor. On the other hand, it is also possible that the displacement of workers by technology will, in aggregate, result in a net increase in safe and rewarding jobs.
We cannot foresee at this point which scenario is likely to emerge, and history suggests that the outcome is likely to be some combination of the two. However, I am convinced of one thing—that in the future, talent, more than capital, will represent the critical factor of production. 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. (WeForum.org)
“Some of the companies…rely on technologies that are so old and so dated… they should have been moving aggressively to these new technologies like cloud computing, mobility, social networks and even artificial intelligence,” says Salesforce.com (CRM) CEO Marc Benioff in an interview with Yahoo News.
Quoting the CEO of a CRM (Customer Relationship Management) company, might seem out of place when addressing the trade industry, but that’s the thing, it is not. We have been relaying on old and dated technologies for so long, that only the big-companies in the industry have the foresight and resources to invest in them. As a result they’re the only ones that are pushing on to bring in new generations on-to the trade industry, and preparing themselves to make the most of the 4th Industrial Revolution.
As business models are disrupted, the employment landscape is being profoundly impacted. The result will be significant job creation – and job displacement – in addition to both heightened labour productivity, and widening gaps between the skills that employers need and those that potential employees can offer.
During previous industrial revolutions, it required decades to adapt by building the training systems and labour market institutions necessary to develop new skill sets on a large scale. Given the faster pace and broader scale of disruption brought about by the Fourth Industrial Revolution, an interlude like that may not be an option this time around.
The World Economic Forum’s 2016 Future of Jobs report posits that mismatches may emerge not just between the current supply of, and demand for, skills but also between contemporary skills and those that will be required in the future. Closing that gap will require a solid understanding of the existing skills base in a particular country or industry, and of how disruptive change will dictate new skills requirements. In this rapidly evolving labour market, preparing for the future is increasingly critical for seizing opportunities, and mitigating undesirable outcomes. (WeForum.org)