Tag Archives: 4th industrial revolution

Fourth Industrial Revolution by Klaus Schwab

A fourth industrial revolution began at the turn of this century building on the digital revolution, according to Klaus Schwab, German engineer and founder of the World Economic Forum. [i] The transition to agriculture from hunting and gathering occurred around 10,000 years ago, the first industrial revolution evolved from about 1760 to 1840, the second was the mass production that began in the late 19th century, and the third was the information age enabled by computers in the 1960s. The new revolution depends on smart technology: mobile devices that can connect billions of people, AI (artificial intelligence, self-driving vehicles, robotics, drones and virtual assistances like Apple’s Siri), 3D printing that can manufacture a new liver or a gun, quantum computing, new materials, and IoT (the internet of things such as chips in household appliances). Nanotechnology and biotechnology will change medical practices, permit gene engineering, implanting memories in brains and designer babies. As futurist Alvin Toffler predicted, each revolution occurs faster than the previous one. The iPhone was only launched in 2007 but there were about two billion smart phones in use by the end of 2015 (Sub Saharan Africa is the fastest growing area), and Airbnb, Uber and Alibaba (China’s online sales service) are even newer. Buyers can get virtual books and music online and arrange car rides without needing to own a car. Technological tipping points such as most people connected to the Internet are listed in Schwab’s book.[ii]

Schwab is concerned about traditional leaders’ low level of preparedness for the rapid changes the fourth revolution is bringing, changes in entire systems, and the increased inequality and social unrest that can result from failure to collaborate. Talent is now the basis for success, requiring flexible networks rather than hierarchies. He thinks there’s never been a time of greater promise or potential danger due to the following problems. With growing economic inequality, half of all assets are controlled by the richest 1% and the lower half owns less than 1% of wealth, according to Credit Suisse’s Global Wealth Report 2015. The authors of The Spirit Level: Why Greater Equality Makes Societies Stronger show that more equal societies have higher well-being, less violence and stress, and better health.[iii] Nearly 1.3 people still don’t have electricity, half the world’s population doesn’t have mobile phones and 60% don’t have Internet access.[iv] New industries are creating fewer jobs than in the previous technological revolutions and with “on demand” economies more employers are using the “human cloud” of temporary workers called the precariat. Millennials set the tone for these consumer trends in a “now world” of peer sharing and user-created content, where 87% of young people in the US report their smart phone is always with them.[v] Progress towards gender equity is slow and possible stalling. The global population is ageing, requiring changes in retirement practices and other issues. Schwab observed that North American companies remain the most innovative, along with the EU, but China and other countries are catching up.

Governments will need to adapt to the fourth revolution by using more digital sharing of information in e-governance, adapt to loose networks replacing old hierarchies, and the growing importance of globally connected cities and regions as “hubs of innovation.” (Among the most innovative cities are New York, London, Helsinki, Barcelona and Amsterdam.[vi]) Citizens already have to be vigilant about government electronic surveillance, cyber warfare, and the ability of terrorist groups like ISIS to recruit fighters on social media from more than 100 countries.

The fourth revolution leads to what Schwab believes is a disruptive “transformation of humankind” in a global civilization. Some of the changes in identity are people are willing to be mobile as in moving for work, families may be separated by these moves in a “trans-national family network,” and people are more comfortable with “multiple identities” that come from exposure to other cultures. A “me-centered” society creates “new forms of belonging and community.”[vii] Spending so much time being interrupted by multiple electronic messages can impact ability to concentrate and relax. More polarization can result between those digitally connected and those not connected. Schwab’s book is a plea for leaders to adapt to the fourth revolution so that too many people don’t get left behind.

[i] Klaus Schwab. The Fourth Industrial Revolution. World Economic Forum, Geneva, 2016.

[ii] Ibid., p. 26.

[iii] Richard Wilkinson and Kate Pickett. The Spirit Level Why Greater Equality Makes Societies Stronger. Bloombury Press, 2011.

[iv] Klaus, p. 77.

[v] Ibid, p. 54.

[vi] Ibid., p. 78.

[vii] Ibid., p. 94.