Fourth Industrial Revolution: Concerns, Opportunities and way forward
By: Sumalatha K C
This article is about 4th Industrial Revolution, a technological revolution, that can alter the human lives. The apprehensions, opportunities and way forward of this new evolution are analysed below.
Fourth Industrial Revolution dawns a new era, that builds and extends the impact of digitization in new and unanticipated ways which has the potential to alter the lives of the humans – the way we live, work and connect. 4th Industrial Revolution can be described as the advent of “Cyber-physical system”[i], characterized by the fusion of technologies that blurs the line between the physical, digital and biological spheres[ii] and represents entirely new ways in which technologies become embedded within societies and human lives.
The first industrial revolution used steam power to mechanize production. The second industrial revolution created mass production through electric power and the third industrial revolution used electronics & information technology to automate production. The fourth industrial revolution is building on the third. It has the potential to raise global income levels & improve the quality of the life for people around the world, but as any emergence of new technologies has winners and losers, 4th Industrial Revolution has its apprehensions. This article provides analyses of the potential concerns, the opportunities and the way forward for the fourth industrial revolution.
CONCERNS OF FOURTH INDUSTRIAL REVOLUTION:
The issue of Inequality:
Klaus Schwab rightly said, “the benefits of technology for all of us who consume are incontrovertible”. But are these benefits equally spread out or contribute to broad-based economic growth is a matter of contention. As the economist, Erik Brynjolfsson & Andrew McAfee point out( The Second Machine Age), globally-connected digital platforms tend to grant outsized rewards to a small number of star products and services. Digitization and reliance on digital markets is an important reason for inequality. According to Global Wealth Report 2015[iii], the richest 1% of the population now owns half of all household wealth. Inequality can also be fuelled by the pervasiveness of digital technologies and the dynamics of information sharing typified by social media. For instance, in India, the urban-rural digital divide is 23%: 4%[iv] and during the pandemic lockdown, only 12.5% of country’s 35 crore students had access to devices like smartphone, laptops. The Fourth industrial revolution tends to favour “winners take all economy” and this will exacerbate the issue of inequality.
Disruption to labour markets:
The fourth industrial revolution is marked by emerging technologies like artificial intelligence, the internet of things (IoT), robotics and automation. This may provide a substitute for labour across the entire economy. This net displacement of workers by machines could result in a gap between returns to capital and returns in labour. The digitization of the economy creates a demand for high skilled workers giving rise to job markets that are increasingly segregated into “high-skill/ high-pay” and “low- skill/ low-pay” segment.
The impact on the business/ Industries:
Technologies that underpin the 4th industrial revolution blur the physical and digital boundaries which impact the existing business structure. On the supply and demand sides, many industries are seeing the introduction of new technologies that create new ways of serving needs and new patterns of consumer behaviour based on mobile networks & data, forcing companies to adopt new ways to deliver products & services. The increasing flexibility of capital in the form of robots and other advanced automation manufacturing systems may erode the comparative advantage of many emerging and developing countries and the possibility of “re-shoring,” impacting the emerging economies.
According to a UN, out of 7 billion people in the world, 6 billion[v] have access to mobile phones. This possibility of connection through mobile devices coupled with emerging technology breakthrough offers unlimited opportunities. Consumers tend to gain a lot from any industrial revolution and this holds for the 4th industrial revolution as well. Many economic activities like organizing transport, booking restaurant, buying groceries, making payments, watching movies can now be done instantly through the internet of things (IoT). This has led to boom effect in other industries like Software
(as many Apps are developed), ICT & e-commerce promoting innovation& entrepreneurship culture.
Fourth industrial revolution technologies such as blockchain, artificial intelligence (AI), IoT have helped to facilitate the tracking of critical metals& minerals from mines to consumers, de-construction & re-use, thus, aiding “Circular economy[vi]”. This systemic approach can help manage raw materials and waste effectively and can contribute to sustainable development. Further technologies like quantum computing have practical applications for addressing climate change and the future of food and energy. AI has also been used in the Covid-19 disease management and several applications of AI are raising hopes in the fight against the pandemic[vii].
The Way Forward:
4th Industrial revolution has the potential to uplift humankind. To make the fruits of revolution equitable and sustainable, there is a necessity for restructuring the economy, and the social & political system. Therefore, learning new skills & re-skilling of personnel is crucial. A conscious effort must also be devised to bring all the stakeholders together to ensure collective responsibility and to make the path of the fourth industrial revolution inclusive. If this is ensured then the words of Klaus Schwab[viii], where he said that the new technologies are tools made by people for people and the fourth industrial revolution can lift humanity into a new collective and moral consciousness based on a shared sense of destiny”, can be realized.
Any technology evolution arises out of the need to address human necessities. Endeavouring to make the path of the technology revolution inclusive, responsible and empowering will reduce the pessimistic impact of inequality, insecurity and apprehensions. The key goal here is to maximize the wellbeing of human beings and collectively the planet’s wellbeing.
Sumalatha K C is a MA(DLB) student at JSIA.
[i] Nicholas Davis, “What is the fourth industrial revolution?” 19 Jan 2016, weforum.org [ii] Klaus Schwab, “The Fourth Industrial Revolution: what it means, how to respond,” 14 Jan 2016, weforum.org [iii] Credit-suisse.com [iv] Indiatimes.com, 21 July 2020 [v] news.un.org, 21 March 2013 [vi] Leanne Kemp, “Here’s how circular economy could change the world by 2030” 29 Oct 2019, weforum.org [vii] ncbi.nlm.nih.gov [viii]Klaus Schwab, “The Fourth Industrial revolution”, Jan 2017, World economic forum.