The Fourth Industrial Revolution: what it means, how to respond:-
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 Chronology of Industrial Revolution:-
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.
Fourth Industrial Revolution:
There are three reasons why today’s transformations represent not merely a prolongation of the Third Industrial Revolution but rather the arrival of a Fourth and distinct one: velocity, scope, and systems impact.
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.
The possibilities of billions of people connected by mobile devices, with unprecedented processing power, storage capacity, and access to knowledge, are unlimited. And these possibilities will be multiplied by emerging technology breakthroughs in fields such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing.
Already, artificial intelligence is all around us, from self-driving cars and drones to virtual assistants and software that translate or invest. Impressive progress has been made in AI in recent years, driven by exponential increases in computing power and by the availability of vast amounts of data, from software used to discover new drugs to algorithms used to predict our cultural interests
Digital fabrication technologies, meanwhile, are interacting with the biological world on a daily basis. 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.
Challenges and Opportunities:-
Like the revolutions that preceded it, the Fourth Industrial Revolution has the potential to raise global income levels and improve the quality of life for populations around the world. To date, those who have gained the most from it have been consumers able to afford and access the digital world; technology has made possible new products and services that increase the efficiency and pleasure of our personal lives. Ordering a cab, booking a flight, buying a product, making a payment, listening to music, watching a film, or playing a game—any of these can now be done remotely.
In the future, technological innovation will also lead to a supply-side miracle, with long-term gains in efficiency and productivity. Transportation and communication costs will drop, logistics and global supply chains will become more effective, and the cost of trade will diminish, all of which will open new markets and drive economic growth.
At the same time, as the 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, 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.
In addition to being a key economic concern, inequality represents the greatest societal concern associated with the Fourth Industrial Revolution. The largest beneficiaries of innovation tend to be the providers of intellectual and physical capital—the innovators, shareholders, and investors—which explains the rising gap in wealth between those dependent on capital versus labor.
Technology is therefore one of the main reasons why incomes have stagnated, or even decreased, for a majority of the population in high-income countries: the demand for highly skilled workers has increased while the demand for workers with less education and lower skills has decreased. The result is a job market with a strong demand at the high and low ends, but a hollowing out of the middle.
This helps explain why so many workers are disillusioned and fearful that their own real incomes and those of their children will continue to stagnate. It also helps explain why middle classes around the world are increasingly experiencing a pervasive sense of dissatisfaction and unfairness. A winner-takes-all economy that offers only limited access to the middle class is a recipe for democratic malaise and dereliction.
Discontent can also be fueled by the pervasiveness of digital technologies and the dynamics of information sharing typified by social media. More than 30 percent of the global population now uses social media platforms to connect, learn, and share information. In an ideal world, these interactions would provide an opportunity for cross-cultural understanding and cohesion. However, they can also create and propagate unrealistic expectations as to what constitutes success for an individual or a group, as well as offer opportunities for extreme ideas and ideologies to spread.
Acceleration of innovation and the velocity of disruptionare hard to comprehend or anticipate and that these drivers constitute a source of constant surprise, even for the best connected and most well informed. Indeed, across all industries, there is clear evidence that the technologies that underpin the Fourth Industrial Revolution are having a major impact on businesses.
On the supply side, many industries are seeing the introduction of new technologies that create entirely new ways of serving existing needs and significantly disrupt existing industry value chains. Disruption is also flowing from agile, innovative competitors who, thanks to access to global digital platforms for research, development, marketing, sales, and distribution, can oust well-established incumbents faster than ever by improving the quality, speed, or price at which value is delivered.
Major shifts on the demand side are also occurring, as growing transparency, consumer engagement, and new patterns of consumer behavior (increasingly built upon access to mobile networks and data) force companies to adapt the way they design, market, and deliver products and services.
On the whole, there are four main effects that the Fourth Industrial Revolution has on business—on customer expectations, on product enhancement, on collaborative innovation, and on organizational forms.
Overall, the inexorable shift from simple digitization (the Third Industrial Revolution) to innovation based on combinations of technologies (the Fourth Industrial Revolution) is forcing companies to reexamine the way they do business. The bottom line, however, is the same: business leaders and senior executives need to understand their changing environment, challenge the assumptions of their operating teams, and relentlessly and continuously innovate.
The Impact on Government:-
As the physical, digital, and biological worlds continue to converge, new technologies and platforms will increasingly enable citizens to engage with governments, voice their opinions, coordinate their efforts, and even circumvent the supervision of public authorities.
Simultaneously, governments will gain new technological powers to increase their control over populations, based on pervasive surveillance systems and the ability to control digital infrastructure. On the whole, however, governments will increasingly face pressure to change their current approach to public engagement and policymaking, as their central role of conducting policy diminishes owing to new sources of competition and the redistribution and decentralization of power that new technologies make possible.
Ultimately, the ability of government systems and public authorities to adapt will determine their survival. If they prove capable of embracing a world of disruptive change, subjecting their structures to the levels of transparency and efficiency that will enable them to maintain their competitive edge, they will endure. If they cannot evolve, they will face increasing trouble.
This will be particularly true in the realm of regulation. Current systems of public policy and decision-making evolved alongside the Second Industrial Revolution, when decision-makers had time to study a specific issue and develop the necessary response or appropriate regulatory framework. The whole process was designed to be linear and mechanistic, following a strict “top down” approach.
But such an approach is no longer feasible. Given the Fourth Industrial Revolution’s rapid pace of change and broad impacts, legislators and regulators are being challenged to an unprecedented degree and for the most part are proving unable to cope.
This means regulators must continuously adapt to a new, fast-changing environment, reinventing themselves so they can truly understand what it is they are regulating. To do so, governments and regulatory agencies will need to collaborate closely with business and civil society.
The Fourth Industrial Revolution will also profoundly impact the nature of national and international security, affecting both the probability and the nature of conflict.
The history of warfare and international security is the history of technological innovation, and today is no exception. Modern conflicts involving states are increasingly “hybrid” in nature, combining traditional battlefield techniques with elements previously associated with nonstate actors. The distinction between war and peace, combatant and noncombatant, and even violence and nonviolence (think cyberwarfare) is becoming uncomfortably blurry.
As this process takes place and new technologies such as autonomous or biological weapons become easier to use, individuals and small groups will increasingly join states in being capable of causing mass harm. This new vulnerability will lead to new fears. But at the same time, advances in technology will create the potential to reduce the scale or impact of violence, through the development of new modes of protection, for example, or greater precision in targeting.
The impact on People:-
The Fourth Industrial Revolution, finally, will change not only what we do but also who we are. It will affect our identity and all the issues associated with it: our sense of privacy, our notions of ownership, our consumption patterns, the time we devote to work and leisure, and how we develop our careers, cultivate our skills, meet people, and nurture relationships. It is already changing our health and leading to a “quantified” self, and sooner than we think it may lead to human augmentation. The list is endless because it is bound only by our imagination.
Inexorable integration of technology in our lives could diminish some of our quintessential human capacities, such as compassion and cooperation. Our relationship with our smartphones is a case in point. Constant connection may deprive us of one of life’s most important assets: the time to pause, reflect, and engage in meaningful conversation.
One of the greatest individual challenges posed by new information technologies is privacy. We instinctively understand why it is so essential, yet the tracking and sharing of information about us is a crucial part of the new connectivity. Debates about fundamental issues such as the impact on our inner lives of the loss of control over our data will only intensify in the years ahead. Similarly, the revolutions occurring in biotechnology and AI, which are redefining what it means to be human by pushing back the current thresholds of life span, health, cognition, and capabilities, will compel us to redefine our moral and ethical boundaries.
Shaping the Future:-
In the end, it all comes down to people and values. We need to shape a future that works for all of us by putting people first and empowering them. In its most pessimistic, dehumanized form, the Fourth Industrial Revolution may indeed have the potential to “robotize” humanity and thus to deprive us of our heart and soul. But as a complement to the best parts of human nature—creativity, empathy, stewardship—it can also lift humanity into a new collective and moral consciousness based on a shared sense of destiny. It is incumbent on us all to make sure the latter prevails.
Global Risk Report ,2016 :-
Background – Global risk report published by World Economic Forum.
Top global Risks for 2016 :-
Failure of climate change mitigation and adaptation
weapons of mass destruction
large-scale involuntary migration
severe energy price shock
The Security Outlook :-
“International security” refers to the measures taken by state or non-state actors, individually or collectively, to ensure their survival and integrity against transboundary threats.
The Seven Driving Forces of International Security:-
Technological innovation: Emerging technologies create challenges, but also opportunities to solve them.
Resources, climate management and security: Tensions are raised by growing competition over access to resources including energy, water and food.
Efficient governance: Corruption and lack of transparency or rule of law limits the progress of development and destabilizes societies.
Geo-strategic competition: Shifts in economic and political power and weakened mutual trust lead great powers to compete for influence, often creating competing spheres of influence.
Demographic shifts: Countries may struggle with bulges of youth or elderly populations, or with rapid influxes of migrants.
Social cohesion and trust: Fuelled by inequality, feelings of social exclusion, mistrust and marginalization threaten social stability.
Hybrid and asymmetric threats: More complex threats, indistinct adversaries and “black swans” are arising from a more interconnected world.
Top 10 Global Challenges:-
By 2050, the world must feed 9 billion people. Yet the demand for food will be 60% greater than it is today.
The United Nations has set ending hunger, achieving food security and improved nutrition, and promoting sustainable agriculture as the second of its 17 Sustainable Development Goals (SDGs) for the year 2030.
To achieve these objectives we will need to address a host of issues, from gender parity and ageing populations to skills development and global warming.
Agriculture sectors will have to become more productive by adopting efficient business models and forging public-private partnerships. And they need to become sustainable by reducing greenhouse gas emissions, water use and waste.
The risks if we fail? Malnutrition, hunger and even conflict.
2)Why growth should be Inclusive:-
The push for economic growth in recent decades has led to substantial increases in wealth for large numbers of people across the globe. But despite huge gains in global economic output, there is evidence that our current social, political and economic systems are exacerbating inequalities, rather than reducing them.
A growing body of research also suggests that rising income inequality is the cause of economic and social ills, ranging from low consumption to social and political unrest, and is damaging to our future economic well-being.
In order to boost growth and counter the slowdown in emerging markets, we need to step up efforts around the world to accelerate economic activity and to ensure that its benefits reach everybody in society.
3)What will the world of work look like?
The scale of the employment challenge is vast. The International Labour Organization estimates that more than 61 million jobs have been lost since the start of the global economic crisis in 2008, leaving more than 200 million people unemployed globally.
Nearly 500 million new jobs will need to be created by 2020 to provide opportunities to those currently unemployed and to the young people who are projected to join the workforce over the next few years.
At the same time, many industries are facing difficulty hiring qualified staff. One 2015 survey found that, globally, 38% of all employers are reporting difficulty filling jobs, a two-percentage point rise from 2014.
Put simply, we need jobs for the hundreds of millions of unemployed people around the world, and we need the skilled employees that businesses are struggling to find.
4)Climate change: can we turn words into action?
The Earth’s average land temperature has warmed nearly 1°C in the past 50 years as a result of human activity, global greenhouse gas emissions have grown by nearly 80% since 1970, and atmospheric concentrations of the major greenhouse gases are at their highest level in 800,000 years.
We’re already seeing and feeling the impacts of climate change with weather events such as droughts and storms becoming more frequent and intense, and changing rainfall patterns. Insurers estimate that since the 1980s weather-related economic loss events have tripled.
Policy-makers have been advised by the Intergovernmental Panel on Climate Change that there is a high risk of catastrophic climate change if warming is not limited to 2°C.
The historic agreement reached in Paris in December 2015 outlines a global commitment to keep warming to 2°C and to strive to limit global temperature rise to 1.5°C.
Under the agreement, every country will implement its own climate action plan that will be reviewed in 2018 and then every five years to ratchet up ambition levels. Wealthier countries also committed to deliver significant flows of money and technical support to help poor countries cope with curbing their greenhouse gas emissions and adapt to climate change.
The world has agreed what is to be done. Now it is time for implementation.
5)What’s the future of global finance?
The global financial crisis revealed significant weaknesses in the financial system and some of the vulnerabilities that can result from having such an interconnected global market.
Several years after the crisis, the world economy is still struggling with slow growth, unconventional monetary policy in major economies, and constrained government budgets. It is vital that we find ways of making the financial system more resilient and able to withstand shocks in the market.
The crisis also caused a significant drop in levels of public trust and confidence in financial institutions. To function efficiently, the system needs to re-establish that trust.
Providing access to credit and savings is a major challenge in the battle against global poverty – yet 2 billion people do not have access to high-quality, affordable financial services. Additionally, there are 200 million small and medium-sized enterprises worldwide that have no access to formal financial services.
The challenge is to create a resilient, accessible financial system that people trust.
6)What’s the future of the internet?
The internet is changing the way we live, work, produce and consume. With such extensive reach, digital technologies cannot help but disrupt many of our existing models of business and government.
We are entering the age of the Fourth Industrial Revolution, a technological transformation driven by a ubiquitous and mobile internet. The challenge is to manage this seismic change in a way that promotes the long-term health and stability of the internet.
Within the next decade, it is expected that more than a trillion sensors will be connected to the internet.
By 2025, 10% of people are expected to be wearing clothes connected to the internet and the first implantable mobile phone is expected to be sold.
If almost everything is connected, it will transform how we do business and help us manage resources more efficiently and sustain-ably.
But how will this affect our personal privacy, data security and our personal relationships? Today, 43% of the world’s population are connected to the internet, mostly in developed countries. How will we achieve the United Nations’ goal of connecting all the world’s inhabitants to affordable internet by 2020?
7)Will the future be gender equal?
Achieving gender equality isn’t just a moral issue – it makes economic sense. Equality between men and women in all aspects of life, from access to health and education to political power and earning potential, is fundamental to whether and how societies thrive.
Although we are getting closer to gender parity, change isn’t happening fast enough. For the past decade, the World Economic Forum been measuring the pace of change through the Global Gender Gap Report, and at current rates, it would take the world another 118 years – or until 2133 – to close the economic gap entirely.
There has been a significant increase in awareness of the importance of gender parity and much has been done by international organizations, civil society, governments and business.
However, often the work centres on single-issue awareness-raising campaigns. Existing work also frequently involves either cooperation between different public bodies or different private bodies.
More needs to be done to bridge the gap and facilitate cooperation between the public and private sectors.
8)What’s the deal with global trade and investment?
International trade and investment are vital drivers of economic growth. With the size and shape of the world economy changing dramatically in recent years, traditional patterns of trading and investing have had to rapidly evolve alongside it. The challenge is to ensure that the regulatory framework keeps up.
There have been so many changes in the way we do business. The growth of the digital economy, the rise of the service sector and the spread of international production networks have all been game-changers for international trade.
As well as this, foreign direct investment has become a key element of trade between different countries. Rather than simply trading with international partners, more and more companies are buying controlling stakes in foreign enterprises.
Despite fundamental changes in the way business is done across borders, international regulations and agreements have not evolved at the same speed. In addition, negotiations to reach a new global trade agreement have stalled.
While there have been a string of bilateral deals struck between countries and regions, there is a pressing need to reform the global trade framework. We also need to address the growing unease over globalization, which is evident from the number of questions being asked about the power of corporations and the adequacy of the regulations governing employment, environmental issues and taxation.
9)Long-term investing: how can we plug the gap?
Investing for the long term is vital for economic growth and social well-being. Whether it’s building new infrastructure or maintaining what already exists, funding is vital to maximize the economic benefits that flow from it.
But seven years after the global financial crisis, the world is still facing sluggish economic growth and constrained government budgets. As a result, there is an overall lack of long-term investment, which has serious implications for global growth.
The challenge is to find ways of funding the basic systems and services that countries need to function in a difficult financial climate.
10)How can we make healthcare fit for the future?
Over the past few decades, the world has seen major advancements in health and largely as a result, people are generally living longer, healthier lives. However, serious challenges to global health remain, ranging from dealing with pandemics to the rise of noncommunicable diseases (NCDs) to the prohibitive costs of care, particularly in developing countries.
The number of people on the planet is set to rise to 9.7 billion in 2050 with 2 billion aged over 60.
The global health system will need to adjust to this massive population growth, which will be concentrated in the poorest countries, and increasing numbers of elderly. This will mean shifting the current focus on treating sick people towards preventing illness and preserving the health of populations.
To cope with this huge demographic shift and build a global healthcare system that is fit for the future, the world needs to address these challenges now.
Note:- Any uncovered news will be covered in subsequent posts.