The Fourth Industrial Revolution will change the way societies live, work and relate to each other. It will also bring new challenges for individuals, organisations and countries.
The world economy in the 4th industrial revolution will be driven by intellectual capital and inventions. The winning companies will innovate and improve themselves continuously, choosing to re-invest their profits in new products, technology, and the skills and knowledge of their employees, rather than in physical assets such as vehicles or machines. As a result money continues to be invested in listed companies with soaring share prices which never show a profit. Today over half the world’s population are Internet users, feeding on intellectual capital.
Think about Uber and Netflix, Amazon and Tesla. New technologies are combining the physical, digital and biological worlds to create new disruptive businesses, impacting every discipline, country, economy and industry. Many people embrace the new technologies with enthusiasm, expecting the impact to be benign. Billions of people connect to digital networks every day, the efficiency of organisations is improving through technology and robotics, and we hope scarce resources will be managed responsibly to protect the natural environment, undoing the damage of previous industrial revolutions. Opinions differ on the speed at which the revolution will take place.
I read that car ownership will become a thing of the past. My grocery purchases will be handled by artificial intelligence. A virtual reality shopping mall will provide a fashion show of my elderly self wearing different outfits. My annual MRI scans will be done by a robot and diagnosed using artificial intelligence.
However, the revolution – when it finally arrives - will also bring its own challenges. Organizations who don’t adapt, and governments slow to employ and regulate new technologies, will fail. Global companies will move jobs to the countries where they gain the most efficiencies. People who cannot or will not adapt to ongoing re-learning, will fail. When jobs are lost inequalities grow and societies fragment. Shifts in the power base of interest groups can lead to social unrest and security concerns.
But it also creates opportunities. I think of the Luddites, the 19th-century loom workers who destroyed machines in the English wool mills, which they believed were threatening their jobs. After things calmed down, many of those loom operators were promoted to supervisor positions where they could manage several looms at the same time. I expect automation to free up accountants and bank staff to be able to spend more time with their clients, advising, selling new products.
The Fourth Industrial Revolution and stakeholder capitalism will affect the way corporations are governed and regulated, and our understanding of the term “success. People can choose the technologies that work for them. In the Third World the cell phone has revolutionised peoples’ lives. Airtime can be traded as a currency unit. A cell phone can be used as a communication device, a store of value, a bank, a payment mechanism, a money transfer, and proof of identity.