Fourth Industrial Revolution

The rise of the machines: lessons from history on how to adapt


As the pace of change accelerates, so the alarm levels ratchet up.'

Johan C. Aurik
Partner and Chairman Emeritus, Kearney
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Fourth Industrial Revolution

This article is part of: World Economic Forum Annual Meeting

Disruptive technologies are dictating a new future for humankind. Almost every day we hear of new advances that blur the lines between the realms of the physical, the digital and the biological. Robots are now in our operating rooms and fast-food restaurants. It’s possible, using 3D imaging and stem cell extraction, to grow human bone from a patient’s own cells. 3D printing is creating a circular economy - rather than the linear model of making things then throwing them away - by altering how we use and recycle raw materials.

This tsunami of technological change is clearly challenging the ways in which we operate as a society. Its scale and pace are profoundly changing how we live and work, and signposting fundamental shifts in all disciplines, economies and industries.

In what we now call the Fourth Industrial Revolution, we will see the confluence of several technologies that are coming of age, including robotics, nanotechnology, virtual reality, 3D printing, the Internet of Things (IoT), artificial intelligence (AI) and advanced biology.

Although at different stages of development and adoption, as these technologies bed in, becoming more widespread and convergent, we will see a radical shift in the way that individuals, companies and societies produce, distribute, consume and re-use goods and services.

Will the new industrial revolution destroy jobs?

These developments are prompting widespread anxiety about what role humans will have in the new world. As the pace of change accelerates, so the alarm levels ratchet up. A University of Oxford study estimated that close to half of US jobs could be lost to automation over the next two decades. In the opposite camp, economists like James Bessen argue that, on the contrary, automation and jobs often go hand in hand.

It’s impossible at this point to predict what the overall impact on employment will be. Disruption will happen; of that we can be certain. But before we swallow all of the bad news, we should take a look at history. Because this tells us that it is more often the nature of work – rather than the opportunity to take part in work – that will be impacted.

How industrial revolutions changed the nature of work

The first industrial revolution took British manufacturing out of people’s homes and into factories, creating the beginnings of organizational hierarchy. People moved from rural areas to industrial ones, change was often violent – the famous “Luddite riots” in early 19th century England are a case in point – and the first labor movements emerged.

The second one was characterized by electrification, large-scale production and the expansion of transportation and communication networks. It led to the birth of the professions – such as engineering, banking and teaching – created the middle classes, and introduced social policies and the role of government.

And as electronics and information technology automated production during the third industrial revolution, many human jobs started to become service-driven. When automated teller machines (ATMs) arrived in the 1970s, it was initially viewed as a disaster for workers in the retail banking industry. Yet branch jobs actually increased over time as branch cost went down, becoming less transactional in nature and more about managing customer relationships.

What can we learn from history?

Each industrial revolution has brought attendant disruption, and the fourth wave will be no different. We must remember this and use what we have learned to manage the change:

· Focus on skills. Instead of focusing on the specific jobs that will appear or disappear, we should instead concentrate on the skills that will be needed, then educate, train and reskill the human workforce to leverage the new opportunities afforded by technology. HR departments, educational institutions and governments will be at the forefront of driving this.

· Protect the disadvantaged. Experience points repeatedly to the need to protect the disadvantaged and create the time and means for them to adjust. As we have seen this year, it is more important than ever not to let inequalities create social groups who have lost all hope on the altar of progress.

· Work together to create new ecosystems. Government will have a crucial role to play, along with business and civil society leaders, in driving the appropriate levels of collaboration, regulation and standards that will be needed to ensure that the fourth industrial revolution translates into economic growth and creates benefits for all.

I am not under any illusions this will be easy. Particularly in democracies, change will be hard and slow. It will require a mix of forward-looking policy-making, agile regulatory frameworks and – above all – effective partnerships that cross our organizational and national boundaries. Politics, rather than technology, will determine the pace of change.

Denmark is rightfully an often quoted example here, where its “flexicurity” system allows for a high degree of labour law flexibility, while offering citizens a safety net of benefits, training and reskilling.

Have you read?

One final thought. Despite the exponential pace of technological change, we should not forget the all-important role of time. While the changes ahead will be momentous – indeed, revolutionary – they will not land as a big bang. On the contrary, they will likely take place over many decades. We have time, therefore, to adjust; as individuals, as companies and as societies. For sure, this is no reason to wait and see, but rather one to get to work and create the new future.

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The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Fourth Industrial RevolutionEmerging Technologies
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