Fourth Industrial Revolution

5 ways the Fourth Industrial Revolution transformed 2017 (and 5 ways it did not)

Image: REUTERS/Francois Lenoir

Nicholas Davis
Professor of Practice, Thunderbird School of Global Management and Visiting Professor in Cybersecurity, UCL Department of Science, Technology, Engineering and Public Policy
Anne Marie Engtoft Larsen
Knowledge Lead, Science and Technology Studies, World Economic Forum Geneva
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Fourth Industrial Revolution

This article is part of: World Economic Forum Annual Meeting

In a fast-paced world it can be difficult to see the big changes even as they unfold in front of us. Looking back at 2017, in what ways did emerging technologies significantly impact the world in the past 12 months? We found five signposts indicating that the Fourth Industrial Revolution indeed transformed our lives and societies in 2017 – and five areas where transformations are yet to come.

1. Ethics: addressing biases and assumptions in technologies

One hallmark of 2017 was that technology companies started to admit how powerful their impact was on society and people, and acknowledge the importance of addressing the ethical implications of technologies. Before this, the debate tended to be a fight between either those inclined to technology hype and those expressing deep fear of a nearby dystopian future. But in 2017, Google’s DeepMind established its Ethics and Society Unit to scrutinise the societal impact of their technologies, and the New York University launched the AI Now Institute acknowledging that technologies have inherent biases. And in March 2017, the World Economic Forum launched its Center for the Fourth Industrial Revolution in San Francisco, to address the societal effects of emerging technologies and scientific advances.

2. Crypto frenzy: bitcoin went mainstream, blockchain goes hyper

Bitcoin began around 2009 as a niche interest among crypto nerds. In 2017 it became a mainstream matter with even grandmothers investing in the now famous currency. Over the course of 2017, the value of Bitcoin increased a staggering 2000%, leading many to warn of a bubble. Whether the popular interest in cryptocurrencies and other uses of the blockchain is an expression of a waning of social trust in traditional institutions, an underinformed technology frenzy or a recognition of a technology with incredible potential, it successfully widened the debate around distributed value and spurred unprecedented popular interest in one of the Fourth Industrial Revolution’s most interesting technologies.

3. The new geography of innovation: shifting power from West to East one algorithm at the time

The center of gravity for the development of artificial intelligence may have happened in the West since the late 1950s, but 2017 was the year when it became clear that the AI’s future will largely be determined in the East. China emerged as a global leader in AI. The country’s sweeping AI vision aims at outperforming the rest of the world within the next years and affirmed that in China AI is seen as an essential engine of industrial transformation. While China invested heavily in AI research, the US government reduced funding for AI and tightened immigration rules for international researchers. But it is not just in AI technologies that China is taking a lead. A new research plan for precision medicine will see China surpass the hitherto Western dominated space of pharmaceuticals as for every $1 spend on precision medicine research in the US, China will spend $43.

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4. Platform economies: from euphoria to backlash

Many have grown used to the idea of platform business models disrupting traditional industries – and the idea enjoys considerable public support – in 2017 many platforms found themselves facing a popular backlash. Popular resistance from concerns over wages, taxation and housing led to a challenges to Uber in countries including Bulgaria, Denmark, the UK, Italy and Hungary, Finland, Spain and the Netherlands while AirBnb experienced bans and limitations to their business operations in Berlin, Reykjavik, New Orleans and New York.

5. Cyber security: warfare in a world of zeros and ones

2017 also proved to be a historical year in cybersecurity. Two unprecedentedly large attacks – WannaCry launched from North Korea in May and NotPetya in June – demonstrated that in the Fourth Industrial Revolution the outcome of geopolitical conflicts will depend as much on digital code as military superiority and GDP. They also demonstrated that cyber risks extend far beyond personal data breaches, affecting health and energy systems with very direct impacts on people. And in 2017 not even democratic governments were able to safeguard electoral processes against cybercrime. The Congressional hearings in the US regarding Russian-sponsored advertising in the 2016 election and questions regarding electoral interference from Russia in the French presidential election alluded that as we enter 2018, the integrity and trust in political systems is severely challenged and without immediate powerful solutions.

Five things that didn’t happen (yet)

Perhaps even more interesting than what happened is what hasn’t happened yet – and what we should be looking to achieve, or avoid, in 2018.

1. Narrowing of the gender pay gap

With women protesting in over 20 countries and the historical #metoo campaign, looking back at 2017 one would hope that the Fourth Industrial Revolution will be female. However, according to a Forum report the reality is quite the opposite. The gender gap actually widened in 2017 and it will take an astounding 217 years to close the gap in pay and employment opportunities – a problem faced particularly in the tech industry.

2. A concerted push around technology for development

The death in December 2017 of one of Africa’s leading innovation scholars, Harvard Kennedy School Professor Calestous Juma, served to highlight the urgent need for less developed countries to benefit more from new technologies. While many people talk about the prospect for technological “leapfrogging”, sustainable economic development requires serious investments in infrastructure, skills and local innovation ecosystems. 2017 ended without any substantial agreements at the World Trade Organization meeting in Argentina, suggesting that hopes around the potential of technology may be overshadowing the reality of much-needed investment.

3. More agile governments

2017 saw more government attention being paid to the issue of the Fourth Industrial Revolution – the UAE appointed a minister of AI, the UK and South Korea established Fourth Industrial Revolution government bodies and Denmark appointed the world’s first tech ambassador - but meaningful structural change is still far off. In his latest book, Shaping the Fourth Industrial Revolution, World Economic Forum Founder and Executive Chairman Klaus Schwab calls for bold reforms of our governance models encouraging more agile, inclusive and human-centred governance processes. For governments reading this wishing to respond to this call for action in 2018, you will find more on how to master agile governance here.

4. Policy adoption of universal basic income

While the mood toward universal basic income became more favourable in 2017, with the announcement of experiments in Hawaii, Finland, Kenya, Ontario and Scotland, we have yet to see the results of large-scale experiments pointing toward whether this can be a source of radical positive systemic transformation.

5. Widespread technological unemployment

On the flip side, tech-related job losses in 2017 decreased against expectation. In fact, jobs markets in both the US and Europe strengthened. But as we enter 2018, worrying signs indicate that the impact of automation is just around the corner. In October 2017, the National Australian Bank announced both record profits, but also the decision to cut 20 % of their workforce over the next 3 years due to expected impact of future automation. And MIT researchers found that in the near future, automation will impact smaller cities at a much greater scale than large cities.

Looking back at what did and did not happened in 2017 leaves one thing clear: How the Fourth Industrial Revolution unfolds in 2018 is up to each and every one of us. Whether it seeks to closes the gender gap, empower people all across the globe and seeks bold approaches to govern all these exciting emerging technologies for a more inclusive, sustainable future for human-kind is eventually up to you and me. So let’s get to work!

Klaus Schwab’s new book, Shaping the Fourth Industrial Revolution, launched on 18 January 2018, and is available here:

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