Author: Klaus Schwab
Publisher: The Fourth Industrial Revolution
Reviewer: Ian Stirk
Our final selection from the book reviews of 2016 aims to be a primer on the fourth industrial revolution, explaining what it is, what it will bring, how it will impact us.
The fourth industrial revolution is built upon the digital age, and incorporates mobile internet, small powerful cheap sensors, artificial intelligence and machine learning. These technologies are creating ever accelerating changes, likely to affect everyone’s future – so it’s a topic worthy of investigation.
This book is relatively short, consisting of an introduction, three main chapters, a conclusion, and an appendix – all in less than 200 pages. Aimed at anyone with an interest in the future, the opportunities that technological changes may bring, and how they might contribute to a better world, it comes from Professor Klaus Schwab, the Founder and Executive Chairman of the World Economic Forum. The Wikipedia entry on the WEF, which is responsible for the annual Davos conference, says:
...its mission is cited as "committed to improving the state of the world by engaging business, political, academic, and other leaders of society to shape global, regional, and industry agendas".
Below is a chapter-by-chapter exploration of the topics covered.
Chapter 1 – The Fourth Industrial Revolution
The book opens with a brief overview of the previous revolutions:
Agrarian – from foraging to farming. Starting around 10,000 years ago
First industrial – from muscle to mechanical power, involving steam engine and railways. c1760 – 1840s
Second industrial – involved electricity and the assembly line. c1880s – 1920s
Third industrial – computer/digital age. c1960s – 2000
The author postulates today we are at the start of the fourth industrial revolution. Built on the digital age, and distinguished by a ubiquitous and mobile internet, small powerful cheap sensors, artificial intelligence and machine learning. It’s suggested we’re at an inflection point for change.
The fourth industrial revolution is not just about smart machines, it also involved physical, digital and biological domains – making it different from previous revolutions. Also the speed and scope of change is unprecedented. The author is concerned the revolution could be restricted by a lack of understanding by leaders, and a lack of a central body to communicate its benefits and challenges.
The chapter continues with a look at the profound changes that may come. Precedence for the speed and impact of change, can be seen in disruptive businesses like Uber and Airbnb. The author notes that increasingly, technology companies have relatively high market valuation and employ fewer staff. This was also discussed by Martin Ford in his book “The Rise of the Robots” (reviewed here: www.i-programmer.info/bookreviews/28-general-interest/9389-rise-of-the-robots-technology-and-the-threat-of-a-jobless-future-basic-books.html).
The chapter looks at potential winners and losers. Whilst it’s not possible to predict what applications may be created in a few years, AI and machine learning especially hold promise, with driverless cars, intelligent robots, and talking devices. Although consumers in particular will benefit, with cheaper good/services, it may be a challenge for the revolution to create sufficient work for people, exacerbating inequalities. It seems the people benefiting the most will be the innovators and investors.
This chapter provides a useful overview of previous revolutions, and explains the reasons why we now are entering a fourth industrial revolution. Some recent disruptive technologies are briefly discussed, together with the hope of what the future could bring, and some potential concerns.
The chapter is well written, easy to read, and concise. There are helpful inter-chapter links, together with links to further information. These traits apply to the whole book.
Chapter 2 - Drivers
In this section, this author discusses various drivers of the forth industrial revolution, based on work done by the World Economic Forum (the author’s employer). All the innovations discussed rely on burgeoning computer processing power.
The drivers investigated are:
Internet of Things (monitors/sensors)
Blockchain (e.g. bitcoin)
On-demand economy (e.g. Uber)
Synthetic biology (to correct genetic errors)
Precision medicine (targeted therapies)
In each case, the technologies are described, and some current and potential uses are outlined.
The chapter ends with a look at tipping points, i.e. when specific technologies shift to mainstream society usage. The World Economic Forum published a list of 21 tipping points in 2015, were experts and executives opined on their likelihood. All the tipping points are expected to become true by 2025, supporting the idea a period of rapid change is approaching. Changes include:
Each of these tipping points is discussed in greater detail, giving its pros and cons, in the appendix.
This chapter provides an interesting overview of some of the current drivers of the fourth industrial revolution. The speed, scope and interaction of these changes is noted, together with the notion that although we don’t know what the future holds, it can and should be planned, for the greater good of everyone.
Chapter 3 - Impact
This chapter forms the heart of the book, and aims to discuss the potential impact of change on the economy, business, various levels of government, society, and the individual. The viewpoint of both the techno-optimist and the techno-pessimist are discussed in each case.
It’s suggested there will be a huge impact on the economy, judged by its traditional measures (e.g. GDP, trade). People will be able to consume more at a lower price, although the possibility of a continuation of the recent slow growth rate, due to aging and slowing productivity, is also briefly highlighted. The likely impact of the fourth revolution on inequality and employment is discussed. There’s an optimistic note that human needs and wants are infinite, so the supply should also be infinite, in the long term. There’s an interesting table of jobs/professions that are most likely to be lost to automation in the near-future. The impact of the changing nature of work is discussed, with reference to the Human Cloud. It’s reiterated that the direction of the future can be of our choosing.
It’s thought that there will be an impact on how companies are organized and resourced. Various business disruptions are examined, including supply chain changes, agile and innovative competitors, and changes in consumer behaviour (e.g. increasing mobile phone usage). The impact of the fourth revolution on business is examined, with relevant examples, from the perspective of: Changing consumer Expectations, Data-Enhanced Products, Collaborative Innovation, and New Digital-based Operating Models.
The chapter continues with a look at the impact of the fourth revolution, from the perspective of Governments, Countries/Regions/Cities, and international security – with an emphasis on how each interacts with their citizens. The possibility of increasing inequality and social unrest is noted.
Next, the impact of the fourth revolution on society is in focus. Will it emphasise differences between groups (e.g. religious and non-religious)? Will inequality and unrest increase? How will the individual relate to the community? All these topics are outlined in a balanced manner, with relevant supporting examples.
The chapter ends with a look at the impact of the fourth revolution on the individual, what we do, what we are, privacy, ownership, consumption patterns, work, leisure, and skills.
In coping with the disruptive changes brought by the fourth revolution, the author suggests applying 4 different types of intelligences: mind (how we apply knowledge), heart (how we relate to each other), soul (common good), and body (increase well-being) – each of these is discussed with examples. Whilst interesting, this section felt a bit wishy-washy.
This chapter, as to be expected, is the most tenuous – since the future is unknown. However, there are advantages in making tentative plans based what is expected, especially to negate any deleterious consequences. I’m surprised the topic of Guaranteed Minimum Income didn’t arise.
Appendix: Deep Shift
This appendix discusses a list of 21 tipping points (e.g. robotic pharmacists), published by the World Economic Forum in 2015, where executives and experts opined on their likelihood. In each case, the tipping point is described, together with a likelihood score, positive/negative/unknown impact, and any pilot examples already extant.
This book aims to be a primer on the fourth industrial revolution, explaining what it is, what it will bring, how it will impact us – and succeeds in all these points.
The book is well written, easy to read, clear and concise. References are given to support the assertions made. There are helpful inter-chapter links, together with links to further information. The fourth industrial revolution is explained, its drivers are examined, and its potential impact on economy, business, various levels of government, society, and the individual outlined.
While it is difficult to foresee the impact of new technologies, this book makes a good guess, using what’s currently known about near-future technologies. Where possible, the author gives the pros and cons of any change. What’s missing from the book is a tangible “What steps should governments/businesses/people undertake next”… Perhaps thats too much to ask, even from as august a body as the World Economic Forum.
The coming fourth industrial revolution will have a profound impact, its consequences deserve to be examined now, while we have a chance to plan a future that delivers greater benefits to a wider population. Highly recommended.
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