TheFour

thI
ndust
ri
alRev
olut
ion:
whati
tmeans,
howt
orespond

West andont hebrinkofat echnol ogicalr

ev oluti
ont hatwil
l
fundament all
yalterthewaywel i
ve,
wor k,andr elatetoone
another .I
nitsscale,scope, andcompl exi
ty,thetransformati
on
willbeunl i
keanythinghumanki ndhasexper iencedbef or
e.Wedo
noty etknowj usthowi twi l
l unf ol
d,butonet hingi sclear
:the
responset oitmustbei ntegr atedandcompr ehensive,i
nvolvi
ng
allstakeholdersofthegl obal poli
ty,
from thepubl i
candpr i
vate
sector stoacademi aandci v i
l societ
y.

TheFi r
stIndustri
al Rev olutionusedwat erandst eam powert o
mechani zeproduct ion.TheSecondusedel ectri
cpowert ocreate
masspr oduct
ion.TheThi rdusedelectronicsandi nformation
technologytoaut omat epr oducti
on.NowaFour t
hI ndustri
al
Revoluti
oni sbuildingont heThi r
d,t
hedi gitalrevolutionthathas
beenoccur ri
ngsi ncet hemi ddleofthelastcent ury.Itis
characteri
zedbyaf usi
onoft echnol
ogiest hati sblurringtheli
nes
betweent hephy sical,digital,
andbiological spheres.

Ther earethreereasonswhyt oday’stransf or

mat ionsrepresent
notmer elyapr olongat
ionoftheThi r
dI ndustri
alRev oluti
onbut
ratherthearriv
al ofaFourthanddistinctone: velocity,
scope, and
systemsi mpact .Thespeedofcur r
entbr eakthroughshasno
histori
calprecedent.Whencompar edwi thpreviousi ndustri
al
revoluti
ons,theFour t
hisevolvi
ngatanexponent ialratherthana
l
inearpace.Mor eover,
iti
sdisrupt
ingal mostev er yindustryin
everycount r
y.Andt hebreadthanddept hofthesechangesher al
d
thet r
ansformat i
onofentir
esy st
emsofpr oducti
on, management ,
andgov
ernance.

Thepossibil
it
iesofbi l
lionsofpeopl econnect edbymobi l
e
devices,
withunpr ecedentedpr ocessingpower ,st
oragecapacity,
andaccesst oknowl edge, areunl i
mi t
ed.Andt hesepossibil
i
ties
willbemulti
pli
edbyemer gingt echnologybr eakthroughsinfiel
ds
suchasar t
if
icial
intell
igence, robotics,theInternetofThings,
autonomousv ehicles,3-Dpr inti
ng,nanot echnology ,
biot
echnology,mat eri
alssci ence,ener gystorage,andquant um
comput i
ng.

Already ,arti
fi
cialintell
igencei sallaroundus, fr
om sel f-drivi
ng
car sanddr onest ov i
rtual assistantsandsof twar ethatt ranslat
e
ori nvest.Impr essivepr ogr esshasbeenmadei nAIi nr ecent
year s,driv
enbyexponent ialincreasesi ncomput ingpowerandby
theav ailabil
it
yofv astamount sofdat a,from sof twar eusedt o
discov ernewdr ugst oal gor i
thmsusedt opr edi
ctourcul t
ural
i
nt erests.Digitalfabricationt echnologies, meanwhi l
e, are
i
nt eracti
ngwi t hthebi ologi calwor l
donadai l
ybasi s.Engi neers,
desi gners,andar chitectsar ecombi ningcomput ati
onal design,
addi ti
vemanuf acturing, mat erial
sengi neering,andsy nthet i
c
biologyt opioneerasy mbi osisbet weenmi croorgani sms, our
bodi es,thepr oduct sweconsume, andev ent hebui l
dingswe
i
nhabi t.

Chal
l
engesandoppor
tuni
ti
es
Liket her ev olutionsthatprecededi t
,theFour th
Indust r
ial Rev olutionhasthepot enti
al toraiseglobal
i
ncomel ev elsandi mprovethequal i
tyofl i
fefor
popul ationsar oundt hewor l
d.Todat e, t
hosewho
havegai nedt hemostf r
om ithav ebeenconsumer s
ablet oaf for dandaccesst hedi gitalwor l
d;
technol ogyhasmadepossi bl
enewpr oduct sand
servicest hati ncreasetheef f
ici
encyandpl easureof
ourper sonal lives.Orderi
ngacab, bookingaf l
i
ght,
buyingapr oduct ,maki
ngapay ment ,
listeningto
musi c,wat chingaf i
lm,orplay i
ngagame—anyof
thesecannowbedoner emot ely.
Inthef ut
ure,technological i
nnovati
onwi l
lalsol
ead
toasuppl y-si
demi r
acle,wi t
hlong-term gai nsin
eff
iciencyandpr oduct i
v i
ty.Transportationand
communi cati
oncost swi lldrop,l
ogisticsandgl obal
supplychai nswillbecomemor eeffect i
ve,andthe
costoft r
adewi lldiminish,allofwhichwi l
lopennew
mar ketsanddr i
veeconomi cgrowth.
Atthesamet i
me,ast
heeconomistsEr
ik
Brynj
olfssonandAndr
ewMcAf eehavepoint
edout
,
therevolut
ioncoul
dyi
eldgr
eateri
nequal
it
y,
parti
cularl
yinitspotent i
altodi sruptlabormarket s.
Asaut omationsubst i
tutesf orl aboracrossthe
enti
reeconomy ,thenetdi splacementofwor kersby
machi nesmi ghtexacerbat ethegapbet weenr eturns
tocapi t
alandr et
urnstol abor .Ont heotherhand, it
i
sal sopossiblethatthedi splacementofwor ker sby
technologywi l
l,i
naggr egate, resulti
nanetincr ease
i
nsaf eandr ewar di
ngjobs.
Wecannotf or eseeatt hispoi ntwhi chscenar iois
l
ikelyt oemer ge, andhi storysuggest st hatthe
outcomei slikel ytobesomecombi nationoft hetwo.
Howev er,Iam conv incedofonet hi
ng—t hatinthe
future,talent,mor et hancapi t al
, wil
lrepresentthe
cri
tical f
actorofpr oduct ion.Thi swillgiverisetoa
j
obmar ketincr easi nglysegr egat edinto“ l
ow-
skill
/low-pay ”and“ hi gh-skil
l/high-pay”segment s,
whi chint urnwi llleadt oani ncr easeinsoci al
tensions.
Inaddi
ti
ont obeingakeyeconomi cconcern,
i
nequali
tyrepr
esent st
hegr eat
estsociet
alconcer
n
associ
atedwiththeFourthIndustr
ialRevol
uti
on.The
l
argestbenefi
ciari
esofinnovati
ontendtobet he
providersofintell
ectualandphy sicalcapital—t he
i
nnov ators,shareholders,andi nvestors—whi ch
explainstherisi
nggapi nweal thbet weent hose
dependentoncapi talversuslabor .Technol ogyi s
ther
ef oreoneoft hemai nreasonswhyi ncomes
havest agnated,orev endecr eased, f
oramaj orit
yof
thepopul at
ioninhi gh-i
ncomecount ri
es:thedemand
forhighlyskil
ledwor kershasi ncreasedwhi let he
demandf orwor ker
swi thlesseducat ionandl ower
skil
l
shasdecr eased.Ther esultisaj obmar ketwi t
h
astrongdemandatt hehi ghandl owends, buta
holl
owi ngoutoft hemi ddle.
Thishelpsexpl ainwhysomanywor kersar e
disi
ll
usionedandf ear fult
hattheirownr eal i
ncomes
andt hoseoft heirchildrenwillcontinuet ost agnate.
Ital
sohel psexpl ainwhymi ddleclassesar oundt he
wor l
darei ncreasinglyexper i
encingaper vasive
senseofdi ssatisfactionandunf airness.Awi nner-
takes-al
leconomyt hatof f
ersonlylimitedaccesst o
themi ddl
ecl assi sar ecipefordemocr at i
cmal ai
se
andder el
iction.
Di
scont
entcanal
sobef
uel
edbyt
heper
vasi
veness
ofdigit
al t
echnol ogi esandt hedy nami csof
i
nf or
mat i
onshar ingt ypi
fiedbysoci al medi a.More
than30per centoft heglobal populationnowuses
socialmedi apl atformst oconnect ,
lear n,andshar e
i
nf or
mat i
on.I nani dealwor ld, t
hesei nt eractions
wouldpr ovideanoppor t
uni tyf orcross- cultural
understandingandcohesi on.Howev er , t
heycanal so
createandpr opagat eunr ealisticexpect ati
onsast o
whatconst itutessuccessf orani ndividual ora
group,aswel lasof feroppor tunit
iesforext reme
i
deasandi deol ogiest ospr ead.

Thei
mpactonbusi
ness:

Anunder l
y i
ngthemei nmyconv er
sati
onswi t
hgl obal
CEOsandseni orbusi
nessexecuti
vesisthatthe
accelerat
ionofinnovati
onandthev el
oci
tyof
disr
uptionarehardtocompr ehendorantici
pateand
thatthesedriv
ersconstit
uteasourceofconst ant
surpr
ise,evenf ort
hebestconnectedandmostwel l
i
nformed.I ndeed,acr
ossall
industri
es,t
hereiscl
ear
evi
dencet hatthetechnol
ogi
est hatunderpi
nthe
Fourt
hI ndustri
alRevol
uti
onarehav i
ngamaj or
i
mpactonbusi nesses.
Ont hesuppl ysi de,manyi ndustri
esar eseeingthe
i
nt roduct i
onofnewt echnol ogi
esthatcr eateenti
rel
y
newway sofser vingexisti
ngneedsandsi gni
fi
cantly
disruptexi sti
ngi ndustryv aluechains.Disrupti
onis
alsof lowingf rom agile,innovati
vecompet it
orswho,
thankst oaccesst oglobal digi
talplat
formsf or
resear ch,dev elopment ,mar ket
ing,sales,and
distributi
on, canoustwel l-
establi
shedi ncumbent s
fastert hanev erbyi mpr ovingthequal i
ty,speed,or
priceatwhi chv alueisdel i
vered.
Majorshi f
tsont hedemandsidearealsooccurri
ng,
asgrowi ngt r
ansparency,consumerengagement ,
andnewpat ternsofconsumerbehav i
or
(i
ncreasinglybuiltuponaccesstomobi l
enetworks
anddat a)forcecompani estoadaptthewaythey
desi
gn, mar ket,anddeli
verproduct
sandservices.
Akeyt
rendi
sthedev
elopmentoft
echnol
ogy
-
enabledpl atformst hatcombi nebot hdemandand
supplytodi sruptexi stingindust ryst ruct ures,such
asthoseweseewi thinthe“shar i
ng”or“ ondemand”
economy .Theset echnol ogypl atforms, render ed
easytousebyt hesmar t
phone, conv enepeopl e,
assets,anddat a—t huscr eati
ngent irelynewway sof
consumi nggoodsandser vi
cesi nt hepr ocess.In
addit
ion, theylowert hebar r
ier sforbusi nessesand
i
ndivi
dual st ocreat eweal th,alteringt heper sonal
andpr ofessional env ir
onment sofwor kers.These
newpl atform busi nessesar er apidlymul t
ipl
yinginto
manynewser v
ices, rangingf rom l aundr yto
shopping, from chor est opar king, from massagest o
tr
avel.
Onthewhol e,
therearefourmai nef fectsthatt
he
FourthI
ndustr
ialRevolut
ionhasonbusi ness—on
customerexpectat
ions,onpr oductenhancement ,on
coll
abor
ativ
einnovation,andonor gani zati
onal
for
ms.Whet herconsumer sorbusi nesses,
customersareincr
easinglyattheepi centerofthe
economy,whichisallaboutimpr ovinghow
customersareserved.Physicalproduct sand
ser v
ices,mor eov er,cannowbeenhancedwi th
digitalcapabili
ti
est hatincreaset heirv al
ue.New
technol ogi
esmakeasset smor edur ableand
resil
ient,whil
edat aandanal yt
icsar etransforming
howt heyaremai ntained.Awor l
dofcust omer
exper i
ences, data-basedser v i
ces,andasset
per f
ormancet hroughanal yt
ics,meanwhi l
e,requir
es
newf ormsofcol l
abor ati
on,par t
icular
lygi v
ent he
speedatwhi chi nnov ati
onanddi sruptionaret aki
ng
place.Andt heemer genceofgl obal platf
ormsand
othernewbusi nessmodel s,fi
nally,meanst hat
talent,cult
ure,andor ganizati
onal formswi llhaveto
ber ethought.
Ov er
all,theinexorabl eshiftfrom simpledigitizati
on
(theThi r
dI ndustri
al Revolution)toinnov at
ionbased
oncombi nati
onsoft echnol ogies(theFour th
Industri
al Revoluti
on)i sforcingcompani esto
reexami net hewayt heydobusi ness.Thebot t om
l
ine,howev er,i
sthesame: businessl eadersand
seniorexecut ivesneedt ounder standt hei
rchangi ng
env i
ronment ,
challenget heassumpt i
onsoft heir
operatingt eams, andr el
ent l
esslyandcont i
nuousl y
i
nnov
ate.

Thei
mpactongov
ernment:
Ast hephy sical,digital,andbi ological wor l
ds
cont i
nuet oconv er ge, newt echnologi esand
platformswi lli
ncr easi nglyenabl ecitizenst oengage
withgov ernment s,v oicetheiropinions, coordinate
theiref for
ts,andev enci r
cumv entthesuper vi
sionof
publicaut hor i
ties.Si mul t
aneousl y,gov ernment swill
gainnewt echnol ogi calpower st oincr easet heir
cont roloverpopul at i
ons, basedonper v asi
v e
survei l
lancesy stemsandt heabi li
tyt ocont roldigi
tal
i
nf r
ast ructure.Ont hewhol e,howev er,gov ernment s
willincreasinglyf acepr essuret ochanget heir
currentappr oacht opubl icengagementand
poli
cy making, ast hei rcentralroleofconduct i
ng
poli
cydi minishesowi ngt onewsour cesof
compet iti
onandt her edistr
ibutionand
decent rali
zat i
onofpowert hatnewt echnol ogies
makepossi ble.
Ult
imatel
y,theabi
l
ityofgov
ernmentsy
stemsand
publi
cauthori
ti
estoadaptwil
ldet
ermi
nethei
r
surv
ival.Iftheypr ovecapableofembr acingawor l
d
ofdisruptiv
echange, subject
ingthei
rstructuresto
thelevelsoft r
anspar encyandef f
ici
encyt hatwil
l
enablethem t omai ntainthei
rcompet i
ti
veedge, they
wil
lendur e.Iftheycannotev olv
e,theywill f
ace
i
ncreasingt rouble.
Thiswi l
lbepar t
icul
arl
yt r
uei nthereal
m of
regulati
on.Cur r
entsystemsofpubl icpolicyand
decision-
maki ngevolvedalongsidetheSecond
Industri
alRev ol
uti
on,whendeci sion-
maker shad
timet ostudyaspecificissueanddev elopt he
necessaryr esponseorappr opri
ateregulatory
framewor k.Thewhol eprocesswasdesi gnedtobe
l
inearandmechani st
ic,foll
owingast r
ict“topdown”
approach.
Butsuchanappr oachisnolongerfeasi
ble.Given
theFourt
hIndustri
alRevolut
ion’
srapidpaceof
changeandbroadi mpacts,l
egisl
ator
sand
regul
ator
sarebeingchallengedtoanunpr ecedented
degreeandforthemostpar tareprovi
ngunabl eto
cope.
How,
then,
cant
heypr
eser
vet
hei
nter
estoft
he
consumer sandt hepubl i
catl argewhilecont inui
ng
tosuppor tinnovationandt echnological
development ?Byembr acing“ agil
e”gov ernance, j
ust
asthepr ivatesectorhasi ncreasingl
yadopt edagile
responsest osof twaredev elopmentandbusi ness
operationsmor egener all
y.Thi smeansr egulators
mustcont i
nuouslyadaptt oanew, fast-changi ng
envir
onment ,r
einventi
ngt hemsel vessot heycan
trul
yunder standwhati tist heyareregul ati
ng.Todo
so,gov ernmentsandr egulatoryagencieswi llneed
tocollaboratecloselywi t
hbusi nessandci vi
lsociety
.
TheFour thIndust r
ialRev ol
ut i
onwi llal
sopr ofoundly
i
mpactt henat ureofnat ional andi nternational
secur
ity,aff
ect ingbot ht hepr obabi l
it
yandt henatur
e
ofconfli
ct.Thehi storyofwar f areandi nter nati
onal
secur
ityisthehi storyoft echnol ogicalinnov ati
on,
andtodayi snoexcept i
on.Moder nconf li
cts
i
nvolvi
ngst at esar eincreasi ngl y“hybri
d”i nnat ure,
combiningt raditionalbat tl
efieldt echniqueswi th
el
ement spr ev i
ousl yassoci atedwi thnonst at eactor
s.
Thedisti
nctionbet weenwarandpeace, combat ant
andnoncombat ant ,andev env iolenceand
nonvi
olence(t
hinkcyber
war
far
e)i
sbecomi
ng
uncomfortabl
yblur
ry.
Ast hisprocesst akespl aceandnewt echnologies
suchasaut onomousorbi ologi
calweaponsbecome
easiert ouse, indi vi
dual sandsmal lgroupswi l
l
i
ncreasi ngl
yj oi nst atesi nbei ngcapableofcausi ng
masshar m.Thi snewv ulnerabil
i
tywil
l l
eadtonew
fears.Butatt hesamet ime, advancesintechnology
willcreatethepot ential toreducethescaleor
i
mpactofv i
ol ence, t
hr ought hedev el
opmentofnew
modesofpr ot ection, forexampl e,orgreater
precisionint ar geting.

mpactonp
Thei eopl
e:

TheFourthIndustr
ialRevoluti
on,fi
nal
ly,
wil
lchange
notonlywhatwedobutal sowhowear e.I
twill
aff
ectouridenti
tyandal lt
heissuesassoci
atedwit
h
i
t:oursenseofpr i
vacy,ournotionsofownershi
p,
ourconsumpt i
onpatterns,thetimewedevoteto
workandl ei
sure,andhowwedev el
opourcar eers,
cul
tivateourskil
l
s,meetpeopl e,andnurture
rel
ationshi
ps.Iti
salreadychangingourheal t
hand
l
eadingt oa“quantif
ied”sel
f,andsoonert hanwe
thi
nki tmayleadtohumanaugment at
ion.Thelisti
s
endlessbecauseitisboundonl ybyouri maginati
on.
Iam agr eatenthusiastandearlyadopterof
technology,butsomet i
mesIwonderwhet herthe
i
nexor abl
eintegrati
onoft echnologyinourl i
ves
coulddiminishsomeofourqui ntessenti
al human
capaciti
es,suchascompassi onandcooper ati
on.
Ourrelati
onshipwi t
hoursmar t
phonesi sacasei n
point.Constantconnectionmaydepr i
veusofoneof
l
ife’
smosti mpor tantassets:t
het i
met opause,
refl
ect,andengagei nmeani ngfulconversati
on.
Oneoft hegreatesti
ndividualchall
engesposedby
newi nformationtechnologiesisprivacy.We
i
nstinctivel
yunder st
andwhyi tissoessent i
al,y
et
thetrackingandshar ingofinformationaboutusi sa
crucialpartofthenewconnect i
vit
y.Debat esabout
fundament alissuessuchast hei mpactonouri nner
l
ivesoft helossofcont roloverourdat awillonl
y
i
ntensifyi
nt heyearsahead.Si mi l
arl
y,the
revol
uti
onsoccur ri
ngi nbiotechnologyandAI ,whi
ch
areredefi
ningwhati tmeanst obehumanby
pushingbackt hecurrentthresholdsofl i
fespan,
healt
h,cogniti
on,andcapabi l
i
ties,wil
lcompel ust
o
redefi
neourmor alandet hicalboundar i
es.
Shapi
ngt
hef
utur
e
Neithert echnologynort hedisr upti
ont hatcomes
withitisanexogenousf orceov erwhichhumans
havenocont r
ol.Allofusar eresponsi bleforgui
ding
i
tsev olution,inthedecisionswemakeonadai l
y
basisasci t
izens,consumer s, andi nv
estors.We
shouldt husgr asptheoppor t
uni tyandpowerwe
havet oshapet heFourthI ndust ri
alRevoluti
onand
dir
ectitt owar dafuturet hatreflectsourcommon
objecti
v esandv al
ues.
Todot his,howev er
,wemustdev elopa
compr ehensiveandgloball
ysharedviewofhow
technologyisaf f
ecti
ngourliv
esandr eshapingour
economi c,social
,cul
tur
al,andhumanenv i
ronments.
Therehasnev erbeenatimeofgr eat
erpromi se,
or
oneofgr eaterpotenti
alperil
.Today’sdecisi
on-
maker s,however,aretooof t
entrappedint r
aditi
onal
,
l
inearthinki
ng,ortooabsor bedbyt hemul ti
ple
cri
sesdemandi ngtheiratt
enti
on,tothink
str
ategicall
yaboutt heforcesofdisrupti
onand
i
nnov ati
onshapi ngourf ut
ure.
Intheend, i
tallcomesdownt opeopl eandv al
ues.
Weneedt oshapeaf uturet hatwor ksforallofusby
putti
ngpeopl efirstandempower ingthem.Inits
mostpessi mistic,dehumani zedf orm, t
heFour t
h
Industr
ial Revolutionmayi ndeedhav et hepotent
ial
to“robotize”humani t
yandt hust odepr i
veusofour
heartandsoul .Butasacompl ementtot hebest
partsofhumannat ur
e—cr eat i
v it
y,empat hy,
stewardshi p—itcanal solifthumani tyintoanew
coll
ecti
v eandmor alconsci ousnessbasedona
sharedsenseofdest iny.Itisi ncumbentonusal lto
makesur et helatterprevails.

Sour
ce:
WEF