4th Industrial Revolution

Treasury English Club

The Fourth Industrial Revolution

• the Fourth Industrial Revolution, which is expected to

reach a tipping point around 2025,
• will clearly separate the winners from the losers among
countries.

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The Fourth Industrial Revolution

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Source: Schwab (2016) 4
Source: Schwab (2016)
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Relative Ranking from World Economic Forum Global Competitiveness Report
Using Fourth Industrial Revolution Categories

Source: UBS (2016) 6

Disappearing Jobs?

• Within next 10 to 20 years, about 47% of all jobs in the

U.S. are threatened by automation (Frey and Osborne,
2013).

• Number of manufacturing jobs in the U.S. almost halved

from 21 million to 12 million during the past 35 years.
In contrast, the number of smart labors in high-tech sector such
as Internet, Scientific R&D, Pharmaceutical, Software have
increased (Moretti, 2012).

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Demise of an American Giant

Source: Moretti (2012)

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Hollowing Out of the American Labor Market

Source: Moretti (2012)

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Smart Labor in U.S.

Source: Moretti (2012)

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Portfolio of Industries

Source: Yoo (2016)

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Innovation Ecosystem

• Innovation ecosystem is an evolving system in which

researchers, entrepreneurs, government employees
continuously compete and cooperate from R&D to
industrial innovation

In the fast-follower innovation ecosystem

companies raised their international competitiveness by relying on
input-driven process and by absorbing skills of developed countries.

However, the first-mover innovation ecosystem

requires continuous creation of new products, platforms, and
industries based on high-risk and high-return research.

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Virtuous Cycle

Source: Jackson (2011) 13

Interactions among technological stages

• In the first-mover innovation ecosystem,

• basic researches continually act the role of platform

until the last stage of innovation rather than staying afar
from applied researches or from the commercialization
stage of companies.

• Many research universities are being transformed

into central hubs of innovation ecosystem with the
promotion of use-inspired research, entrepreneurship
education, and start-up support.

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Interacting Technology Stages

출처: PCAST, 2012 15

 What is happening in business today…

the world’s largest taxi Emerging labor company,

Company, owns no vehicles does not have hired people

the world’s most popular media

owner, creates no content

the world’s largest accomodation

the most valuable retailer, provider, owns no real estate
has no inventory
출처: 이상엽, KAIST 16
Transforming the Role of Government

• In the fast-follower innovation ecosystem,

• government led the introduction of developed countries’
technologies through government-funded research
institutes or through public enterprises (BUMN).

• In the first-mover innovation ecosystem,

• government should focus on nurturing the ecosystem
letting companies, universities, and government-funded
research institutes to take charge in cooperating and
innovating based on much greater autonomy and
openness.

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 Discussions
1. Do you think Indonesia can optimize this opportunity?
2. As government employee, what should you do?
3. What kind of policy should our organization do?

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Thank You

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